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Smart Contract Adoption in Sarawak’s Construction Industry: A
Schematic Review of Drivers, Barriers, and Innovation Attributes
Haifa Afieqah Hasbi¹, Zulhabri Ismail², Siti Suhana Judi²
¹ Faculty of Built Environment, University Technology MARA, Cawangan Sarawak, 94300, Kota
Samarahan, Sarawak, Malaysia
² Faculty of Built Environment, University Technology MARA, 40450, Shah Alam, Selangor, Malaysia
DOI: https://dx.doi.org/10.47772/IJRISS.2025.910000421
Received: 13 October 2025; Accepted: 21 October 2025; Published: 13 November 2025
ABSTRACT
The construction industry in Sarawak is undergoing a gradual digital transformation driven by initiatives such
as the Sarawak Digital Economy Strategy and the Integrated Project Monitoring System (iPMS). However,
persistent issues—including payment delays, disputes, and inefficient contract management—continue to hinder
project performance. Smart contracts, enabled by blockchain technology, offer a promising solution by
automating contractual execution, improving transparency, and strengthening accountability. Despite these
advantages, adoption in Sarawak remains limited due to regulatory ambiguity, low digital literacy, and
inadequate technological infrastructure.
This study investigates the acceptance of smart contracts in Sarawak’s construction industry by identifying key
drivers, barriers, and innovation attributes influencing adoption. A schematic review methodology was
employed, synthesizing peer-reviewed journals, industry reports, and policy documents. The analysis integrates
institutional theory (regulative, normative, and cognitive pillars) with diffusion of innovation attributes,
including maintainability, reliability, functionality, and usability.
Findings reveal strong regulative support through state-led digitalization policies but highlight critical challenges
such as limited stakeholder awareness, resistance to workflow changes, and uneven ICT infrastructure in rural
areas. To operationalize adoption, the study recommends a multi-stakeholder, phased implementation roadmap
that integrates digital literacy programs, pilot smart contract projects, and regulatory alignment strategies.
Comparative benchmarking with other Malaysian and ASEAN regions is suggested to identify best practices and
scalability potential.
Future research should explore cost–benefit analyses, cybersecurity concerns, and integration of smart contracts
with BIM and iPMS platforms to enable fully digitalized and secure project delivery systems. By aligning with
Sarawak’s digital economy agenda, smart contracts can strengthen efficiency, accountability, and
competitiveness in the state’s construction sector.
Keywords: Smart Contracts, Digitalization, Construction 4.0, Contract Management
INTRODUCTION
Sarawak, the largest state in Malaysia located on the island of Borneo, possesses a unique socio-economic and
geographical landscape that distinguishes its development trajectory from Peninsular Malaysia. Characterized
by vast land areas, diverse topography, and dispersed rural settlements, infrastructure development in Sarawak
faces logistical and connectivity challenges that directly influence its construction practices (Department of
Statistics Malaysia [DOSM], 2024). The state’s construction industry plays a pivotal role in regional growth,
contributing significantly to employment and economic output through public infrastructure, housing, and
energy projects (Construction Industry Development Board [CIDB], 2023). In recent years, Sarawak’s
construction sector has experienced modernization efforts aligned with the Sarawak Digital Economy Strategy
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2018–2022, emphasizing digital transformation, sustainable practices, and the adoption of innovative
technologies such as Building Information Modelling (BIM) to enhance project delivery and governance
(Sarawak Multimedia Authority, 2022).
The construction industry in Sarawak has seen increased digital engagement, spurred by the Sarawak Digital
Economy Strategy 2018–2022 and subsequent infrastructure modernization initiatives. Government-led digital
tools such as the Integrated Project Monitoring System (iPMS) and efforts to increase Building Information
Modelling (BIM) adoption reflect a broader push for transparency, efficiency, and accountability in project
delivery (Sarawak Multimedia Authority, 2022). The construction sector continues to grapple with traditional
issues such as payment delays, disputes, and inefficient contract management, which hinder productivity and
project outcomes (CIDB Malaysia, 2023).
