Diffusion of innovations: Theoretical perspectives and empirical evidence

Abstract

This paper attempts to review the theoretical and empirical perspectives of innovation-diffusion literature. The objective of this paper is to develop a heuristic framework by reviewing the existing studies for analyzing the diffusion of innovation and its outcome in different sectors. The formal theoretical and empirical literature on technology diffusion that emerged in the fifties with the epidemic approach has been followed by a voluminous literature spanning different disciplines. From the different strands of literature on analyzing the process of diffusion, the paper finds that there is considerable heterogeneity within theoretical approaches with respect to the process of diffusion. It seems that innovation and diffusion are a complex process that hinges inter alia upon the nature of innovation, adopters' characteristics, institutional context and that all these vary over the time and space.

Keywords:

• adopters' characteristics
• innovation
• institutional context
• technological diffusion

Disclosure statement

No potential conflict of interest was reported by the author.

Acknowledgements

I would like to thank the two anonymous referees for their valuable comments on the paper. I am indebted to Prof. K J Joseph and Prof. U S Mishra for their valuable comments on this paper. I would also like to thank all the participants of my PhD review presentation, held in Centre for Development Studies, Thiruvananthapuram, Kerala. The necessary disclaimer applies.

Notes

1 Technological change is defined as the advance of technology, such advance often taking the form of new methods of producing existing products, new designs which enable the production of products with important new characteristics, and new techniques of organization, marketing and management (Mansfield 1968). The first stage is the invention process, encompassing the generation of new ideas. The second stage is the innovation process with the development of new ideas into marketable products and processes. The third stage is the diffusion stage in which the new products and processes spread across the potential market.

2 When the individual learns of the existence of the new idea but lacks information about it is known as the adoption stage. Developing interest in the innovation and seeking additional information about it is the interest stage. For evaluation stage the individual makes mental application of the new idea to his present and anticipated future situation and decides whether to try it. In trial stage, the individual applies the new idea on a small scale in order to determine its utility in his own situation and finally in adoption stage, the individual uses the new idea continuously on a full scale (Rogers and Shoemaker 1971).

3 System could be national, regional or sectoral.

4 Consequences of diffusion are categorized as: functional versus dysfunctional, direct versus indirect and manifest versus latent. If effect is desirable, then it is functional; and if it is undesirable, then it is considered as dysfunctional. Similarly, direct versus indirect consequences depend on whether the changes in a social system occur in immediate response to an innovation or as a result of the direct consequences of an innovation. Finally, manifest versus latent consequences rely on whether the changes are recognized and intended by the members of a social system or not (Rogers and Shoemaker 1971, 17).

5 Windfall profits could be measured in social as well as economic terms. An example of social return could be the prestige that the innovator of consumer products may obtain by being the first to use a new idea (Rogers and Shoemaker 1971).

6 ‘Direct consequences are those changes in a social system that occurs in immediate response to an innovation while indirect consequences are changes in a social system that occurs as a result of direct consequences of an innovation' (Rogers and Shoemaker 1971, 17).