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DIFFUSION OF INNOVATION

DIFFUSION OF INNOVATION. Yen-Chun CHOU Irfan KANAT Seyedreza MOUSAVI. Spring 2012. There is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than the creation of a new order of things…. Niccolò Machiavelli. Roots of DOI.

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DIFFUSION OF INNOVATION

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  1. DIFFUSION OF INNOVATION Yen-Chun CHOU Irfan KANAT Seyedreza MOUSAVI Spring 2012

  2. There is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than the creation of a new order of things…. Niccolò Machiavelli

  3. Roots of DOI • GabrialeTarde (1903): The Laws of Imitation • The S-shaped curve of the rate of adoption of an innovation • The role of social status • Opinion leadership • Diffusion of cultural traits (1920s and 1930s) • Edwin Loseyinvestigated technological innovations in growing watermelon by personally interviewing farmers in 1930s. • Charles R. Hofferinvestigated the adoption of farm innovations in 1942. • Ryan and Gross published their result about hybrid seed corn in 1943.

  4. Forming The Diffusion Paradigm • Ryan and Gross investigated four main aspects of diffusion (1950): • The innovation decision process • The role of information sources/ channels • The S-shaped rate of adoption • The personal, economic, and social characteristics of adopters

  5. DOI in Rural Sociology

  6. DOI in Other Disciplines

  7. Diffusion of Innovations • Diffusion is the process in which an innovation is communicated through certain channelsover timeamong the members of a social system. • Innovation • Communication channels • Time • Social System

  8. Important Research Questions • How early adopters differ from late adopters? • How innovation characteristics influence rate of adoption? • Why do innovations diffuse in a certain pattern?

  9. Core Theory The categories are highly intertwined, we tried to isolate them as much as we can. • Decision Process • Attributes of Innovations • Characteristics of Adopters • Diffusion Structure • Social System

  10. Innovation Decision Process

  11. Attributes of Innovations The Five • Relative Advantage • Compatibility • Complexity • Trialability • Observability

  12. Attributes of Innovations • Perceived Usefulness • Perceived Ease of Use • Compatibility • Result Demonstrability • Image • Voluntariness Benbasat and Moore 1991

  13. Characteristics of Adopters • Socio-Economic Education, Status, Mobility, Wealth • Personal Empathy, Dogmatism, Abstract, Rational, Intelligent Attitude to Change, Fatalism, Aspirations • Communication Social Participation, Connections, Exposure, Cosmopolite, Knowledge

  14. Characteristics of Adopters • Homophilia • Deviants

  15. Characteristics of Adopters Venkatesh, V., Morris, M. G. M. G., Davis, G. B. G. B., & Davis, F. D. F. D. (2003). User Acceptance of Information Technology: Toward a Unified View. MIS Q., 27(3), 425-478. Agarwal, R., & Prasad, J. (1998). A Conceptual and Operational Definition of Personal Innovativeness in the Domain of Information Technology. Information Systems Research, 9(2), 204-215.

  16. The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man. George Bernard Shaw

  17. Diffusion Structure People differ in their innovativeness. They adopt the innovation at different times. • Innovators (2.5%) • Early Adopters (13.5%) • Early Majority (34%) • Late Majority (34%) • Laggards (16%)

  18. Diffusion Structure Determinants of the rate of adoption • Characteristics of Adopters • Attributes of Innovations • Social System • Communication Channels Bass model

  19. Diffusion Structure Jiang, Z. (2010). How to give away software with successive versions. Decision Support Systems, 49(4), 430-441. Zaffar, M. A., Kumar, R. L., & Zhao, K. (2011). Diffusion dynamics of open source software: An agent-based computational economics (ACE) approach. Decision Support Systems, 51(3), 597-608.