Globally, smart contracts have shown potential to address inefficiencies by enhancing trust among partners
(Chen, He & Chu, 2022; Vionis & Kotsilieris, 2024), reducing transaction and administrative costs (Zheng et al.,
2024; Wang et al., 2023), and minimizing delays in execution (Wahab et al., 2023). In Sarawak, the adoption of
smart contracts and blockchain-based solutions is still at a nascent stage. In broader Malaysian context,
challenges such as ambiguous regulatory frameworks and limited stakeholder awareness continue to hinder
progress (AL-Ashmori et al., 2023). Moreover, local reports highlight the absence of clear policies governing
blockchain-related activities in Sarawak, alongside concerns about technological readiness and infrastructure,
further constraining widespread adoption (The Borneo Post, 2024; The Borneo Post, 2025).
Sarawak provides a distinctive context for examining smart contract adoption in the construction industry due
to its unique geographical dispersion, semi-autonomous governance structure, and evolving digital landscape.
As Malaysia’s largest state, Sarawak’s construction projects often occur across vast rural and semi-urban areas,
presenting logistical and communication challenges that hinder efficient contract administration (CIDB
Malaysia, 2021). The state’s Post-COVID-19 Development Strategy (PCDS) 2030 emphasizes digital
transformation and sustainable infrastructure, offering a supportive policy environment for exploring
blockchain-based innovations (Sarawak Government, 2021). However, the industry remains dominated by small
and medium-sized contractors (SMEs) who face digital readiness gaps and rely heavily on conventional practices
(The Borneo Post, 2025). Combined with regulatory ambiguity arising from localized governance and uneven
workforce digital literacy (MIPD, 2022; Zainuddin et al., 2023), these factors make Sarawak an ideal case to
explore the interplay between innovation drivers, barriers, and attributes influencing smart contract adoption in
a developing yet digitally ambitious construction environment.
Therefore, this study presents results on the acceptance of smart contracts within Sarawak’s construction industry
by exploring stakeholder awareness, identifying key enablers and obstacles, and proposing an implementation
framework. Emphasis is placed on local conditions, including geographic dispersion, public sector readiness,
and technological capacity, to provide a contextualized analysis of adoption potential.
LITERATURE REVIEW
Smart Contracts are self-executing agreements encoded on blockchain platforms in which are recognized for
their ability to automate contract execution (Zheng et al., 2019), eliminate intermediaries, and improve
transaction transparency and trust (Xu et al., 2021). Research shows that blockchain-enabled systems can boost
supply chain visibility significantly and enhancing completeness compared to traditional methods (Hamledari &
Fischer, 2021). These advantages make smart contracts particularly appealing in multiparty construction
environments with complexity, delays, and high administrative burdens.
The literature on smart contract adoption in the construction industry underscores the growing intersection
between digital innovation, institutional influence, and technological readiness. As blockchain-based smart
contracts emerge as a transformative mechanism for automating contractual obligations, researchers have
examined their theoretical foundations, drivers, and barriers through various analytical frameworks. Existing
studies highlight how institutional pressures, innovation attributes, and regional dynamics jointly shape the
trajectory of adoption across different contexts. This section critically reviews prior research to establish the
conceptual underpinnings of smart contracts, the institutional and innovation-based factors influencing their
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adoption, and the regional insights that contextualize their implementation within Malaysia—particularly
focusing on Sarawak’s distinctive construction environment.
Institutional Pressures, Innovation Attributes, and Smart Contract Adoption
Smart Contract adoption in construction must be understood as the outcome of an interplay between institutional
pressures and perceived innovation attributes. Institutional theory posits that organizations respond to regulative,
normative, and cognitive pressures that shape legitimacy seeking behaviour and lead to isomorphism across
organizational fields (Akena & Mwesigwa, 2023; Westphal, 2024). Institutions are structured around three main
pillars which are regulatory, normative, and cultural-cognitive. The pillars together form the foundations for
order and legitimacy within organizations. The regulatory pillar encompasses formal rules, laws, and sanctions
that guide compliance; the normative pillar involves shared values and norms that define what is appropriate or
desirable behaviour; and the cultural-cognitive pillar reflects shared beliefs and meanings that shape how
individuals understand and enact institutional practices. These pillars interact to sustain institutional stability and
legitimacy across social contexts (Diniz Costa Filho & Rodrigues Oliveira, 2022).
