POLICIES FOR PROJECTIFICATION: SUPPORT, AVOID OR LET IT BE?

Arvi Kuura
Prnu College, University of Tartu

Abstract

The importance of temporary activities is growing and projects are proliferating in

most businesses, non-profit and public organisations. This trend has been treated by
different authors and on different levels organisational, societal and personal, but
mainly on a single level and under different labels (projectization, projectification,
project orientation etc.). As the integral picture is still almost missing, the article is
aimed to fill this gap, showing that the levels of projectification are distinguishable,
but tightly interconnected. Another aim is to uncover the subtopic of the extent of
projectization (and/or projectification) and the appropriate policies and strategies. In
this aspect the main issue is the balance between the temporary and the permanent,
and the defence of permanency in the world of proliferating temporary settings.

Keywords: economic policy, strategy, projectization, projectification

JEL Classification: D21, D92, E61, G34, L22, L52

Introduction

In contemporary societies the relative importance of temporary activities is growing

and pertinent forms of organisation projects and programs are proliferating in
most businesses, non-profit and public organisations. This trend, which is currently
occurring in all sectors and regions, has already deserved some attention in academic
literature. This quite new research subdomain has appeared under different labels:
projectization, projectification, project orientation etc. Furthermore, different authors
have treated the same phenomenon on different levels organisational, societal and
personal, but mainly on a single level, disregarding their interconnections. Almost
uncovered subtopic is the prevailing extent of projectization (and/or projectification)
and the political aspect should we support further projectization / projectification,
avoid it or let it happen. So there are some gaps in existing knowledge and an almost
uncovered subtopic the policy aspect, which the article is trying to fill.

The goal of this article is to explore the essence of projectization and projectification
across the discerned levels, clarifying the terms and concepts; to estimate the current
extent of projectization, particularly for Estonia; and to outline recommendations for
adjusting policies or strategies on the levels of projectification. The examination of
the phenomena of projectization and projectification is carried out by comparative
(functionally, also historically) theoretical analysis of existing literature (Sections 1
and 2). The estimation of current extent of projectization and projectification (for
Estonia mainly) is based on statistical data and existing research results (Section 3).
The recommendations for the (re)design of policies or strategies (in Section 4) are
outlined on the basis of examination and discussion, carried out in previous sections.

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1. The Phenomenon and Levels of Projectification

Projectification can be defined as a general development process in which firms to

a greater extent focus their operations on projects, project management and various
types of project-like structures (Bredin 2006). This term was introduced in the
middle of the 1990s by C. Midler (1995) in his seminal article where he examined
Renaults way towards project orientation. The concept of project orientation was
taken from R. Gareis (1989). This concept considers that companies are becoming
more project-oriented and this trend, which lies on simultaneous performing of a
network of projects, creates demand for a new management approach Management
by Projects. This approach considers not only the management of single projects,
but also the relationships between the projects and the company (organisation) and
between projects i.e. the management of the network of projects. (Ibid.)

Gareis (2002) expanded the concept of project orientation also to societies1, using a
construct of project-oriented society (POS). He claimed that more projects and
programmes are also performed in new social areas, such as (small) municipalities,
associations, schools and even families. Gareis (2002 and 2004) has also developed
maturity models for project-oriented companies (or organisations) and societies and
used these models for benchmarking and assessment of the Project Management
competences of various societies and companies.

Despite having appeared in academic literature relatively recently, the concept of

projectification is considered to be older. According to Packendorff (2002), since the
mid-1960s it has often been claimed that the societies are becoming increasingly
projecticised organised in terms of time-limited sequences of (inter)action. This
development was caused by increased use of the project work form; and also by
increasing tendency to view continual processes (often named business-as-usual)
as limited in time and scope. The main novelty and purport of Packendorff (Ibid.) is
that projectization has also affected peoples personal lives.

As it can be noticed, different terms are used in this domain project orientation,
projectification and projectization. It has to be clarified that these terms have similar,
but not coincident meanings. Especially, the term projectization has a bit different
signification. According to Mller (2009) the (level of) projectization indicates the
extent to which a business is based on projects and the degree the project way of
working pervades practice within the corporation. Maylor et al. (2006) adjusted the
understanding of projectification, eliciting that its novelty was not in the trend of
organising work through projects, but in concurred organisational changes. I suggest
that collating these two opinions it is possible to distinguish between projectification
and projectization. As seen, projectization means the degree of organising activities
through projects, which is a precondition for projectification. Thus projectification
has much wider meaning, which also comprises projectization.

1
Project-oriented is considered a society, which applies frequently projects and programmes,
and provides project management-related education, research and marketing services.

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In addition, Maylor et al. (2006) introduced a fairly similar term
programmification but this is standing for a different concept and therefore should
be distinguished. Reviewing the evolution of projectification they brought in a new
phenomenon programmification, standing for implementation of programmes and
portfolios of programmes as management mechanisms in organisations. They also
pointed that the multi-project level presents an area of great interest for both
practitioners and scholars. (Ibid.) Consequently, this represents a promising
research agenda and so it is relevant to mention that there have already been
significant developments. An example could be the project business by Artto &
Kujala (2008), where they added the multi-project and multi-firm perspective to the
classical single project single firm case.

