BUSINESS SCHOOL Entrepreneurship & Innovation MGMT8608

© Mazzarol 2012 all rights reserved

Entrepreneurship & Innovation MGMT8608

TOPIC 6: ADOPTION AND DIFFUSION OF INNOVATION

BUSINESS SCHOOL

The University of Western Australia © Mazzarol 2012 all rights reserved

Learning Outcomes

Understand the process of innovation

diffusion

Review theories of adoption and

diffusion

Recognise the social nature of

innovation diffusion

Understand the innovation decision-

making process within organisations

Understand some of the reasons for

failure of innovation adoption and

diffusion


Case Study Exercise – The Owen Gun

German MP40 SMG

Italian Beretta SMG



American Thompson SMG

British STEN Gun



Australian AUSTEN SMG

Australian Owen SMG


The Owen Gun



Read the case

Discuss the questions • What does this case reveal

about the challenges facing the

adoption of a new, radical

invention and the pathway that

such diffusion can take?

Present your findings


“Everything that can

be invented has

been invented” Charles Duell, 1899

Head of US Patent Office

Source: Bryson, B. (1994) Made in America London: Secker & Warburg, p.114.


Did You Know?


Discussion

What are the key factors driving

technological and demographic change

in the world today?

What impact will these changes have on

how you live and work in the future?

What does this tell us about the way

innovation is diffused throughout the

world?


Innovation & Entrepreneurial Management

Innovation:

Should be on finding ways to enhance competitiveness by converting ideas, processes, technologies and alliances into commercially valuable outcomes

Entrepreneurial Management:

The ability to lead change within a variety of organisational environments, using enterprising behaviour to achieve enhanced outcomes for that organisation and its key stakeholders

The University of Western Australia © Mazzarol 2012 all rights reserved ©Mazzarol & Sneddon 2005

Three Innovation Paradigms

Explanation of

innovation

Determinant of

innovation

Agent of

Innovation

Result

Psychological

Entrepreneurship

The Grunder

(‘amateur’)

Technological

Technological

development

Scientist/

Engineer

Sociological

Market-oriented

Strategy

The professional

manager

Economic Growth & Corporate Development

Source: Sundbo, (1998)

The Creative

Genius

Technology

Push

Market

Pull


Idea generation

Project definition

Problem solving

Design and

development

Marketing and

commercialisation

Product of basic research

Organisation

sub-units

Management and administration

Generating Innovation


Common Misconceptions

It is wrong to believe that

innovation:

• Is always planned &

predictable

• Has thorough technical

details

• Relies on dreams or blue-

sky ideas

• Big projects most important

• Technology is main cause

of success

The University of Western Australia © Mazzarol 2012 all rights reserved ©Mazzarol & Sneddon 2005 Sources: (Laredo and Mustar, 1996)

Users

Production Articles

Colleagues

Technological Research

I N T E R A C T I O N S

Weak Appropriability

Strong Appropriability

Market Science Technology

First series

Pilots

Prototypes

Articles

Feasibility Studies

Simulations

Models

Patents Norms

Fundamental research

Strategic research

Basic technological research

Technical research

Development

Production

Commercialization

Scientific, Technological and Market Development

The University of Western Australia © Mazzarol 2012 all rights reserved ©Mazzarol & Sneddon 2005

Science [S]

Technology [T]

Market [M]

Transfer [ST]

Development [TM]

Commercialization

Scientists Researchers

Technologists Engineers

User Buyers

Transfer apparatus Companies - distribution

Incorporated skills Experimental

schemes Contracts

Procedures Products

Sources: (Laredo and Mustar, 1996)

Models Patents

Software Prototypes

Norms Rules of the game

Trials

Diffusion of products Production of

Certified knowledge

Intermediaries (examples)

Actors

The Technoeconomic Network


R&D team develops prototype of a solution to a problem, in consultation with key stakeholders

Key stakeholders evaluate prototype and become convinced it is a ‘plausible promise’

R&D team and innovative adaptors collaborate to adapt and improve

Adoption of improved technology increases

Adoption by late majority and laggards

Pre-development

Development

Start-Up

Adaptation

Disappearance

Field trials of prototype begin

First commercial sale or unsubsidised adoption

Expansion

Use of new technology becomes routine

Research on new technique begins, often based on a bright idea by inventor

Research in a similar area begins

Wider diffusion begins in pilot area. Improved plausible promise becomes prototype in other areas

INVENTION

INNOVATION

DIFFUSION


Principles of Innovation Diffusion

Innovation diffusion: • A process by which an innovation is

communicated through different channels over time among members of a social system

Key principles: • No innovation spreads

instantaneously

• Diffusion is a spatial & temporal phenomenon

• Late adopters benefit from the experience of early adopters

• Although innovation is a process of imitation and homogenization it ‘clusters and lumps’

Sources: Grubler, (2000)

The University of Western Australia © Mazzarol 2012 all rights reserved ©Mazzarol & Sneddon 2005 Source: Grubler (2000)

Growth of Infrastructures in the United States as a

percentage of their maximum network size

1800

Year

1820 1840 1860 1880 1900 1920 1940 1960 1980 2000

10

20

30

40

50

60

70

80

90

100

1835 1891 1946

CANALS RAILWAYS TELEGRAPHS

OIL PIPELINES

ROADS

AIRWAYS


Ref. G. Moore (1996) Rogers (1995)

MAINSTREAM

MARKET

EARLY

MARKET The

Chasm

Early Stage

Commercialisation

Mainstream Production

Crossing the Chasm


Bowling Alley The

Chasm *

Deal-Driven

Marketing

Early Market

Tornado

Mass Marketing

Main Street

Mass Customisation

Source: Phillip Lay, Making Partnering Work Along the Technology Adoption Life Cycle, Software Developer & Publisher,

July/August, 1997)

Niche Marketing End of Life

A Marketing Perspective


Innovation Decision Cycle

Knowledge

Persuasion

Decision Implement

Confirm

Sources: Rogers (1995)


The Dancing Guy


Discussion

What are the key lessons of the

“Dancing Guy” that relate to diffusion of

innovation?

What does this example suggest about

entrepreneurial leadership and

innovation within organisations?


Motivation

to comply

(mc)

Beliefs

(b)

Evaluation

(e)

Normative

beliefs

(Nb)

Attitude

(Aact)

Subjective

norm

(SN)

Intention

(BI) Behaviour

Theory of Reasoned Action Model

Sources: Ajzen & Fishbein, (1980)


External

Variables

Perceived

Usefulness

Perceived

Ease of Use

Attitude

Towards

Behavioural

Intention to

use

Actual

System Use

Technology Acceptance Model

Sources: Davis, Bagozzi & Warshaw, (1989)


Result

Demonstrability

Job

Relevance Perceived

Ease of Use

Output

Quantity

Intention to use Usage

Behaviour

Technology Acceptance Model 2

Image

Subjective

Norm

Perceived

Usefulness

Voluntariness Experience

Sources: Legris, Ingham & Robinson, (2003)


End of Presentation

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BUSINESS SCHOOL Entrepreneurship & Innovation MGMT8608