Hoorcollege 3 Flashcards
S-curves
A S-curve shows you the relationship between the amount of effort you have to put in an innovation and the performance of the innovation.
Performance = improvements in performance due to
innovation.
Effort = time since inception. The time you have to spent
in order to keep innovation.
What you see in an S-curve:
- With a new technology (or any innovation),
Innovation is slow at first: testing, errors in technology and design, etc. Rapid improvements once technology takes off. Once technology has settled in, it is more difficult to improve the technology. - Time is often on the X-axis. This is usually called ‘effort’ because time may obscure effort increase. Time is simply not the same as effort. Moore’s Law shows this.
Moore’s Law
Moore’s Law explains the improvement of computer chips. Moore’s table shows something like a S-curve. Looking at how much effort it takes to get more transistors on a computer
chip, it takes more effort each year to get more transistors in a chip. So, time is not the same
as effort.
Discontinuous S-Curves
A new innovation may start a new S-curve, slowly (right set of lines) or rapidly (left set of lines) turning the older technology obsolete (= you don’t need the previous technology).
Organizations and S-Curves
S-Curves may help organizations decide:
- When and if to enter a new market.
- When and if to switch to invest in new production methods.
- When and if to invest in new innovations/technology.
- When and if to abandon products.
But it is hard to switch when routines, production, structures, and strategy all match the
dominant design. You will have to completely change the structure of the organization.
Diffusion
Diffusion means that an innovation is spreading around the market. There are three theories about the diffusion of innovation:
- S-curves
- Rogers’ diffusion of innovation model
- Gartner’s Hype Cycle
Diffusion of innovation (Everett. M. Rogers (1931-2004))
The second theory about the diffusion of innovations is Roger’s diffusion of innovation
model. According to Roger, for every innovation, it will take a while before all people accept the innovation. This does not necessarily have to be a technological innovation (e.g., vaccines work the same).
In his curve, there will be the innovators and early adopters who adopt the innovation first. Next, the early and late majority will adopt the innovation. And lastly, the laggards will adopt the innovation.
Rogers said that diffusion is the process by which an innovation is communicated through
certain channels over time among the members of a social system.
Diffusion of innovation is about:
- Adoption of the innovation
- Communication
- Time
- Social system
Adoption of the innovation
Diffusion is an aggregated process over time and across a social system. The adoption of an
innovation is ultimately an individual purchase decision (individual means ‘the ones that will adopt your innovation’, this is not only a customer, but also organizations, governments,
etc.). The innovation-decision process is essentially an information-seeking and information-processing activity in which an individual is motivated to reduce uncertainty about the advantages and disadvantages of the innovation.
The individual adoption of an innovation depends on 5 perceived product characteristics that together determine whether a user will use the innovation:
- Relative advantage:
A user thinks the innovation is useful on top of other innovations. - Compatibility:
An innovation fits another innovation (e.g., mobile phone works the same, looks the same, etc.). - Complexity:
An innovation must be easy to use. - Trialability:
Can you try the innovation before adopting it? To stimulate trialability, a lot of organizations give away 30-days trials. - Observability:
If you see others using the innovation, you will sooner buy the innovation yourself.
Technology Acceptance Model (TAM)
The Technology Acceptance Model (TAM) tells that in order to adopt an innovation, people have to think it is useful (perceived usefulness) and easy to use (perceived ease of use). The relative
advantage, compatibility, complexity, trialability
and observability influence the perceived
usefulness and the perceived ease of use.
Communication
The second aspect of diffusion is communication. This is about how innovation is
communicated through the different adoption groups. This is done in several ways:
- Mass media channels → in the top of adoption curve.
- Interpersonal channels → in earlier and later stages of adoption curve.
Examples of interpersonal channels are your social network (strong vs. weak ties), opinion leader and recommendations to friends. - Hybrid (e.g., influencers).
As an organization, you must communicate and convince people to adopt the innovation.
Time
The third aspect of diffusion is time. Innovation takes time because it is an individual
process. This process goes from ‘knowledge’ to ‘confirmation’.
Knowledge -> Persuasion -> Decision -> Implementation -> Confirmation
There often is a drop in enjoyment after the first use. It also costs time for the society/industry to adopt the innovation. This can be seen in the
curve of Roger.
Social system
The last aspect of diffusion is social system. This is the system an innovation diffuses through. There are a lot of aspects that determine the adoption of an innovation:
- Laws & policies
- Norms, values
- Communication channels
- Networks
Adoption is a social process.
If the innovation doesn’t fit the social system, the innovation will not easily be adopted.
Gartner’s Hype Cycle
The last theory about the diffusion of innovation is Gartner’s Hype Cycle. This theory ties the diffusion of innovation curve with a theory about the critical mass of the diffusion. If you don’t reach the critical mass, the innovation will not be successful and there will not be complete adoption. You need enough people to use the innovation and then there will not be a critical mass.
Critical mass
Everyone from the ‘early majority’ to the ‘laggards’
Chasm
The innovators and the early adopters want technology and performance. The critical mass wants solutions and
convenience. This difference creates a chasm (kloof). You need a change of communication about the innovation for the two groups of people. It is often very difficult to do this and to change the communication. If this is not done well, there will be a chokepoint in which there is no further adaption because people don’t see the use of the innovation. That is what is called the chasm.
The chasm is related to Gartner’s Hype Cycle (see image to the right). If you look at the visibility of technology in society,
then you see a curve like this (which you call a Hype Cycle).
In the beginning there is a technology trigger and
suddenly the technology becomes very popular. Then there is a drop in the visibility and popularity of the technology. After that drop, the innovation will either keep getting less and less popular, or the innovation will get out of the chasm and become more popular again.
Hype cycle and diffusion of innovation curve
You can overlay the Hype Cycle with the diffusion of innovation curve. At the beginning of an innovation there is a lot of attention for the technology and the innovators and early adopters will adopt it. Then, there is a chasm. You have to get out of the chasm with the innovation in order to diffuse the innovation throughout the system.
Hype Cycles
- Most new technologies go through a phase of overenthusiasm.
- Most new technologies fail but may be a success in the future.
- Help to determine when to start investing as an organization, this depends on the organization
Diffusion of innovation: conclusion
- This is a very important model in understanding the adoption of technology.
- However, there is little attention to markets and social change.
- Business model: niche market
- Competition
- Changing environment
- Confusion of individual and system adoption