Thus, in general it will be necessary to distinguish between the reviewed terms and
undelaying concepts, especially when there is a need to emphasise particular aspects.
While this article is concentrating on projectification, which is wider and comprises
projectization, term projectification is used when there is no need to differentiate.

As seen, the phenomenon of projectification was first observed and defined on the
level of firms, i.e. organisations, and extended upwards to the level of society (by
Gareis), as well as downwards to the level of single persons (by Packendorff).
Thus it is possible to distinguish between three levels, as proposed on Figure 1.

Societal Projectification
Organisational
Projectification
Personal
Projectification

Figure 1. The levels of projectification.

Two of these levels are defined by quoted before Maylor et al. (2006). They see
organisational projectification to be a change in organisational and governance
structure to increase the primacy of the processes of projects within a central
organisation and its supply networks and societal projectification where this
change extends beyond the boundaries of the workplace (Ibid.).

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Focusing on organisational level, Maylor et al. (2006) do not pay much attention on
other levels of projectification and (in my opinion) there are some disputable issues
in definitions. The traditional meaning of workplace is a factory, an office or any
location where an employee performs his/her work, but such traditional meaning
may not fit well into contemporary paradigm, characterised by virtual (or flexible,
distance etc.) forms of work. This has influenced the intra-organisational relations,
including work contracts, because traditional, hierarchical permanent organisations
undergo significant transformations and are often combined with more temporary
solutions (Ekstedt 2002). Therefore it is necessary to recognise that the boundaries
of workplace are flexible and continuously changing in contemporary society. This
is actually what the theorists of the boundary school have claimed (for instance,
see Foss 1997).

It fact, the boundary school deals mainly with the inter-organisational relations and
this aspect is relevant also here. The definition of organisational projectification by
Maylor et al. (2006) includes the processes within a central organisation and
its supply networks, but the network relations may not be limited by the supply
chain of a focal2 organisation. In mainstreaming theories the networks are seen as
something between the main coordination structures of transactions hierarchies
and markets (for instance, see Thorelli 1986). It means that networks may represent
a variety of different forms on inter-organisational relationships, which may be
nearly market-type or nearly hierarchical. In this concept the environment of an
organisation (a firm) consists of heterogeneous competitors and co-operators and
their positions may change quite rapidly a competitor today may become a co-
operation partner tomorrow and vice versa, or be both at the same time. This is quite
common nowadays and called co-opetition (see Brandenburger & Nalebuff 1996).
These inter-organisational relationships can be viewed as networks and because their
importance is increasing, the networks must be treated seriously as accented by
OToole (1997).

The networks represent a phenomenon which does not fit into standard micro- or
macro-levels because they are usually too big for micro-level, but not enough big for
macro-level. Because of that some scholars have started to treat networks on a new,
called meso-level and this has also appeared in project management related literature
(Grabher 2004). In this concept the meso-level is conceived as a set of firms (and
institutions) variably tied together through networks (Ibid.). As societal level (see
Figure 1) is correlating with traditional macro- and organisational with micro-level,
there is a question on which level to treat the networks? There are two options: to
bring in an additional (network or meso) level, or to divide the networks between
the traditional macro- (societal) and micro- (organisational) levels. It is noticeable
that Maylor et al. (2006) used the second way their definition for organisational
projectification includes the processes within a central organisation and its
supply networks. It means that networks on stronger ties are treated as hierarchies
and networks on weaker ties like market-based relations.

2
Focal has nearly the same meaning as central, but is more widely used in network literature.

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On the presented above basis is possible to re-define the projectification on three
levels (as outlined in Figure 1) as follows:
Societal projectification is a change in governance structures to increase the
primacy of the processes of projects in whole society;
Organisational projectification is a change in organisational and governance
structures to increase the primacy of the processes of projects within a central
organisation and its supply networks;
Personal projectification is a change in persons work relations and/or private
life to increase the primacy of participation in projects.

The proposed above definitions are following the definitions of Maylor et al. (2006),
but with some deviations.

They (Ibid.) defined societal projectification by excluding projectification beyond

the boundaries of the workplace (i.e. within organisations), but the proposed above
definition for societal projectification comprises all levels, including personal. The
proposed approach is probably more correct because all social processes, including
projectification, occur in a society and organisations, and persons are parts of it. As
depicted on Figure 1, societal projectification is the widest and serving as context for
projectification on other levels.

The definition for organisational projectification is taken from the original source
(Ibid.) as is. As seen, the organisational projectification may serve as context for
personal projectification, what is probably working in most of cases, but there are
other options for personal projectification. As Gareis (2002) has claimed, more and
more projects are performed in voluntary associations and even families, and just in
private lives of people. Voluntary (non-profit) associations are also organisations,
but their relations with individuals are different work relations (contracts) are used
much less and are mainly replaced by voluntary participation.

