Executive Summary

The application of technology to housing design, construction, and operation offers opportunities for improving affordability, energy efficiency, comfort, safety, and convenience for consumers. New technologies and production processes could help resolve serious problems facing housing producers, including labor shortages, interruptions due to inclement weather, quality control, and theft and vandalism losses. However, it is generally believed that 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 Partnership for Advancing Technology in Housing (PATH) supports activities to address issues that are perceived by the industry to be the primary causes of the problems, i.e., barriers to innovation, lack of accessible information, and insufficient research and development (R&D) (NAHBRC, 1998). PATH was initiated in 1998 when Congress appropriated funds for the U.S. Department of Housing and Urban Development (HUD) to begin implementing the concept, which was created by the National Science and Technology Council Construction and Building Subcommittee (NSTC C&B).

SCOPE OF THE STUDY

At the request of HUD, the National Research Council (NRC) assembled a panel of experts as the Committee for Review and Assessment of the Partnership for Advancing Technology in Housing under the NRC Board on Infrastructure and the Constructed Environment. The committee was asked to assess how well PATH is achieving its many program objectives to expand the development and utilization of new technologies in the U.S. housing industry. The committee has approached evaluation of the program as an exercise that also provides direction for PATH’s future improvement.

2002 ASSESSMENT

The committee reviewed how the PATH program’s goals have evolved from a focus on improvement of housing performance to development and diffusion of technology in housing. It addressed the



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Executive Summary The application of technology to housing design, construction, and operation offers opportunities for improving affordability, energy efficiency, comfort, safety, and convenience for consumers. New technologies and production processes could help resolve serious problems facing housing producers, including labor shortages, interruptions due to inclement weather, quality control, and theft and vandalism losses. However, it is generally believed that 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 Partnership for Advancing Technology in Housing (PATH) supports activities to address issues that are perceived by the industry to be the primary causes of the problems, i.e., barriers to innovation, lack of accessible information, and insufficient research and development (R&D) (NAHBRC, 1998). PATH was initiated in 1998 when Congress appropriated funds for the U.S. Department of Housing and Urban Development (HUD) to begin implementing the concept, which was created by the National Science and Technology Council Construction and Building Subcommittee (NSTC C&B). SCOPE OF THE STUDY At the request of HUD, the National Research Council (NRC) assembled a panel of experts as the Committee for Review and Assessment of the Partnership for Advancing Technology in Housing under the NRC Board on Infrastructure and the Constructed Environment. The committee was asked to assess how well PATH is achieving its many program objectives to expand the development and utilization of new technologies in the U.S. housing industry. The committee has approached evaluation of the program as an exercise that also provides direction for PATH’s future improvement. 2002 ASSESSMENT The committee reviewed how the PATH program’s goals have evolved from a focus on improvement of housing performance to development and diffusion of technology in housing. It addressed the

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justification and roles for PATH based on economic principles and accepted theories for the development and diffusion of innovation. This evaluation considered each of the 56 PATH activities initiated between 1999 and 2001 with special attention to those activities that seemed likely to have the greatest impact on the program’s goals. The committee also presents here a long-term process for program assessment that it believes is needed for continued PATH improvement. A compilation of the committee’s findings and recommendations follows. EVOLUTION OF THE PATH PROGRAM Finding: PATH is an ambitious program intended to initiate significant change in an industry that affects 14 percent of the U.S. economy (NAHB, 2002) by sponsoring an annual program of activities valued at $8 million to $10 million. As a partnership it is intended to focus attention on the development and diffusion of technology for the housing industry and to use this attention to leverage action on related government, academic, and industry programs. PATH evolves by responding to its stakeholders and the recommendations of the committee. The committee has observed positive change as the program matures. Recommendation: PATH should continue to respond to input from its diverse stakeholders and the evaluations of this committee by fine-tuning its mission and goals for increasing the rate at which technologies are developed and diffused in the housing industry. PATH Approach to Advancing Housing Technology Finding: The basis for PATH was the hypothesis that innovative technologies can improve housing performance and reduce costs and that there is a need for intervention to increase the rate of innovation in the housing industry. The committee supports this hypothesis and the need for a program like PATH. However, there are insufficient data to determine the optimum rate of innovation in the housing industry, what is needed to increase the rate of innovation, and how innovation affects housing costs and performance. Research on the development and diffusion of technology in housing is needed to validate the hypothesis, support an effective program plan, and measure its effect. Recommendation: PATH should continue to base its work on the assumptions that (1) intervention is needed to increase the rate of innovation in the housing industry and (2) this can be accomplished by identifying, understanding, and removing barriers to innovation, increasing dissemination of information, and fostering research. Some PATH funds should be used to improve the program’s understanding of how innovations are developed and diffused in the housing industry, and to measure the value of the PATH program. Progress Toward Achieving PATH Goals Goal 1: To Remove Barriers and Facilitate Technology Development and Adoption Finding: Understanding and removing barriers to the adoption of innovative technologies in housing is key to the success of the PATH program. Removing such barriers will increase the rate of innovation by reducing the time needed for diffusion of new technologies, thereby providing additional incentive for private investment in R&D.