Shang et al. (2024) identify 29 institutional factors that include 15 drivers and 14 significant barriers in which
summarized as Table 1.
Table 1: Institutional Drivers and Barriers to Smart Contract Adoption (Adapted from Shang et al. (2024) in
Singapore)
Institutional
Pillars
Drivers
Barriers
Regulative
D1: Government grants & initiatives
D2: Protection against delayed
payments
D3: Improved project transparency
B1: Contractual ambiguity & disputes
B2: Rigidities in change orders
B3: Lack of legal/jurisdictional framework
B4: Absence of procedures in standard forms of
contract
Normative
D4: Top management support
D5: Supply chain partner pressure
D6: Competitor pressure
D7: Client pressure
B5: Lack of client demand/market acceptance
B6: Change-averse top management
B7: Threats to legitimacy & compliance
B8: Reluctance to alter workflows
B9: Reluctance to change technical systems
Cognitive
D8: Compatibility with existing
infrastructures
D9: Availability of training programs
D10: Enhanced contractual
coordination
D11: Enhanced efficiency
D12: Enhanced traceability &
integrity
D13: Enhanced collaboration & trust
D14: Enhanced process consistency
D15: Delegation to middle managers
B10: Low learning capacity
B11: Immaturity of smart-contract technology
B12: Interoperability & scalability challenges
B13: Perceived performance risks
B14: Job security concerns (not significant)
B15: Unclear value/low perceived usefulness
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The evaluation of innovation attributes provides a complementary micro-level lens for understanding adoption
intent. Everet Rogers’ diffusion model highlights attributes such as relative advantage, compatibility, complexity,
trialability and observability as key predictors of adoption. Empirical and theoretical work in blockchain and
Smart Contract domains shows that these attributes remain central: expected efficiency and cost gains (relative
advantage) and compatibility with existing workflows are consistently strong predictors of managerial
willingness to experiment with blockchain-based contracting (Weerapperuma et al., 2025).
Weerapperuma et al., (2025) extend Rogers’ core attributes (Rogers, 2003) by operationalizing nine perceived
innovation attributes (the five (5) classic attributes adding maintainability, reliability, functionality, and
usability), providing a richer diagnostic instrument tailored to construction informatics. The extension is
theoretically warranted in high-reliability industries: construction projects demand high degrees of auditability,
recoverability, and contractual maintainability.
Table 2 explains the extended nine (9) perceived innovation attributes which includes 32 items provide a robust
diagnostic lens to assess organizational intent and readiness. They illuminate how adoption is mediated not only
by technical performance but also by institutional trust, professional values, and perceived risk.
Table 2: Perceived Innovation Attributes (Adapted from Weerapperuma et al., 2025)
Attribute
Measurement Items
Effect/Perception
Perceive
Relative (PR)
Advantage
PR1:
PR2:
PR3:
Increase efficiency and
effectiveness
Aids to economic gains
Increase social prestige
Positive
Positive
Positive
Perceived
Compatibility
(PC)
PC1:
PC2:
PC3:
Organization’s value, experiences,
work, practices and norms
Existing operating environment
(hardware and software)
Organizational need
Positive
Positive
Positive
Perceived
Non-
Complexity
(PNC)
PNC1:
PNC2:
PNC3:
Do not required greater technical
skills
Do not require extra effort in
thinking
Easy to understand and reach up
consensus
Positive
Positive
Positive
Perceived
Trialability
(PT)
PT1:
PT2:
PT3:
Allow checking to suit to the
existing individuals’ knowledge
level
Reduces perceived risks
Able to try out for future adoption
Positive
Positive
Positive
Perceived
Observability
(PO)
PO1:
PO2:
PO3:
Other industry using the same
technology
Other industries have positive
consequences
Positive
Positive
Positive
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Attribute
Measurement Items
Effect/Perception
Positive effects
Perceived
Maintainability
(PM)
PM1:
PM2:
PM3:
PM4:
PM5:
Difficult to modify
Maintains the uniformity of
contract management
Arises portability issues
Arises scalability issues
Requires frequent maintenance
routings
Negative
Positive
Negative
Negative
Negative
Perceived
Reliability
(PR)
PE1:
PE2:
PE3:
