Innovation and diffusion

This essay is based on readings in a course on technology and innovation in LKYSPP, National University of Singapore. The key ideas of innovation put forward by Everett Rogers are:

• Diffusion is the process by which some innovations are communicated through certain channels over a period of time among members of a social systems. The four major elements are innovation, communication channels, time, and social systems.
• Innovation: Early adopters of innovation are different from late adopters. The nature of innovation determines how acceptable it is. The diffusion curve takes off at 10-25 percent of adoption, at which point a critical mass of people adopt the innovation and introduce it to others through their interpersonal networks. Characteristics of innovation that help understand the pace of their adoption by people are:

1. Relative advantage: How advantageous is the new innovation perceived viz a viz existing methods and tools? Real objective advantage does not matter... what matters is the perception of people about the relative advantages.
2. Compatibility: It is the degree to which a new technology is perceived to be compatible to existing values and norms of the social system of adopters.
3. Complexity: It is difficult to adopt very complex systems. An innovation that is an improvement upon an easy system, or which is easy to use, is readily adopted.
4. Trialability: It should be possible to experiment with the innovation on a limited basis.
5. Observability: it is the degree to which results of an innovation are visible to others.

Most innovations are in the field of technology. Technology reduces an uncertainty in some process by using information about cause and effect relationships in the process.

• Communication channels: These are the channels by which one individuals introduces the new tech to another. The most efficient channel, according to Rogers, is mass media. Interpersonal relation is another channel. Rogers does not mention social networking websites, as they were not existing in her time. She points out that homophily is an important factor in diffusion. That is, if one person is similar in ideas to another, then it is easy for one to exchange ideas with the other. It speeds up innovation. Heterophily is a major challenge in diffusion. I wonder what Rogers would say to big data analytic that bombards a person with ideas and advertisements based on their personality, choices, and preferences.
• Time: There are early adopters and late adopters. The degree in which various classes of adopters adopt a new tech determines its innovativeness. Another important measure is the rate of adoption, i.e. relative speed of adoption of the innovation by the social system.
• Social system: Norms and values in a social system affect acceptance or rejection of the innovation. Many societies do not accept an innovative tech if it goes against their social values. For example, members of some tribe do not take injections because it is against their religion... or belief. Opinion leaders and change agents assist in inducing a community to adopt a new technology.

In a paper titled ‘Turf war and failed alliances’, Ozcan and Santos investigate situations when leaders in two different markets collaborate to develop a new, innovative product. For example, mobile payments system is a convergence of telecommunications and financial services. Mobile gaming apps is a convergence of video games and android software systems. They have found that it is difficult to develop the market for a new product by collaboration if the parties in the deal have a dominant position in their respective markets, or do not have any prior experience of collaboration and inter-dependance.