PurposeWith the uptake of prefabricated construction (PC) facing serious obstacles in China, networked innovation can break the technical constraints while also containing the risks in individual innovation. However, the construction community has paid little attention to PC innovation, especially networked innovation. This study aims to gain deep insights into what impacts the formation and dynamics of a prefabricated construction innovation network (PCIN). With the uptake of PC facing serious obstacles in China, networked innovation can break the technical constraints while also containing the risks in individual innovation.Design/methodology/approachThe research design follows a sequential mixed methodology of qualitative and quantitative data collection and analysis. It first conceptualizes the PCIN based on the quadruple helix model and formulates a corresponding system dynamics model based on causality analysis. After validating the PCIN model using empirical data, simulations are carried out using Vensim PLE software. Finally, this study identifies key factors that promote the formation of PCIN in China through sensitivity analysis.FindingsThe results show that PC predicts a continuous increase in practice as of 2030. The tested drivers all positively influence the formation of the PCIN, with market demand and risk sharing having the greatest influence, followed by competitive pressure, profit government support, scientific and technological advancement and collaborative innovation strategy.Originality/valueThe study makes three major contributions. First, it provides a novel angle for a deeper understanding of the PC innovation. Second, it proposes a new approach for probing the formation and dynamics of the PCIN. Finally, it offers a theoretical reference for promoting the formation of innovation networks and the development of PC.