The definition for personal projectification is quite novel. It is relying on the same
principles (Ibid.) i.e. personal projectification specified through a specific change,
but on a personal level. As depicted, the presented approach tolerates personal
projectification not only through relations (working, membership or just voluntary
participation) with an organisation, but also directly. It means that projectification
of peoples private lives may take place beyond traditional (formal) organisations.
An example could be a person who builds a house on his own. Building is certainly
a project-based activity, but no formal organisation is used. Another example and
exclusion from general pattern is entrepreneurship, because an entrepreneur (also a
self-employed person) does not have work relations. Using words of transaction
costs theorists, an entrepreneur does not belong to any hierarchy and is related to
other economic actors via market relations. For instance, the business of a self-
employed translator is almost entirely project-based, as every order can be seen as a
project. The links between entrepreneurship and project activities have not yet been
comprehensively explored in academic literature, but the links seem to be essential.

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2. Projectification on Different Levels and Interconnections

Projectification-related issues on the societal level have not deserved much attention
in academic literature, but yet there is something. For instance, Jensen (2009) has
examined the usage of projects as policy tools in implementing metropolitan policy
in Sweden and claimed that an important issue is a fit between the temporary policy
organization and the governance structure in which it is implemented.

An interesting contribution is made by Kovach and Kucherova (2006). They claimed

that extensive flows of European as well as national and other project-based funds
has caused bottom-up projectification in (regional) development from EU and
national policies. An outcome of mass of development projects is the emergence of
the project class in Central and Eastern Europe. Further they (2009) they set up a
hypothesis that the project as a management form and its actors play a key role in
European integration, and alerted about the need to prevent situations where projects
do not support development, but become a profitable business for the project class.
Because the new class represents the rise of a new social and/or power position, it
has impact on other levels of projectification, both organisational and personal.

A consequent subtopic to unfold is the usage of projects in public administration.

For instance, Sjblom and Godenhjelm (2009) examined the potential consequences
of project proliferation3 and discovered that increasing temporality (i.e. expansive
usage of projects/programmes) in public decision-making have influence on the core
values in public administration like transparency and democratic accountability.
They claimed that project organizations serve not only as mechanisms for financial
(re-)distribution (what is a significant matter itself), but also as legitimacy-raising
mechanisms on the output side of policies. Also they note still existing shortcomings
in the field. For instance do temporary organizations support policy coherence or
rather particularized solutions is still unclear. Also, there is little evidence on the
possibilities of achieving and maintaining long-term effects by using of temporary
administrative structures and procedures. This means that the project proliferation
(or increasing temporality) has also darker (or grey) side at least in public sector.

Along aforesaid, Andersson (2009) noted that project management, what permeates
current public administration, has so far deserved surprisingly little reflection and
analysis. An example is EU and its regional development apparatus it is based
upon projects, but gives them very little attention as such. He (Ibid.) pointed that
most of research on public projects has been devoted to development aid. Such
works are almost entirely case studies and focus on general project (management)
issues is marginal (or even missing the last is my addition, based on over four-year
experience of editing NEP4 reports on Project, Program & Portfolio Management).

3
Their empirical case was environmental management, what is characterized by cross-sectorial
and multi-level policy problems and implementation processes.
4
NEP (New Economics Papers see http://nep.repec.org/) is an announcement service which
filters information on new additions to RePEc (Research Papers in Economics see more
http://repec.org/) into edited reports.

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Andersson (Ibid.) also stresses on innovation paradox, which lies on an
expectation that the actors in regions are innovative, but in reality, the lack of
innovation is one of the most salient traits of observed regions. Understandably this
leads to a variety of conflicts. Andersson (Ibid.) also noticed some tendencies: the
professionalization of project work (highly educated people working on
sophisticated projects) and the gendering (women as project leaders, especially in
small projects). These tendencies obviously have links with the emergence of
project class (by Kovach & Kucherova 2006) and Andersson (2009) has made
similar deduction: the added value of most projects is very small only employment
to engaged people until there is funding, but minimal long-term effects. So it seems
that the added value of projects could be increased by engaging more ordinary
people as project leaders (and thus, depriving the project class).

The patterns of projectification and its consequences on societal (mainly regional)

level have been studied by many scholars, concerning various aspects, regions, etc.
For instance, Dornisch (2002) examined the evolution of post-socialist projects and
recovered that collective projects were generated to deal with the practical
restructuring problems that regional firms and institutions were facing during the
period of wide-scope transition. Mike (2007) claimed that projectification of
development policy is the resulted by the logic of the political economy of the EU
and this has been particularly successful in this respect in new member states.

Veenswijk and Berendse (2008) have made an interesting contribution to existing

academic literature, relating the dynamics (both internal and external) of New Public
Management (NPM) to the daily life of project management. They examined the
ways how NPM concepts work out in the realities of project actors and suggested
not to quest for best practices, but for better and more consensually provisional
practices and that organisational leaders could use narratives to engage individual
organisation members in such a collaborative process of developing new practices.

It is possible to admit that projectification, including the proliferation of temporary

organisations has attained a remarkable place in contemporary public administration.
In some extent, this reflects in academic research, but the research side seems to be
behind and therefore there is a need to enlivening. As seen, all the traditional macro-
level subjects (nations, regions), as well as comprised meso-level subjects (networks
on weaker, market-type ties) are affected by projectification.