PE4:
PE5:
PE6:
Ensure accountability
Enhance the auditability
Encourage disintermediation and
fraud-resistant
Protects confidentiality of the data
Arises recoverability issues
Ensure the permitted accessibility
Positive
Positive
Positive
Positive
Negative
Positive
Perceived
Functionality
(PF)
PF1:
PF2:
PF3:
PF4:
Maintains the effectiveness
throughout the process
Arises interoperability issues
Occurs overlapping with existing
systems
Difficult to customize
Positive
Negative
Negative
Negative
Perceived
Usability (PU)
PU1:
PU2:
Emerges a steep learning curve
Consumes large amount of energy
Negative
Negative
By juxtaposing the institutional drivers and barriers with the innovation attributes and measurement items, it
becomes clear that Smart Contract adoption in construction is multi-dimensional. Institutional factors dictate the
external legitimacy and internal alignment necessary for adoption, while innovation attributes and their
operational metrics explain how individuals and organizations evaluate the perceived benefits, risks and usability
of the technology. Together, these frameworks provide a comprehensive map for understanding, measuring, and
facilitating the transition toward digital contracting in construction.
Smart Contract Adoption in Malaysian Construction: Regional Insights and Challenges
Within the Malaysian construction context, Bolhassan et al. (2022) highlight that the implementation of Smart
Contracts holds notable promise in enhancing project delivery mechanisms. Specifically, the technology
facilitates improved risk apportionment through the automated execution of predefined contractual obligations,
thereby reducing ambiguity in responsibility allocation between stakeholders. Moreover, the use of blockchain-
backed agreements is argued to accelerate dispute resolution by eliminating reliance on lengthy adjudication or
arbitration processes, given that performance outcomes are transparently recorded and verified in real time
(Gabuthy, 2023; Cong & He, 2019). Despite these advantages, significant challenges remain. (Andesta et al.,
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2019) emphasize that the immutability of Smart Contracts in which while ensuring reliability, it can also be
problematic, as errors in coding are irreversible once deployed on the blockchain. This exposes projects to risks
of operational inefficiency or unintended liabilities stemming from human error in contract programming, an
issue also echoed in global construction studies where contract adaptability and legal enforceability are still
under debate (Agapiou, 2023).
Empirical findings from Klang Valley further contextualize these theoretical propositions. Ng et al., (2023), in
their quantitative investigation of adoption drivers, revealed that time management emerged as the most
significant predictor influencing practitioners’ willingness to adopt smart contracts in construction projects. This
finding underscores the pressing concern within Malaysia’s fast-paced urban construction sector, where timely
project completion is directly tied to cost efficiency and client satisfaction (CIDB Malaysia, 2020). Interestingly,
factors traditionally associated with contractual inefficiencies such as dispute frequency, administrative cost, and
late payment that were not found to be statistically significant predictors of adoption in this region. Such results
suggest that the determinants of Smart Contract adoption may be highly context-specific, shaped by the local
industry environment and project delivery priorities. In Klang Valley, where construction schedules are often
compressed due to rapid urban development and market demands, time-related benefits appear to outweigh other
considerations (Shang et al., 2024).
Taken together, these studies indicate that while Smart Contracts theoretically offer wide-ranging benefits in risk
management and dispute resolution, their practical uptake in Malaysia is nuanced. The emphasis on time
management as a critical adoption driver signals the need for policymakers and industry stakeholders to design
implementation frameworks that foreground efficiency gains, while simultaneously addressing technical barriers
such as coding errors and system rigidity. These insights provide valuable groundwork for developing regionally
tailored strategies to foster smart contract integration in Malaysia’s construction industry.
