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© 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
The University of Western Australia © Mazzarol 2012 all rights reserved
Case Study Exercise – The Owen Gun
German MP40 SMG
Italian Beretta SMG
The University of Western Australia © Mazzarol 2012 all rights reserved
Case Study Exercise – The Owen Gun
American Thompson SMG
British STEN Gun
The University of Western Australia © Mazzarol 2012 all rights reserved
Case Study Exercise – The Owen Gun
Australian AUSTEN SMG
Australian Owen SMG
The University of Western Australia © Mazzarol 2012 all rights reserved
Case Study Exercise – 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
The University of Western Australia © Mazzarol 2012 all rights reserved
“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.
The University of Western Australia © Mazzarol 2012 all rights reserved
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?
The University of Western Australia © Mazzarol 2012 all rights reserved
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
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Idea generation
Project definition
Problem solving
Design and
development
Marketing and
commercialisation
Product of basic research
Organisation
sub-units
Management and administration
Generating Innovation
The University of Western Australia © Mazzarol 2012 all rights reserved
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
The University of Western Australia © Mazzarol 2012 all rights reserved
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
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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
The University of Western Australia © Mazzarol 2012 all rights reserved
Ref. G. Moore (1996) Rogers (1995)
MAINSTREAM
MARKET
EARLY
MARKET The
Chasm
Early Stage
Commercialisation
Mainstream Production
Crossing the Chasm
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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
The University of Western Australia © Mazzarol 2012 all rights reserved
Innovation Decision Cycle
Knowledge
Persuasion
Decision Implement
Confirm
Sources: Rogers (1995)
The University of Western Australia © Mazzarol 2012 all rights reserved
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?
The University of Western Australia © Mazzarol 2012 all rights reserved
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)
The University of Western Australia © Mazzarol 2012 all rights reserved
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)
The University of Western Australia © Mazzarol 2012 all rights reserved
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)