Rolf Lundin (2011) has claimed that currently there are lots of signs of continuing
projectification in the world and not only the numbers of projects increases, but also
fairly new application areas emerge. According to his opinion an example of a new
application area is the EU: in a modern view it is not a question of government, but
of governing, where governing stands for activities. The logical deduction is that
projectification becomes an issue also for political scientists5. As shown before, the
same or similar conclusions have been made by many researchers. Thus we can
conclude that there is already enough evidence, but also a need for further research.
5
Claiming that he refers to cited before article by Sjblom and Godenhjelm (2009).

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To sum up with the projectification on macro-level, it is worthy of mentioning that
the distinguishing between the levels is somehow artificial because the levels are
actually tightly linked. This is mainly because the macro-level is serving as a context
for micro-level actors. As generally known, the macro-level is influencing the actors
on micro-level through policies which form the environment. At the time, the micro-
level is (and increasingly) influencing the macro-level. This reverse influence is
occurring mainly through (policy) networks, which have a wide variety of different
forms, including public-private partnerships (or private takings). Spreading of such
hybrid governance structures has significantly empowered the SME sector, as well
as the voluntary (NGO) sector and just people.

A befitting way for moving from macro- (societal) to micro- (organisational) level is
to point out the importance of new (temporary) organisational forms, as pointed out
by Asheim and Mariussen (2003):
firms, industries, and clusters who know how to use temporary organisations
(esp. projects) for new knowledge generation and utilization are able to access,
transform, and exploit knowledge better and faster than those who do not;
successful use of temporary organizations (projects) depends on the knowledge
base of firms, industries, and clusters, also (more importantly) on institutional
context (business system), spatial system, and development coalitions within
which projects and project ecologies are embedded;
temporary organizations (projects) are used in increasingly new ways across
different industries and clusters, as they become more deeply integrated into the
learning processes, transforming the way business systems and their innovation
systems operate.

As seen, they stress on factors like the generation and utilization of knowledge and
organisational learning, which are universal for firms, industries, clusters and other
kinds of networks business and spatial systems, development coalitions etc. This is
also an explanation, why to treat networks, which are based on stronger ties, in line
with organisations (i.e. hierarchies).

Ekstedt (2011) has proposed a suitable division of environments of projectification

and three models of project organisations:
1) Project Based Organisations (PBOs), where the revenue is directly based on
project activities and projects are the line (examples: consulting, management,
design, law, advertising, architecture, culture, fashion, film, publishing, IT,
multimedia, construction, telecommunications, infrastructure);
2) Project Supported Organisations (PSOs), where project activities (in i.e. R&D,
marketing, design etc.) support core activities (production, marketing etc.) to
cope with innovation-based competition (examples: automobile, biotech, etc.);
3) Network-Based Projects (NBPs), where the projects are inter-organisational,
formed in the network or cluster environment (due to the proximity or to
promote the cluster itself) by traditional PBOs and PSOs (examples: TV
production networks, construction, etc.).

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Ekstedt (Ibid.) accented that there are no absolute borders between these categories,
but they have different characteristics and are most common in different contexts.
He has also designated a place for self-employed persons, working with projects by
themselves or in connection to projects in one of the three models. In my opinion,
this alludes to connections between the levels of projectification and the flexibility
or turbidity of various organisational and institutional borders.

As organisational projectification is supposed to cause changes in organisational and

governance structure, the projectified organisations should be somehow different
from normal organisations. These changes have been observed by many scholars,
starting from seminal article of Midler (1995). These changes have been summarised
by Gareis (2006) as the characteristics of project-oriented organisations as follows:
Management by projects is an explicit organizational strategy.
Projects and programmes are used as temporary organisations.
Networks of projects, chains of projects and project portfolios are object of
consideration for the management.
Project management, programme management, and project portfolio manage-
ment are specific business processes.
Know-how provision and assurance takes place in expert pools.
Project management competence is ensured by a project management office and
a project portfolio group.
A new management paradigm is applied, characterized by teamwork, process
orientation and empowerment.

Project-oriented organisations are characterized by projects and programmes (which

is a natural precondition). It means that at any given time a number of projects or
programmes can be started, performed, closed down, or stopped and this the way to
create a state of balance, what will ensure the continuous development and survival
of the organisation. The more varied are the projects (programmes) and their mutual
relations the more complex will be the management of the organisation. (Ibid.)

As specified before, projectification on micro-level encompasses organisational and

personal and (in most cases see limitations stated before) the organisational level
is serving as context for the personal level. As generally known, the main linkers of
the two sublevels are Human Resource Management (HRM) and contracts of work.

Bredin and Sderlund (2006) studied the consequences of projectification on HRM

and pointed out that previous research on HRM has not enough been guided by the
consequences of projectification. For instance, questions like in what way must the
HRM practices be adjusted and what role has HRM in the projectification of firms,
are not yet properly answered. Analysing of the HRM practices in projectified firms
they used four-perspective framework competence, trust, change and individual.
As each perspective was theoretically built on different views and ideas of the firm,
the framework probably contributed to the understanding of the various roles and
responsibilities of HRM in projectified firms. (Ibid.) Their most interesting results
(in my opinion) are related to the trust perspective and the individual perspective.

