Diffusion of Innovations

Diffusion of Innovations DOI theory sees innovations as being communicated through certain channels over time and within a particular social system (Rogers, 1995). Individuals are seen as possessing different degrees of willingness to adopt innovations and thus it is generally observed that the portion of the population adopting an innovation is approximately normally distributed over time (Rogers, 1995). Breaking this normal distribution into segments leads to the segregation of individuals into the following five categories of individual innovativeness (from earliest to latest adopters): innovators, early adopters, early majority, late majority, laggards (Rogers, 1995). Members of each category typically possess certain distinguishing characteristics as shown below:

* innovators - venturesome, educated, multiple info sources

* early adopters - social leaders, popular, educated

* early majority - deliberate, many informal social contacts

* late majority - skeptical, traditional, lower socio-economic status

* laggards - neighbours and friends are main info sources, fear of debt

When the adoption curve is converted to a cumulative percent curve a characteristic S curve (as shown in the first figure below) is generated that represents the rate of adoption of the innovation within the population (Rogers, 1995). The rate of adoption of innovations is impacted by five factors: relative advantage, compatibility, trialability, observability, and complexity (Rogers, 1995). The first four factors are generally positively correlated with rate of adoption while the last factor, complexity, is generally negatively correlated with rate of adoption (Rogers, 1995). The actual rate of adoption is governed by both the rate at which an innovation takes off and the rate of later growth. Low cost innovations may have a rapid take-off while innovations whose value increases with widespread adoption (network effects) may have faster late stage growth. Innovation adoption rates can, however, be impacted by other phenomena. For instance, the adaptation of technology to individual needs can change the nature of the innovation over time. In addition, a new innovation can impact the adoption rate of an existing innovation and path dependence may lock potentially inferior technologies in place.

Diffusion of innovations theory was formalized by Everett Rogers in a 1962 book called Diffusion of Innovations. Rogers stated that adopters of any new innovation or idea could be categorized as innovators (2.5%), early adopters (13.5%), early majority (34%), late majority (34%) and laggards (16%), based on a bell curve. Each adopter's willingness and ability to adopt an innovation would depend on their awareness, interest, evaluation, trial, and adoption. Some of the characteristics of each category of adopter include:

* innovators - venturesome, educated, multiple info sources, greater propensity to take risk
* early adopters - social leaders, popular, educated
* early majority - deliberate, many informal social contacts
* late majority - skeptical, traditional, lower socio-economic status
* laggards - neighbours and friends are main info sources, fear of debt

Rogers also proposed a five stage model for the diffusion of innovation:

1. Knowledge - learning about the existence and function of the innovation
2. Persuasion - becoming convinced of the value of the innovation
3. Decision - committing to the adoption of the innovation
4. Implementation - putting it to use
5. Confirmation - the ultimate acceptance (or rejection) of the innovation