Bridging the Gap: Smart Contract Adoption in the Sarawak Construction Industry
The discourse on smart contract adoption in the Malaysian construction industry has gained momentum in since
2020 with Sarawak providing a distinctive case due to its geographical, logistical, and institutional
characteristics. Smart contracts, powered by blockchain technology, are recognized for their potential to
automate contractual execution, reduce reliance on intermediaries, and enhance transparency in project delivery
(Rathnayake et al., 2022). These benefits align with the challenges faced in Sarawak, where construction projects
are often dispersed across remote and rural areas, compounding issues of contract administration, payment
delays, and dispute resolution (Bamgbade et al., 2024).
Empirical studies within Malaysia highlight promising pathways for smart contract integration. Bolhassan et al.
(2022), drawing on research partly anchored at Swinburne University of Technology Sarawak, proposed a
conceptual framework for adoption, emphasizing digital readiness, organizational support, and regulatory
alignment. Similarly, Jalong (2021) revealed that G7 contractors in Sarawak, representing the highest registration
grade under Malaysia’s Construction Industry Development Board (CIDB) classification, which allows them to
undertake projects of unlimited value, acknowledged the opportunities of digital and automated construction
technologies, though their perceptions also indicated persistent hesitancy due to skill shortages and low
awareness.
From a supply chain perspective, blockchain-enabled smart contracts to have been suggested as mechanisms to
address security of payment and accountability issues within Sarawak’s construction industry. Bamgbade et al.
(2024) found that East Malaysian contractors, including those in Sarawak, recognized the potential of such
technologies in mitigating disputes and ensuring payment certainty. This echoes broader studies that stress the
value of smart contracts for streamlining procurement and strengthening trust among stakeholders (Mong et al.,
2024).
The Sarawak context is further shaped by state-level initiatives to promote digital transformation. The Kenyalang
Smart City project and related infrastructure programs illustrate policy interest in leveraging advanced
technologies to improve governance and service delivery (UKAS, 2025). While these initiatives are not
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construction-specific, they provide an enabling digital ecosystem that could facilitate the integration of
blockchain-based contracts into the built environment sector.
Taken together, these insights suggest that while the theoretical advantages of smart contracts—automation,
transparency, and efficiency are well documented, their uptake in Sarawak remains emergent. The intersection
of geographical challenges, workforce digital readiness, and institutional frameworks requires a regionally
tailored strategy to enable smart contract adoption and realize their benefits in construction project delivery.
METHODOLOGY
Figure 1: Schematic Review Methodology Flow Diagram
Source: Author (2025)
Research Design
This study adopts a schematic review methodology to systematically map, analyse, and synthesise existing
literature on smart contract adoption within the construction industry, with specific emphasis on Sarawak. A
schematic review employs a structured process of identification, screening, categorisation, and visual mapping
of evidence to ensure transparency and replicability (Wolffe et al., 2020). This approach is particularly suitable
for emerging fields such as blockchain-based smart contracts in construction, where fragmented research spans
across technical, legal, and institutional domains (Hamledari & Fischer, 2021; Shang et al., 2024).
Data Sources and Search Strategy
Relevant literature was identified through a comprehensive search of peer-reviewed journals, conference
proceedings, industry reports, and government publications. Databases such as Scopus, Web of Science,
ScienceDirect, and Google Scholar were used, alongside policy documents from CIDB Malaysia, Sarawak
Multimedia Authority, and the Ministry of Infrastructure and Port Development Sarawak. Keywords combined
terms such as “smart contracts”, “blockchain”, “construction industry”, “digitalisation in Sarawak”, and
“Malaysia”.
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Inclusion and Exclusion Criteria
Studies were included if:
1. Examined smart contracts or blockchain applications in construction.
2. Addressed institutional, technological, or organisational factors influencing adoption.
3. Focused on Malaysia or comparable regional contexts.
Exclusion criteria included publications with no relevance to construction, purely technical blockchain studies
without contractual application, and papers lacking empirical or conceptual insights.
Analytical Framework
The schematic review integrates two complementary lenses:
1. Institutional Theory: regulative, normative, cognitive pillars) to identify external and internal pressures
driving or hindering adoption.
