Adoption of innovations

The other three factors take account of the imperfect information about the benefit of an innovation. Because the adoption of an innovation is associated with risk of failure, Rogers (1995) calls the diffusion an uncertainty-reduction process. Alternative innovations are not only valued by potential adopters by the promised benefit but also by the risk of failure to deliver the promised benefit. Conqjlexity of an innovation increases uncertainty, whereas observeability, the degree to which the result of an innovation is visible to others, and friability, the degree to which an innovation can be experimented with, reduce uncertainty for potential adopters. Uncertainty is able to disparage the expected value of benefit, whereas relative certainty can compensate a lower utility of a variant. It can be expected that these attributes support the international diffusion of an innovation as well. A country has therefore an international advantage if other coimfries have better access to information on innovations adopted there. 

Diffusion mechanisms are developed in the more recent economic adoption models other than the epidemic models. The mechanisms of the spread of innovation are either learning effects, i.e. changes in the prior beliefs of potential adopters of the profitability of an innovation, or changes in the stimuli of adoption over time (threshold models) (Thirtle, Ruttan 1987, p. 108). First, different beliefs of firms about the value of an innovation can explain a variance in the date of adoption. Firms then learn about the true profitability of an innovation over time, modify their beliefs and either adopt or reject an innovation (Stoneman 1980). Firms that have a better understanding about the prospect of a profitable innovation would adopt a subsequently successful innovation earlier than other firms. 

A special application of the adoption theory is the lead user model of Eric von Hippel. In the next section I discuss the relevance of the lead user model for the lead market theory, before turning to the literature on the geographic dimension of the adoption process. 

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Small-scale reactors have more advantages than large-scale reactors in variety of energy utilization, construction, maintenance and adoption of innovative technologies, while the latter have scale merits in construction cost. The nuclear energy utilization of small-scale reactors are ship propulsion, electricity generation, heat supply, and sea water desalination, etc. Construction and maintenance for small-scale reactors can be made in factories exclusive use for them, but not at the site of the plant. In small-scale reactors, the safety can be enhanced sometimes by new technologies. 

Establishment of corporate priorities and adoption of innovative practices... 

In model-building and estimation, the within-coimtry diffusion is concerned with the diffusion pattern, the diffusion curve. The cross-border diffusion analysis pursues the question of the international order of adoption of innovations and the time-lag between the first adoption of an innovation by a (lead) country and the following adoption by other (lag) countries. Traditionally, diffusion theory and empirical studies have considered the diffusion process within a country and neglected to explain the national order of adoption of an innovation (Audretsch 1996, p. 110, Dekimpe et al. 1998b, p. 5). Even marketing studies which took the order of countries adopting an innovation into consideration were mainly focussed on the effects of the time lag on the form of the diffusion curve, for instance... 

The diffusion of innovation is the process of adoption of an innovation by users. The diffusion begins when the innovation is already introduced in the market. Diffusion studies therefore do not consider the innovation process explicitly. The fact that the adoption of innovations by users does not happen at the same time but instead requires a considerable amount of time is explained by three distinct phenomena first, the diffusion of information on innovations second, changes in the preferences of users after the adoption of the innovation by other users, and third, changes in the adoption stimuli such as post-invention improvements of the innovation when user needs are heterogeneous. ... 

The relationship between early adopters of innovations and followers is addressed in the lead user model developed by Eric von Hippel (1988). In analysing the sources of innovations in the industry of professional instruments, Hippel (1976) discovers that a majority of the innovations were invented not by manufacturers of the respective product line but by users of instruments. Hippel explained these user inventors with different benefits of new products for manufactures and users. Sometimes users can yield a higher benefit of a new product than manufactures, for instance if manufactures cannot gain market share with a new product but would instead cannibalise their existing products. If users profit more from innovations they have a higher incentive to innovate. 

The creation of complementary assets is not always a direct response to the introduction of innovations. Complementary assets that have been designed for otlier applications can nevertheless facilitate the adoption of innovation designs not directly related to them. Complementary goods can include information and telecommunication infrastructure, retail networks and other types of infrastructure. New innovations use these general assets. For instance, purchases via the internet were facilitated by the use of credit cards. Countries in which credit cards are more common have a lead in the adoption of e-commerce services over otlier countries in which credit cards are slowly taking off (Economist 1998). 

The adoption of innovation spurred the investment in science and technology in these countries and not vice versa. 

The existence of lead markets requires that the stimuli of adoption of innovatic ns vary internationally. In the theoretical consumption model the stimuli included the preferences, the prices of different designs and the income. The likelihood of a lead market existing therefore increases with the international variety of demand preferences and market conditions. If the stimuli of adoption vary internationally, countries prefer different innovation designs. If the stimuli were equal from coim-try to country, there would be a globally interspersed pattern of adoption of innovations no regional market would actually lead the international adoption of an innovation. 

Third, sometimes it appears that dominant firms play a more important role in the adoption of innovations than admitted in this thesis. For instance, Microsoft has been pictured as a monopolist able to impose innovation designs on world markets together with its latest software releases. Yet, even multinational firms respond to local demand and do not ignore it, and even large firms are biased towards home markets. The lead market attribute has been an explanation of the international success multinational firms enjoy since Vernon s international product life cycle theory. 

This programme is based upon many years of experience of adoption of innovative technologies in didactic activities at Politecnico. 

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