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Bredin and Sderlund (2006) highlighted the importance of building swift trust in
project operations, including in recruiting consultants and temporary (knowledge)
workers; also emphasised the need for boundary-spanning HRM practices. They
argued that in traditional HRM this particular role has been underemphasised,
primarily because it has been directed by a narrow definition of the employment
contract. Many external people carried out the key management duties in the
projects, but were not part of the organisations traditional HRM. In my opinion, this
was quite an expected result, as the critical role of trust is generally recognised in the
network literature and the described situation may be seen as the occurrence of
networking. Concerning the individual perspective, they (Ibid.) noticed that although
the observed firms stated that they are people-centred, people matters seemed to be
very low on the management agenda.

The problems of work contracts (or employment relations) have been quite properly
explored by Ekstedt (2002). According to him, there are two major tendencies up to
now increasing use of project-organised economic activities (in the long run) and
expansion of temporary (non-permanent) employment (in the short run); both have
an impact on the contractual relations of working life. He also stresses that there is
no simple relation between project organisation and temporary (project) employment
many persons (like most consultants, construction workers in Nordic countries)
have a permanent job in project-organised activity. For structuring of the possible
relations he combines forms of organising (flow-process versus project operations)
and forms of employment (permanent versus temporary), as presented in Table 1.

Table 1. The relationship between organisational form of economic activities and

the time-contract between the organisation and the individual
Permanent Employment Temporary Employment
Flow- A. Industrial Organisations B. Non-permanent activity
Process - Traditional industrial companies, call - Individuals on temporary
Operations centres, component producers and assignment in A or C.
public services. - Temporary agencies which lease
Characterised by: line production, out staff to client companies: e.g.
multi-level managerial decisions, office/-specialist service.
stationary real capital, bureaucracy. Characterised by: PO with
Strong PO and weak TOs broker function
Projectised C. Project-based organisations D. Self-employed professionals
Operations - Commissioned companies; IT, - Individuals who are selling their
technical, management consultant services to A and C, or who create
firms and subcontractors. projects (free agents): e.g. free-
Characterised by: Recurring projects lance writers / journalists / artists /
operations. Weak PO and strong TOs craftsmen, consultants, construction
- Contractors hosting and creating workers.
projects; Construction- , ICT and Characterised by: Absence of PO
entertainment companies.
Characterised by: Small PO with
strategic functions, harbouring project
teams for development and production
Source: Ekstedt 2002. PO - Permanent organisations, TO - Temporary Organisations

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Generalising the sketch Ekstedt (2002) noted that the organisational changes follow
some distinct patterns. On the first place he placed the increasing use of project-
organised activities and the growing number of people working in quadrant C, also
an evident trend of shifting from A to B. Also, quadrant D seems to be expanding.
He also underlined that the permanent organisations will not disappear, as there will
always be a need for long-lasting structures, because they can provide the strategic
infrastructure and ensure the knowledge development and transfer (Ekstedt et al.
1999). Another apologia for permanent (or traditional industrial) organisations is the
fact that there is still a lot of standardised production, what should be permanently
organised. Permanent organisations are also needed to host temporary organisations
and thus, the main challenge for the managers is to cope with the division of roles
between the permanent and the temporary. (Ekstedt 2002)

The personal (or individual) level of projectification has got very little attention in
academic literature, but there is something to find. For instance, Packendorff (2002)
has examined the project work from an individual perspective and claimed that the
development toward projectisation has important consequences for work and life
more and more people work in different project organisations, and even more people
are involved in projects as a part of their otherwise routine work. In his research he
used two analytical dimensions: 1) to what degree the individuals work is tied to the
temporary (project) or the permanent organisational context; 2) to what degree the
project work is routine or exception to the individual. On these two dimensions, he
identifies a typology of project work, as presented on Figure 2.

Figure 2. A typology of project work situations (Packendorff 2002).

The essence of quadrants I, II and III should be understandable in affiliation the

organisational means work in permanent and the project in temporary organisations;
project work as routine means that it is total or at least dominating and exception
that at times a person is involved into projects in (also in between) organisations.

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Perhaps clarification is useful according to quadrant IV independent entrepreneurs.
Packendorff (2002) noted that they are often working as consultants for customer
firms, but can also be specialists or artists who do temporary work for others on a
self-employment basis. This group of individuals is also discerned by Ekstedt (2002)
as presented in Table 1, but (in my opinion) this is disputable. Here is easier to agree
with Ekstedt (2002) who speaks about self-employed persons, but not so easy with
Packendorff who speaks about (independent) entrepreneurs. This is because the self-
employment is (sometimes) considered to be something between employment and
real entrepreneurship. The only essential difference between self-employment and
entrepreneurship is that self-employed persons do not have employees and thus they
do the entire job themselves (but they can use subcontractors, if this is not prohibited
by agreements with their main contractors), but the real entrepreneurs are usually
supposed to have employees. But yet, it seems that Packendorff (2002) and Ekstedt
(2002) are speaking about the same issue, using different expressions. This is correct
in respect of the way of involvement of some persons, but it should be distinguished
from other relations in respect of the type of contract or relations. The point is that
work contracts represent hierarchies, but self-employed persons and entrepreneurs
are related to their customers via market-type relations.