2. Innovation Diffusion Attributes: relative advantage, compatibility, complexity, trialability, observability,
and extended constructs, to assess how organisations evaluate and respond to smart contract technology.
Extracted findings were categorised according to the frameworks and synthesised into schematic tables and
diagrams. This enabled cross-comparison between drivers, barriers, and innovation attributes in Sarawak’s
construction context.
Schematic Mapping Process
The review process followed four (4) stages adapted from systematic review methodologies by Turnbull et al.,
(2023)
1. Identification – Compilation of relevant literature and policy documents.
2. Screening – Application of inclusion/exclusion criteria.
3. Categorisation – Coding of findings into institutional drivers/barriers and innovation attributes.
4. Visualisation – Development of schematic tables and diagrams summarising opportunities, challenges, and
adoption pathways.
Expected Contribution
By employing a schematic review, this methodology ensures a structured synthesis of fragmented knowledge
while highlighting contextual differences between Sarawak and other regions. The output serves as a foundation
for constructing an implementation framework that is both evidence-based and regionally tailored (Abdullah et
al., 2022).
FINDINGS AND DISCUSSION
Institutional Drivers of Smart Contract Adoption
The analysis highlights that regulative pressures are the most significant drivers in Sarawak’s construction
industry. Initiatives such as the Sarawak Digital Economy Blueprint 2030 and the iPMS demonstrate strong
government commitment to digitalization, creating a favorable regulatory environment for innovation (Sarawak
Multimedia Authority [SMA], 2021; Economic Planning Unit Sarawak, 2022). Normative drivers, including
client expectations for transparency and efficiency, are gradually emerging, particularly in urban areas such as
Kuching (Bolhassan et al., 2022). Empirical work points to low awareness and resistance among contractors and
industry customers as important constraints to adoption (Bolhassan et al., 2022; Kumar Singh et al., 2023).
Institutional Barriers to Adoption
Despite policy support, barriers remain considerable. Regulatory ambiguity, particularly the absence of legal
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frameworks defining blockchain-based contract enforceability, was highlighted as a key concern (Agapiou,
2023). Normative barriers include entrenched manual practices, resistance to altering workflows, and limited
client demand (Ng et al., 2023). Cognitive challenges such as low digital literacy, insufficient training
opportunities, and skill shortages—especially among SMEs in rural Sarawak—further restrict adoption
(Bamgbade et al., 2024). Additionally, inadequate ICT infrastructure in remote project sites remains a
fundamental obstacle (CIDB Malaysia, 2021; MIPD, 2022).
Innovation Attributes Influencing Adoption
When examined through Rogers’ diffusion of innovation framework and the extended constructs of
Weerapperuma et al. (2025), smart contracts reveal both potential and challenges. Relative advantage is evident
in efficiency gains, cost reduction, and improved payment security (Zheng et al., 2019; Xu et al., 2021). However,
compatibility is mixed; while smart contracts support transparency and accountability, they conflict with
entrenched manual processes (Shang et al., 2024). Complexity and a steep learning curve pose adoption
challenges, while trialability and observability remain low due to the absence of regional pilot projects
(Weerapperuma et al., 2025).
Regional Context of Sarawak
Sarawak’s geographical dispersion and reliance on rural and semi-urban project delivery create a unique adoption
context. Unlike Klang Valley, where time management was found to be the strongest adoption driver (Ng et al.,
2023), in Sarawak the key barriers are related to digital readiness and infrastructure gaps. While G7 contractors
in Kuching demonstrate higher levels of awareness and interest in blockchain-enabled solutions, smaller
contractors in rural regions show limited exposure (Jalong, 2021; Bamgbade et al., 2024). These findings indicate
that adoption in Sarawak is highly context-specific and requires regionally sensitive strategies.
Implications for Implementation Framework
The findings suggest that smart contract adoption in Sarawak should follow a phased and context-specific
pathway. Pilot projects in urban centers can demonstrate feasibility and address concerns of trialability and
observability (Bolhassan et al., 2022). Regulatory clarity, developed in collaboration with CIDB Malaysia and
legal institutions, is essential to build trust (Agapiou, 2023). Workforce training and digital capacity-building
initiatives are necessary to address normative and cognitive barriers (Rahim et al., 2022; Bamgbade et al., 2024).