  20. Social System • Katz (1961): “ It is as unthinkable to study diffusion without some knowledge of the social structures in which potential adopters are located as it is to study blood circulation without adequate knowledge of the veins and arteries”

  21. Social System • Diffusion occurs within a social system • The members or units of a social system can be individuals, informal groups, organizations, and/or subsystems - social communicationcan be at the individual, group and community levels • Key elements: effects of norms, roles of opinion leaders and change agents, types of innovation-decision, how social structure affects diffusion

  22. Types of innovation-decision Classical • Optional decision: depends on individual’s willingness, and is independent of the others’ in the system • Collective decision: made by consensus among the members of a system • Authority decision: made by relatively few individuals in a system who posses power, status or technical expertise • Rate of diffusion: A > O > C Organizational

  23. Structure of a System • Formal: patterned social relationships among members • Informal: interpersonal communication networks - from complete lack of structure (equal probability) to small world - opinion leaders as “hubs” • “Compared to other aspects of diffusion research, there have been relatively few studies of how the social communication structure affects the diffusion and adoption”

  24. Rate of Adoption of A New Drug

  25. Communication Networks • “the heart of the diffusion process is the imitation by potential adopters of their near peers’ experiences..” • A communication network consists of interconnected individuals who are linked by patterned flows of information - communication proximity: the degree to which two people in a network who share network links with a common set of other individuals - High proximity is a strong tie and people usually have similar characteristics (homophily)

  26. Influences of Ties • What do you think that strong or weak ties have more influences on innovation diffusion? • Homophily can act as an invisible barrier to the flow of innovations within a system. • The information-exchange potential of links is higher for weak ties (low proximity and heterophily) compared to strong ties • Weak ties work as information intensive link and strong ties serve as relationship intensive link

  27. Critical Mass • A single log in a fireplace will not continue to burn by itself. A second log is present so the heat pass onto the other… When the ignition point is reached, the fire takes off - With more adopters in the system, an innovation is perceived more beneficial - An individual’s actions depends on how many others individuals behave in a particular way

  28. Interactive Innovations • The concept of network effects for an interactive innovation is related to the critical mass - Earlier adopters influence later adopters, and later adopters also influence earlier adopters in a process of reciprocal interdependence • A critical mass must be present before an interactive innovation is perceived as useful to individuals in the system Extension from the classical innovation diffusion which assumes individual’s value is independent from others’.

  29. Why Prior to the Critical Mass • The threshold for adoption varies for different individuals • Early adopters anticipate that the innovation’s rate of adoption will take off in the near future • Providing incentives for early adopters, especially for interactive technology, is a way to reach critical mass sooner

  30. Early Organization-level DOI • Unit of analysis: Reduction of organizations to individuals • Although the unit of analysis was organization, researchers investigated the decisions made by individuals in charge of the organization. • 1970s: the shift from individual DOI to organizational innovativeness. • Instead of studying variables related to more innovative or less innovative organizations, an emphasis was granted to innovation process within the organizations.

  31. Factors of Organizational Innovativeness- 1 • Size of the organization • Larger organizations are more innovative

  32. Factors of Organizational Innovativeness- 2

  33. The Innovation Process in Organizations

  34. Stages of Innovation Process • Agenda-Setting • Occurs when a general organizational problem is defined that creates a perceived need for an innovation • Identifying and prioritizing the needs • Finding the appropriate solution (innovation) • A performance gap can trigger the innovation process

  35. Stages of Innovation Process • Matching • The match between organization’s problem and innovative solution • Investigations to determine the feasibility of the innovation in solving the problem

  36. Stages of Innovation Process • Redefining/ Restructuring (mutual adaptation) • Accommodating the innovation inside the organization • Innovation change and organization change • Radical Innovations • Major changes that require a new paradigm for carrying out some task • Large organizations are more successful in implementation of radical innovations • Radical innovations become less radical and more routine gradually (over time).

  37. Stages of Innovation Process • Clarifying • Addressing the questions regarding widespread use of innovation within the organization • Requires a social construction • Champions play a significant role in this stage

  38. Stages of Innovation Process • Routinizing • Making the innovation a part of the regular activities in the organization • Sustainability (institutionalization) of the innovation • Role of participation: Collective innovation decisions have greater sustainability than do authority innovation decisions • Role of reinvention

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