The most significant contribution of Packendorff (2002) is probably the identifying

of the specific features of life in the temporary (or projectified) society from an
individual perspective. First, he points out increasing de-coupling of the individual
from her context both work and life in general will be episodic with an increasing
lack of permanent structures, organisations, core families, bases for social identity
construction etc. Second, the temporary society will be more open, less predictable,
and thus more risky to live in. Third, the remaining permanent structures in society
will require even more co-construction by individuals and organisations in order to
survive. The people still want organisations, families, old friends all which make
life somewhat habitual, not only changing.

In my opinion, the last (third) concluding point of Packendorff (2002) is something

that will perfectly generalise the overall issue of projectification on all three levels.
It may be somehow paradoxical, but his most interesting and most important point is
the need for defence of permanence. He (Ibid.) elicited that organisations of today
are not always supportive (i.e. do not defend permanence) when designing working
conditions for individuals. But, if they (the permanent organisations) do not want to
become temporary phenomena themselves, they should be. This is clearly indicating
the interconnection of personal and organisational levels and (in my opinion) it is
possible to generalise this approach to the societal level. It means that in order to
support the projectification on the organisational level, the society has to care about
the development of permanent institutions, acting as a counterbalance to increasing
projectification on organisational level.

For ending here, I would like to stress that the society as whole can not to become a
temporary phenomenon, but the society is based on different institutions and most of
its institutions may be affected by the increasing temporalisation.

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3. Projectization and Projectification of Organisations and Societies

Estimation of the extent of projectification (or project orientation) is not an easy task
because it is not reflected in statistics and has not been studied much. The existing
research on projectification is almost entirely focused on particular firms such as
the examination of Renaults situation by Midler (1995), cited above. The reason for
this is understandable as the most important matter is not the extent of organising
work through projects, but the resulted organisational changes, there is a clear need
for (mostly) a qualitative approach, based on particular case(s). At the same time, it
should be recognised that an obvious precondition for projectification is the certain
extent of organising work through projects i.e. projectization. This is a (more)
quantitative phenomenon and thus it allows to make comparative analyses across
organisations, regions, countries etc., and to express trends over time.

According to Ekstedt et al. (2005), projectization is a typical trend for neo-industrial

organisations. It has had several reasons, which could be divided between supply
(production) and the demand side of the economy. In other words, there are push
and pull effects, which can operate simultaneously. In modern society projectization
has a visible role in many significant developments, including in the labour market.

Sderlund (2005) has pointed out two reasons why temporary forms of organising
have emerged in many firms and industries: 1) the growth industries (such as IT,
management and technology consulting, entertainment, media, advertising etc.)
largely organise activities (both development and production) in projects; 2) mature
industries (such as automotive, telecommunication, electric equipment etc.) organise
their activities to an ever greater extent in projects. The fundamental reason behind
that is the shortening of product life cycles and overall increase in R&D spending, as
well as an increasing amount of complex systems and products.

Ekstedt (2009) has elicited that projectification6 is related to several developments in

economy and society. The most important is the servicefication of the economy. Its
influence on projectification consists in the fact that an increase in service activities
leads to the use of more temporary solutions (i.e. projects) in organisations. These
structural changes have obviously influenced the behaviour of micro-level units, but
the general trend is that the use of project solutions in companies is becoming more
common. In large companies, an increasing part of activities is transformed into
projects and some small companies also change their way of organising work.

As mentioned above, projectization is a more quantitative phenomenon and thus it

should be easier to analyse. As demonstrated by the references cited, the essence of
projectization has been approached qualitatively, but not so much quantitatively. It
means that the share of economic activities that are carried out by projects still needs
clarification.

6
Increase of service activities is actually projectization, leading to projectification changes in
organisations, consisting in the use of more temporary solutions (i.e. projects).

129
An attempt to estimate the total share of project activities in world economy has
been made by Turner et al. (2008). Considering the share of new capital formation
(i.e. infrastructure projects) and the share of projects in the SME sector they claimed
that about (or even more than) one third of the world economy is done via projects.

The first item the share of new capital formation represents large infrastructure
projects. This has been used as a measure of projectization even before, probably
because of available statistics. Turner et al. (2008) rely on World Bank statistics on
gross capital formation (% of GDP), presented in Table 2.

Table 2. Gross capital formation (% of GDP) in selected countries

Countries 2000 2001 2002 2003 2004 2005 2006 2007 2008 AV*
Estonia 28.4 27.9 32.3 33.1 33.1 33.8 38.7 40.2 29.7 33.0
Latvia 23.7 26.6 26.7 28.8 33.0 34.4 39.7 40.4 32.3 31.7
Lithuania 18.9 19.3 20.7 21.9 22.7 23.9 26.3 30.9 27.0 23.5
Finland 20.9 20.5 19.2 19.4 20.0 21.9 21.3 22.9 22.3 20.9
EU 21.3 20.4 19.5 19.4 19.7 19.9 20.7 21.4 20.8 20.3
China 35.1 36.3 37.9 41.2 43.3 42.1 43.0 41.7 44.0 40.5
Russia 18.7 21.9 20.1 20.9 20.9 20.1 21.2 24.2 25.4 21.5
US 20.6 19.0 18.4 18.3 19.3 19.9 20.1 19.0 17.4 19.1
World 22.3 21.3 20.6 20.7 21.5 21.9 22.4 22.4 21.9 21.7
Source: World Bank database. * Average 2000-2008

As seen above, the share of capital formation in GDP is usually higher in developing
countries. It means that developing countries are more projectised, which is quite
logical. A vivid example is certainly China where more than 40 per cent of GDP is
dedicated to new capital formation. It is notable that among these countries Estonia
holds the second place and Latvia the third place. It is also remarkable that the USA
is in the last and the EU in the next to last position, both below the world average.