Finally, targeted investment in ICT infrastructure is vital to ensure that contractors in rural Sarawak are not
excluded from the digital transition (CIDB Malaysia, 2021; SMA, 2021).
A summary of the findings and their implications is presented in Table 3.
Table 3: Summary of Findings and Implications for Smart Contract Adoption in Sarawak
Dimension
Key Findings
Implications
Institutional
Drivers
• Strong regulative support from
government digital initiatives (Digital
Economy Blueprint 2030, iPMS).
• Emerging normative drivers from client
expectations and competitive pressures.
• Cognitive drivers include trust,
efficiency, and collaboration benefits.
• Leverage government policies to anchor
adoption.
• Promote awareness campaigns targeting
clients and contractors.
• Highlight trust and transparency benefits
to strengthen industry acceptance.
Institutional
Barriers
• Regulatory ambiguity on enforceability
of blockchain contracts.
• Resistance to workflow changes and
entrenched manual practices.
• Develop regulatory frameworks and
standard contract procedures.
• Provide training and capacity-building
programs.
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Dimension
Key Findings
Implications
• Low digital literacy, limited training, and
skill shortages.
• Poor ICT infrastructure in rural areas.
• Invest in ICT infrastructure for rural
construction sites.
Innovation
Context
• Clear relative advantage in cost,
efficiency, and payment security.
• Compatibility is mixed: aligns with
transparency goals but clashes with
manual norms.
• High complexity and steep learning
curve.
• Low trialability and observability due to
lack of pilots.
• Concerning maintainability,
interoperability, and coding
immutability.
• Demonstrate feasibility through pilot
projects in urban centres (e.g.,
Kuching).
• Simplify user interfaces and provide
technical support.
• Establish interoperability standards with
existing systems.
• Encourage industry-academic
collaborations to test prototypes.
Regional Context
• Sarawak’s geography (remote, dispersed
projects) complicates adoption.
• Urban contractors (G7) show higher
awareness; rural SMEs lag.
• Digital readiness is uneven compared to
Peninsular Malaysia.
• Tailor adoption strategies to contractor
size and location.
• Focus initial rollouts in urban centers
while planning rural digital inclusion.
• Align with Sarawak’s broader digital
economy initiatives.
Implementation
Framework
• Adoption requires phased, context-
specific strategies.
• Pilot projects are essential for visibility
and risk reduction.
• Regulatory clarity and training are
prerequisites.
• Rural infrastructure investment is critical
for equitable adoption.
• Co-develop adoption roadmap with
government, CIDB, and industry.
Institutionalize training within CIDB
certification.
Promote public–private partnerships for
ICT upgrades.
Monitor pilot outcomes to refine large-
scale implementation.
CONCLUSION
This study explored the acceptance of smart contracts in the Sarawak construction industry using a schematic
review approach that synthesized institutional theory and innovation diffusion attributes. The findings reveal that
Sarawak benefits from strong regulative support through government-led initiatives such as the Digital Economy
Blueprint 2030 and the Integrated Project Monitoring System, which create a favorable environment for
digitalization. However, the uptake of blockchain-enabled smart contracts remains limited due to regulatory
ambiguity, entrenched manual practices, low digital literacy, skill shortages, and inadequate ICT infrastructure,
particularly in rural areas.
Smart contracts demonstrate clear potential in delivering efficiency gains, transparency, and improved payment
security, yet their adoption is constrained by low trialability and observability, as few pilot projects have been
attempted in the state. Compared to urbanized regions such as Klang Valley, where time management has
emerged as the dominant driver, Sarawak’s adoption context is shaped by geographical dispersion, uneven digital
readiness, and institutional capacity gaps. These findings highlight the need for a regionally tailored strategy to
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enable smart contract integration that aligns with Sarawak’s socio-technical realities.