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Recommendation: PATH should increase the percentage of program resources allocated to the removal of barriers to the adoption of innovative technologies in housing, plan a comprehensive research program to better understand barriers to innovation, and use the knowledge gained from this research as the basis for developing effective programs to remove barriers. Finding: It is important for information on the performance, costs, and benefits of new technologies to be disseminated in a useful format to help remove multiple barriers to innovation. To make the program more effective, the process should include feedback on the decisions that potential new adopters make based on the information they receive from PATH. PATH’s demonstration and evaluation projects have not been publicized adequately, nor has PATH developed and documented the data needed to really help homebuilders, regulators, homebuyers, and other housing industry participants understand new technologies and determine whether they should be adopted. Recommendation: PATH should expand its program of demonstration and evaluation projects and create a database that details the relative advantages or disadvantages, compatibility with existing systems, trialability,1 and benefits of new technologies. There should be assurance that the data are accurate, reliable, and comparable. The information should be accessible to all members of the housing industry. PATH should coordinate programs to analyze and interpret the data for the industry, regulators, and consumers. Goal 2: To Improve Technology Transfer, Development, and Adoption Through Information Dissemination Finding: PATH-sponsored activities like the technology inventory and technology scan can be effective in disseminating information, transferring technology, and planning PATH programs. The current focus on technologies that have achieved less than 20 percent of their potential market share hampers PATH’s effectiveness. The effectiveness of the program is further diminished by the inadequate quality and consistency of materials documenting new technologies and opportunities for technology transfer. Recommendation: The technology inventory and technology scan should be broadened into a database of information on housing technologies at all stages of development. The database should incorporate information gained from demonstration and evaluation projects as well as all performance data available. Steps should be taken to ensure that the data are complete and accurate, and that documents used to convey this information to PATH’s audiences are clear, concise, and unbiased. Finding: Effective communication for the development and diffusion of technology in housing continues to be one of the major opportunities and one of the major obstacles for PATH. PATH uses the many channels and means of communication available, but with varying degrees of success. The current funding for communication is not consistent with its role in achieving the program’s mission and goals. A better understanding of channels of communication that might prove useful is needed to determine the most effective channels and means of delivery. PATH is, again, responsible for ensuring that the information it provides is unbiased, accurate, and complete. 1   “Trialability” is defined by Rogers as “the degree to which an innovation may be experimented with on a limited basis” (Rogers, 1995).

