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OVERCOMING BARRIERS to INNOVATION in the HOME BUILDING INDUSTRY APRIL 2005 Disclaimer

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OVERCOMING BARRIERS to INNOVATION in the HOME BUILDING INDUSTRY APRIL 2005 Disclaimer VOLUME II: APPENDICES VOLUME I: REPORT U.S. Department ofHousingandUrbanDevelopment Office ofPolicy DevelopmentandResearch OVERCOMING BARRIERS TO INNOVATION IN THE HOME BUILDING INDUSTRY APRIL 2005 Disclaimer The statements and conclusions contained in this report are those of the authors and do not necessarily reflect the views or policies of the U.S. Department of Housing and Urban Development or the U.S. Government. The authors have made every effort to verify the accuracy and appropriateness of the report’s content. However, no guarantee of the accuracy or completeness of the information or acceptability for compliance with any industry standard or mandatory requirement of any code, law, or regulation is either offered or implied. The products and systems described in the report are included only as examples of some available choices. No endorsement, recommendation, or evaluation of these products or their use is given or implied. Overcoming Barriers to Innovation in the Homebuilding Industry FINAL REPORT: April 2005 Prepared for the U.S. Department of Housing and Urban Development Division of Policy Development and Research and the Partnership for Advancing Technology in Housing Building Technology Incorporated 1109 Spring Street, Suite 409 Silver Spring, MD 20910 Executive Summary ......................................................................................................iii Literature Review: Adoption of Innovation in the Homebuilding Industry ................ 1 Approach ................................................................................................................... 1 Literature Review Reporting Format .......................................................................... 1 Findings ................................................................................................................... 2 Diffusion of Innovation in the Homebuilding Industry ........................................... 2 The Concept of Barriers to Innovation.................................................................. 4 Fragmentation ...................................................................................................... 5 Risk ...................................................................................................................... 6 Education/Communication.................................................................................... 7 Industry Participant Preferences........................................................................... 9 Summary ................................................................................................................. 10 Panel Methodology ..................................................................................................... 11 Approach ................................................................................................................. 11 Panel Structures—Seats at the Table...................................................................... 11 Expert Participants................................................................................................... 12 Innovations Selected as Contexts for Barriers Discussions..................................... 13 Panel Discussions ...................................................................................................... 16 Risk as a Barrier to Innovation in the Homebuilding Industry................................... 16 Risk Panel Seat Perspectives ............................................................................ 17 Risk Panel Findings............................................................................................ 28 Industry Participant Preferences as a Barrier .......................................................... 31 Preference Panel Seat Perspectives.................................................................. 32 Preference Panel Findings ................................................................................. 41 Education/Communication as a Barrier.................................................................... 42 Education/Communication Panel Seat Perspectives.......................................... 43 Education/Communication Panel Findings......................................................... 50 Recommendations ...................................................................................................... 53 Page i April 2005 Tables Table 1. Barriers to Innovation Literature Review Summary Sheet................................. 1 Table 2. Key Innovation References ............................................................................... 2 Table 3. Key Fragmentation References........................................................................ 5 Table 4. Key Risk References......................................................................................... 6 Table 5. Key Education/Communication References ...................................................... 7 Table 6. Key Industry Participant References ................................................................. 9 Table 7. Risk as a Barrier to Innovation in Housing ...................................................... 12 Table 8. Preferences as Barriers to Innovation in Housing ........................................... 12 Table 9. Education/Communication as a Barrier to Innovation...................................... 13 Table 10. Innovation Candidates................................................................................... 13 Table 11. Large Builder Innovation Adoption Considerations........................................ 22 Table 12. JD Power and Associates 2004 New Home Builder Customer Satisfaction Survey....................................................................................... 38 Appendices Appendix A: Literature Review Summary Sheets and Bibliographies Innovation Adoption/Diffusion .................................................................................A-1 Risk ......................................................................................................................A-17 Fragmentation.......................................................................................................A-26 Education..............................................................................................................A-38 Industry Participant Preferences...........................................................................A-44 Appendix B: Seats by Area ..........................................................................................B-1 Appendix C: Innovation Presentations Risk Panel, DuPont Housewrap Flashing ...............................................................C-1 Risk Panel, SIPA ..................................................................................................C-15 Risk Panel, Premier SIPs......................................................................................C-23 Risk Panel, Eco-Block ICFs..................................................................................C-26 Preference Panel, DuPont Housewrap Flashing...................................................C-36 Preference Panel, Fischer SIPs............................................................................C-52 Preference Panel, ICFA........................................................................................C-59 Education/Communication Panel, DuPont Housewrap Flashing ..........................C-63 Education/Communication Panel, SIPA................................................................C-78 Education/Communication Panel, Premier SIPs...................................................C-86 Education/Communication Panel, PolySteel ICFs ................................................C-89 Appendix D: Current ToolBase Innovations Database and Statistics...........................D-1 Appendix E: Informal Panel Recommendations Related to PATH Operations.............E-1 Page ii April 2005 The U.S. Department of Housing and Urban Development’s (HUD) Partnership for Advancing Technology in Housing (PATH) has completed the research reported in this document in response to the National Academy of Sciences' (NAS) evaluation of PATH’s treatment of barriers to innovation in the housing industry. This evaluation, “Promoting Innovation: 2002 Assessment of the Partnership for Advancing Technology in Housing (2003),” found that while new technologies and production processes could help overcome serious problems for housing producers, “realizing these benefits on a broad scale is considerably hindered by characteristics of the housing industry that inhibit the development and diffusion of innovations.” The objective of this investigation was to make feasible recommendations for overcoming such barriers. The report is divided into four parts: . A literature review . An overview of the expert panels’ methodology . A summary of the expert panels’ discussions . Recommendations An extensive literature search and review was undertaken on the published literature related to risk, fragmentation, education/communication, and industry participant preference barriers to the adoption of innovation in the homebuilding industry. Altogether, nearly 40 documents were read and summarized. To develop a practical understanding of how these barriers affect technology adoption within the industry, three expert investigatory panels were convened in fall 2004—one on risk, a second on industry participant preferences, and a third on education/communication as
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