The second item the share of projects in SMEs considers the relative importance
of SMEs in the economy and a research result the fact that 25 per cent of the
turnover of SMEs consists in new and improved products. Multiplying their share in
economy by the share of their turnover of new and improved products Turner et al.
(2009) found that 14 per cent of the economy consists in innovation in SMEs.

Table 3. The share of projects in SMEs (in EU and in Estonia)

The share (%) of SMEs: EU Estonia
- in number of all companies 99.8% 99.6%
- in private sector employment 67.4% 78.6%
- in value added 57.9% 76.3%
- turnover by new and improved products 25.0% 24.9%*
- in economy by innovation in SMEs 14.5% 19.0%
Data: SBA Fact Sheet ESTONIA (2009); * Statistics Estonia (2008)

130
It is obvious that new and improved products result from development projects (i.e.
innovation) in the past and therefore can be used as measures of projectization.
Estimations in Table 3 use the model of Turner et al. (2008 and 2009) but with a
little different (and more recent) data. For the EU the bottom line result (14.5 per
cent in economy by innovation in SMEs) is slightly higher, but the difference is not
considerable and explicable. For Estonia, this indicator is calculated using different
source the database of Statistics Estonia (2008)7. Surprisingly, there is almost no
difference between the findings of Turner et al. (2009) and the data of Statistics
Estonia (2008). On the basis of these two items is possible to estimate the overall
projectization level for different countries, as presented in Table 4.

Table 4. Overall projectization levels of the EU and Estonia

The share (%) of project activities: EU Estonia Est./EU
a) gross capital formation (% of GDP) 20% 33% 1.6
- SMEs in value added 58% 76% 1.3
- new/improved products in SMEs 25% 25%
b) - in economy by innovation in SMEs 14% 19% 1.3
Overall projectization level (a + b) 35% 52% 1.5

These estimations confirm that the share of project activities accounts for more than
one third of the EU economy and more than a half of the Estonian economy. So the
EU level is slightly over the world average, but Estonia is probably among the
leaders8 in the world.

Recalling the classification of environments of projectification (or three models of

project organisations) by Ekstedt (2011) it is evident that the first item (a) is related
to project-based and the second item (b) to project-supported organisations (or
activities). The overall picture is presented on Figure 3.

Figure 3. The shares of causers of projectization for the EU and Estonia.

7
Indicator RDI613: Turnover of product innovators by number of persons employed
8
The world leader is possibly China where the share of capital formation in GDP is solely
more than 40 per cent

131
The situation depicted (see Table 4 and Figure 3) may raise an obvious question is
it plausible? Because the overall index is a sum of two items, it is worthwhile to
discuss the items one by one.

The first item the share of project-based activities has been accounted simply, by
the share of gross capital formation in GDP. This is based on common statistics and
by using the same source information (World Bank data) with almost guaranteed
reliability and comparability. So the remaining questionable aspect is its relevance
is the share of gross capital formation in GDP related to the level of projectization?
As the gross capital formation includes all (private and public) investments in fixed
assets, changes in inventories, and net acquisitions of valuables, it is possible to
claim out that the activities behind it are primarily, but perhaps not entirely project-
based. It means that there may be some noise and the real share of project-based
activities may be smaller. Comparing the situation across countries (see Table 2),
including collating the EU and Estonia (see Table 4 and Figure 3) there is probably
no reason to speculate that the noise factor for one particular country (or region)
would be larger or smaller than for the others. This means that the absolute share or
project-based activities may be a little doubtful, but the comparison across countries
or regions can be taken seriously. According to Table 4 and Figure 3, the share of
project-based activities in Estonia is about 1.6 times higher than in the EU, and this
fact is quite credible.

The second item the share of project-supported activities has been accounted in a
more sophisticated way, using statistics (the share of SMEs in value added or GDP)
and research results (the share of new / improved products in the turnover of SMEs).
Also here the reliability and comparability of statistics is almost beyond doubt and
so the remaining questionable aspects are: 1) the quality of research results used and
2) the relevance of the calculated indicator itself. Concerning the first aspect, the
amazing concurrence in the findings of Turner et al. (2009) and the data of Statistics
Estonia (2008) (see Table 3) should be pointed out. Of course, a concurrence of the
results of two studies9 is not enough to make broader generalizations. Thus, further
research possibly comparative across countries and later, over time is needed.
Concerning the second aspect, there are also a few questions that need to further
clarification. For instance, the proportions of durations of product development (i.e.
projects) and their after-effects (i.e. the life cycles of new/improved products). It is
generally known that the life cycles of products (services) are shortening, but there
is less (comparable) evidence about the durations of development projects.