RECOMMENDATIONS
Based on the schematic review findings, the following recommendations are proposed to facilitate the structured
and sustainable adoption of smart contracts within Sarawak’s construction industry. The implementation should
be both phased and multi-stakeholder-oriented, aligning with the state’s ongoing digital transformation agenda.
A multi-stakeholder implementation roadmap is essential to operationalize smart contract integration.
Collaboration among government agencies (such as the Sarawak Multimedia Authority [SMA] and CIDB
Malaysia), contractors, consultants, professional bodies, and technology vendors should be prioritized to ensure
comprehensive readiness and governance. This roadmap may proceed through three interconnected phases:
Phase 1 – Digital Literacy and Capacity Building:
Establish continuous professional development and certification programs that enhance digital literacy, technical
competency, and regulatory understanding among construction stakeholders. Awareness campaigns should target
both public and private sector actors to encourage digital adoption and dispel misconceptions surrounding
blockchain technologies.
Phase 2 – Pilot Smart Contract Projects:
Implement pilot projects within major urban centers such as Kuching, focusing on public infrastructure
initiatives under the Post-COVID-19 Development Strategy (PCDS) 2030. These pilots should evaluate the
technical feasibility, interoperability with existing systems, and the extent of administrative efficiency achieved.
Outcomes from pilot projects will provide empirical evidence to address trialability and observability concerns
identified in this study.
Phase 3 – Regulatory and Policy Integration:
Develop clear and enforceable regulatory frameworks defining the legal validity, contractual enforceability, and
data governance mechanisms of blockchain-based contracts. These should be formulated in collaboration with
legal authorities, industry regulators, and professional institutions to ensure standardization and compliance with
Malaysia’s digital economy policies.
To strengthen scalability and policy benchmarking, Sarawak’s readiness should be compared with other
Malaysian or ASEAN regions such as Klang Valley, Singapore, and Indonesia, where digital contracting and
blockchain adoption are more advanced. Such comparative analysis would highlight best practices, inform policy
harmonization, and identify regional scalability opportunities for Construction 4.0 transformation.
In summary, successful implementation of smart contracts in Sarawak’s construction sector requires an
integrated approach that combines capacity building, pilot testing, regulatory alignment, and regional
benchmarking. This phased, evidence-based strategy will enhance trust, transparency, and accountability,
positioning Sarawak as a leader in blockchain-enabled construction governance.
Future Research
While this study offers a comprehensive synthesis of institutional drivers, barriers, and innovation attributes
influencing smart contract adoption in Sarawak, several research directions remain open for exploration.
First, future empirical studies should validate the schematic framework proposed in this paper using quantitative
or mixed-method approaches. Structural equation modelling (SEM) or regression-based analyses could be
applied to examine the relationships among institutional pressures, innovation attributes, and adoption intent
across different contractor categories. Such evidence would provide stronger policy insights for tailoring
adoption frameworks to local industry conditions.
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
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Second, cost–benefit analyses are needed to evaluate the economic feasibility of implementing smart contracts
across varying project scales. These studies should quantify operational savings, risk reductions, and
administrative efficiency gains compared to traditional contracting systems, thereby providing a business case
for widespread adoption. Parallel to this, cybersecurity concerns—including data privacy, access control, and
vulnerability to hacking or contract manipulation—should be systematically assessed to establish institutional
trust and safeguard digital infrastructure.
Third, future work should examine the integration of smart contracts with existing digital platforms, particularly
Building Information Modelling (BIM) and the Integrated Project Monitoring System (iPMS) used by the
Sarawak government. Exploring these synergies would provide insights into achieving real-time automation,
seamless data exchange, and improved project governance under a unified Construction 4.0 ecosystem.
Lastly, comparative and longitudinal studies between Sarawak and other regions—both within Malaysia and
across ASEAN—should be conducted to assess contextual differences in policy readiness, digital maturity, and
stakeholder engagement. Such research would contribute to developing regionally adaptive models of digital
contracting and inform scalable implementation strategies.
Collectively, these future research pathways will enrich both theoretical and practical understanding of
blockchain-enabled construction, guiding Sarawak and similar jurisdictions toward sustainable, secure, and
interoperable smart contract ecosystems.
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