Technological Innovation, The Problem Of Risks And Incentives In Underground Construction

A conference attended by a limited number of invited participants was held last September in Denver under the auspices of the Underground Construction Research Council of ASCE funded by the National Science Foundation (RANN) to explore the problem of accelerating the transfer of advanced geophysical technology, used principally in the petroleum exploration industry, into more effective and widespread use in subsurface investigations for underground construction. There are technological problems, but technical difficulties and unfavorable ratios of benefits to costs are not the major obstacles. The problem centers on the complex way in which potential net benefits are translated into effective incentives to innovate for each actor in the complex web of individual, corporate and institutional entities involved in the planning, designing, building, funding, operation and ownership of major underground construction projects. The entities responsible for site investigation, design concepts and specifications do not directly bear the risks of unanticipated costs and failures, nor directly gain from savings. The conventional unit-price construction contract is strongly implicated in blocking innovation. Problems of risks and incentives, more than technical feasibility, must be solved before large investments in technical adaptation and adoption can occur.