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Recommendation: PATH should place more emphasis on and dedicate more of its budget to understanding how its various audiences obtain and use information and to delivering its information. Use of the Internet should be continued, but the use of other means of mass communication and outreach should be expanded commensurate with their role in the housing industry. A process for independent peer review should be created to ensure the accuracy and clarity of the information disseminated. Goal 3: To Advance Research on Housing Technologies and Foster Development of New Technology Finding: More than 80 percent of PATH resources have been allocated to R&D, yet there is no agenda that identifies and prioritizes R&D activities. The technology roadmaps, while providing direction for specific technologies, are not a substitute for a PATH research agenda. The result has been a broad array of unrelated activities—and minimal progress toward achieving program goals. For PATH, basic and applied research on new building materials and systems with broad applications is more appropriate than research for development of specific technologies, but private investment in developmental research should be encouraged. PATH needs to set national priorities for coordinating federally funded R&D activities, minimizing duplication, and encouraging partnerships between industry, government, and academia. It is particularly important to recognize that industry investment in research is minimal, and to create a mechanism that encourages industry to invest in housing technology research. Recommendation: PATH should increase efforts to monitor promising R&D and enhance dissemination of information about leading-edge housing technology. PATH should set a comprehensive research agenda that is coordinated with current research in government, academic institutions, and industry. PATH-sponsored research on housing technologies should emphasize basic and applied research with broad application and the potential to increase the rate of innovation. PATH should foster development of specific new technologies primarily by promoting private investment. Goal 4: To Administer the PATH Program to Achieve Its Mission, Goals, and Objectives Finding: Administration of the PATH program has been inconsistent and has not provided sufficiently strong direction. The committee recognizes that administration has been hampered by the initial selection of goals at the inception of the program that were overly ambitious for the size of the program. Administration has also been hampered by the uncertainty of the program’s future. Unfortunately, the administrative impediments have led to a misplaced emphasis on activities (e.g., developmental research versus information dissemination and barrier removal), and a program that lacks baseline measures and an operating plan to achieve its goals. The development and diffusion of accurate and unbiased information about new technologies would increase both recognition of the program and its ability to influence innovation in the housing industry. The strengths of the program in engaging diverse stakeholders and in the skills and abilities of the PATH staff are resources that can overcome these problems. Recommendation: PATH should draft a program plan for achieving its current goals. Research on innovation in the housing industry and channels of communication should be priorities. The information gained from this research should be used to guide writing of the program plan and collection of baseline data for future program evaluation. All stakeholders should participate in the planning process

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in proportion to their roles in advancing technology in housing. PATH should enhance its relationships with the broad spectrum of housing researchers, innovators, adaptors, and consumers by establishing channels of communication for collecting and disseminating information on housing technology. Assessment of the PATH Program as a Whole Finding: PATH started out with goals that were influenced by many factors other than technology and that were somewhat contradictory, not measurable, and inappropriate for a small technology-focused program. Nevertheless, the program made an effort to achieve these goals. The result is an unfocused program, an array of uncoordinated activities, and a misplaced emphasis on R&D for new technologies. PATH has made an effort to refocus its goals on the program’s role in promoting the development and diffusion of technology, but this effort is not yet complete. Recommendation: PATH should be continued as a program aimed at increasing the rate of development and diffusion of innovation in the housing industry. Its activities should focus on (1) identifying, understanding, and removing barriers to, and (2) disseminating information for, the development and diffusion of new technologies, as well as (3) increasing industry investment in technology development. Long-Term Assessment and Program Improvement Finding: Because PATH is a new and evolving program, expert review of the program’s performance and its response to reviews is especially important to its ongoing management. Effective program assessment is essential if the PATH program is to be efficiently managed. The program should be evaluated based on whether the activities it undertakes are likely to help achieve its goals, and on the quantity and quality of the results of these activities. If PATH undertakes the right mix of high-performing activities, then improvement in measures of innovation in the housing industry can be attributed, at least in part, to PATH. Recommendation: Criteria for PATH program evaluation should be made a part of all grants and contracts. Additional performance measures should be designed to evaluate how the program is affecting innovation by individuals, enterprises, and the housing industry. Performance data should be reviewed independently so that assessment and interpretation of reported performance metrics are unbiased. This review could help analyze data on the results as well as evaluate performance of the program’s strategic planning and management. REFERENCES NAHB (National Association of Home Builders). 2002. Housing, the Key to Economic Recovery. Washington, D.C.: National Association of Home Builders. NAHBRC (National Association of Home Builders Research Center). 1998. Building Better Homes at Lower Costs: The Industry Implementation Plan for the Residential National Construction Goals. Upper Marlboro, Md.: NAHB Research Center. Rogers, E.M. 1995. Diffusion of Innovations. New York, N.Y.: The Free Press.