D11.3: Economic aspects of mobility and identity

Title: DIFFUSION OF INNOVATIONS (DOI)

The theory of the “Diffusion of Innovations” (DoI) is based on the research of Everett M. Rogers described in his 1962 book “Diffusion of Innovations”. The theory itself describes the process by which an innovation is communicated through certain channels over time among the members of a social System. In other words, the study of the diffusion of innovation is the study of how, why, and at what rate new ideas and technology spread through cultures. To this regard, the theory of Rogers is an excellent resource to develop strategies in order to enable the diffusion of complex and controversial technologies in society.

Adoption is similar to diffusion, except that it deals with the psychological processes an individual goes through, rather than an aggregate market process, which is described by the process of diffusion. 

The DoI theory especially focuses on the following core topics, which will be described in the following sections: 

1. Adopters 

2. Key innovation characteristics 

3. Stages of adoption 

Adopters

In his research, Rogers proposed that adopters of any new innovation or idea could be categorised as innovators (2.5%), early adopters (13.5%), early majority (34%), late majority (34%) and laggards (16%). Looking at the two extremes of the described groups, “early adopters” tend to adopt new innovations very fast, as they embrace change and are usually educated in the relevant field of the innovation being looked at. On the other hand, the adoption group of the “laggards” will adapt very late, as they tend to be resistant to change. Using the market for mobile services as an example, the early adopters tend to be educated, technology accepting people, who can afford to use such newly introduced mobile services. Furthermore, this group has the ability to understand the complexity of mobile services and their value added, even thought the level of uncertainty of the success of an innovation could be quite high (higher risk propensity). For the group of laggards however, this is ultimately turned to the opposite. The characteristics for the remaining adopter groups can be found in the following table:

Table : Characteristics of adopter groups

Moreover, the adopter groups can be placed into a bell curve (cf. and for details) based on standard deviations from the mean of the normal curve, provided a common language for innovation researchers. Each adopter’s willingness and ability to adopt an innovation would depend on their awareness, interest, evaluation, trial, and adoption (cf. Chapter ). People could therefore fall into different categories for different innovations.

Figure : Adopters Bell curve

Figure : Cumulative adoption of an innovation over time, resulting in the S-shaped adoption curve

As a real life example for the cumulative adoption of an innovation over time, the growth of the Internet is analysed in :

Figure : Cumulated growth Internet users in the world 1995-2010

Key Innovation Characteristics

For the adoption itself, certain characteristics can be observed: 

1. Relative Advantage: The degree to which the innovation is perceived as being better than the practice it supersedes

2. Compatibility: The extent to which adopting the innovation is compatible with what people do

3. Complexity: The degree to which an innovation is perceived as relatively difficult to understand and use

4. Trialability: The degree to which an innovation may be experimented with on a limited basis before making an adoption (or rejection) decision

5. Observability: The degree to which the results of an innovation are visible to others

Following, the presented innovation characteristics are applied to the case of mobile telecommunications and its behaviour to adoption: 

1. Relative Advantage:

   1. Availability/reachability of the subscriber 

   2. Communicate (almost) anywhere / anytime 

   3. Personal device(s) 

2. Compatibility:

   1. High compatibility in society, as flexibility and reachability become more important. 

3. Complexity:

   1. Low to medium: 

      1. Basic functionality (e.g. telephony) can be used by everyone being capable of using a standard, fixed-line telephone. 

      2. Advanced features (e.g. SMS) need further training to use them. 

4. Trialability:

   1. High: A potential customer can subscribe to a prepaid contract for testing the technology and later on switch to a “normal” subscription based contract.

5. Observability:

   1. Reachability of the customers anytime and anywhere. 

   2. More and more people are using mobile phones and services. 

   3. People using mobile phones can easily be observed by non-users. 

   4. The concept and benefit of mobile telephony is easily observable by non-users.