Considering the aforementioned circumstances, the conclusion is similar: even there

may be some doubt about the absolute share or project-supported activities, the
comparison of countries, including the EU and Estonia, can be taken more seriously.
So we must realise that in Estonia the share of project-supported activities is 1.3
times and the overall projectization level nearly 1.5 times higher than in the EU.

9
The researches concern two EU member countries Estonia (Statistics Estonia 2008) and
Ireland (Turner at all 2009), but the limited sample is good because the first country is new and
the second country is an old member of EU.

132
4. Conclusion and Policy Implications

For conclusion, it should be emphasised that projectization and projectification (or

temporalisation) are objective developments, caused by several other developments
in contemporary society such as the servicefication of economy. The carried out
examination of projectification shows tight interconnections between the discerned
levels societal, organisational and personal projectification. Finally, a somehow
paradoxical issue should be pointed out the need for defence of permanence in
order to support the projectification and/or to cope with it. This is briefly the basis,
used to outline the recommendations for the design of policies and strategies.

On societal level, the main concern should be the development of permanency, i.e.
permanent institutions, acting as a counterbalance to increasing projectification on
organisational, as well as on personal levels. One of such institutions might be the
classical marriage, which was clearly dominating a century ago, but during the past
century was more and more replaced by cohabitation or unregistered (or common-
law) marriage. Obviously, this refers to the interconnections between personal and
societal levels and is (almost) discarding the organisational level.

Another important topic is the public funding. It is generally known that during the
last decades, the balance in public funding has been significantly shifted the share
of permanent financing (budget allocations to permanent organisations and
activities) has decreased and the share of temporary (project-based) financing has
increased. This has concerned several fields of activities, including culture, social
work, as well as scientific research and (regional) development. As described in
Section 2, this has caused massive projectification of these fields, including public
administration. The most serious antagonism is probably in the last field, because
public administration should be permanent by its nature. Hereby I would like to
underline that temporary (project-based) financing is not bad in general it has
certain positive consequences, which have been proved, but the permanent activities
and organisations are also still necessary and these must be financed by sufficient
permanent budget allocations. Otherwise, we shall steadily have big numbers of
pseudo-projects, used to finance permanent (or long-term) activities with temporary
(or short-term) sources. In my opinion, this will negatively affect the sustainability
of still necessary permanent organisations and certainly not support the defence of
permanence. In other words, this is the question of a good balance of permanency
and temporality in society, having also influence on the organisational, as well as the
personal levels.

An issue I need to stress on the societal level is the necessity of general development
of project management. Considering the overall projectization levels (see Section 3)
it is possible to state that all governments should give much more credit to project
management. In other words, there is a need for suitable policies and this claim is
valid for most governments, including the EU but especially for more projectified
countries, including Estonia. Because most organisations today need more qualified
project management personnel, such policies will influence the organisational level,
as well as the personal level, providing better employment and salary opportunities.

133
On organisational level, the most all-embracing subtopic is probably the generation
and utilization of knowledge and organisational learning. As stated in Section 2, this
is actually universal for different organisations and also networks development
coalitions, including business and spatial systems. So this is once again showing
tight interconnections between the levels and a reason to treat networks seriously.

When projectification is penetrating deeper on the societal level or (in other words)
in the (business) environment of organisations, an organisation is probably not able
to move against the stream. It means that organisations should align their strategies
according to the stream of projectification and try to benefit from that. The existing
(and generalised) empirical experience is showing that it will lead to the application
of a new management paradigm, which embraces the empowerment of temporary
organisations (or teamwork), process orientation and other approved innovations in
management and governance of organisations. And here is also a place to remember
the defence of permanence. In organisational context it means a good balance of
permanent and temporary structures within an organisation, and/or within a network
on stronger ties (like a supply chain network). Finally, I would like to remind that
strategies on the organisational will cause influences on societal and personal levels.
The best example here is the Human Resource Management (HRM), where the need
for boundary-spanning HRM strategies should be pointed out.

On personal level, the most important topic is the work relations, impersonated by
work contracts. As one party of a work contract is usually an organisation, it is also
belonging to organisational level, but as an employee is usually the weaker party,
it is more useful to propound it here. It is obvious that there is an increasing need for
more temporary and changing and thus, more flexible work relations. At the time we
must not forget that their personal lives of (most) people are (and probably remain to
be) more long-term oriented. It means that if society is ready and willing to enable
more flexibility in work relations and work contracts (which is probably the interest
of the employers, i.e. organisations), there must be a counterbalance additional
social securities for the employees, what will increase their stability.

In my opinion, it is not possible to propose something universal for the personal

strategy of an individual. People are different and a suitable strategy will mainly
depend on the fact, if he/she is a project man/woman or if he/she prefers more
permanent work. Project work is often described as fascinating, innovative, creative
etc. and permanent work as tiresome, boring, routine etc. Even the share of project
work is increasing, the routine work will obviously not disappear and there will be a
definite amount of routine work and positions in future as well. In my opinion, very
few people are pure project men/women, nor interested only in permanent work.
Most people are a combination of project man/woman and permanent worker and
are ready to adapt to the situation on the labour market. It means that also on the
personal level, the main question is about a suitable balance between temporary and
permanent, but on this level it also includes the personal lives of people.

Finally, I would like to point out something that is characteristic on all levels the
balance between the temporary and the permanent.

134
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