Creating an industry narrative for disruptive technology is difficult and often takes senior

talent to be effective. Consider hiring a creative PR team or working with a contractor who
understands technology and has experience with emerging tech. Professional PR efforts can
get your technology into the current media conversation.

10. A Community Of Early Adopters

Stay in touch with early adopters so that you can learn more about what is working and what
is not working. Bring them into your storytelling, and give them the platform so they can tell
their stories as they relate to your solution.

You can do this by creating a customer council, co-speaking at industry events, developing
joint-bylined articles or collaborating on content marketing.

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LESSON 5: TECHNOLOGY DIFFUSION

Definition of Technology Diffusion

• Diffusion is the process by which a new idea or new product is accepted by the market.
• Technology Diffusion means the spread of applications / usage of a new technology and
its related products, services or processes from one nation to another; from one entity to
another; from one industry to another; from the owner entity to user or supplier; and from
current user to the prospective user.
• Technology Diffusion means the study of how, why, and at what rate new ideas and
technology spread across the economy
Throughout the developed industrial economies (and increasingly in developing industrial
countries), there has been a great increase in recent years in policy and programmatic
initiatives to promote the diffusion of technology. The effective employment of technology
has been associated with:

➢ Industrial competitiveness,

MGT 314-Innovations Management Notes

➢ productivity and efficiency,
➢ economic development,
➢ business growth,
➢ business flexibility,
➢ quality,
➢ the maintenance of high-wage jobs,
➢ the support of further rounds of innovation,
➢ customers,
➢ consultants,
➢ peer firms,

Attention has been paid not only to specific policy measures that might accelerate technology
diffusion and tighten links between technology developers and users, but also to the creation
and nurturing of supportive systems and infrastructures for technology diffusion.

General Typology of Technology Diffusion

Technology diffusion involves he dissemination of technical information and how-how and
the subsequent adoption of new technologies and techniques by users. In this context,
technology includes ―hard technologies (such as computer-controlled machine tools) and
―soft technologies (for example, improved manufacturing, quality, or training methods).

Diffused technologies can be embodied in products and processes. Although classic models
of technological development suggest a straightforward linear path technology can diffuse in
multiple ways and with significant variations, depending on the particular technology, across
time, over space, and between different industries and enterprise types. Moreover, the
effective use of diffused technologies by firms frequently requires organizational, workforce,
and follow-on technical changes.

Technology diffusion can be contrasted with technological innovation, which emphasizes the
development of new knowledge, products, or processes, and government-oriented technology
transfer, which frequently seeks to shift advanced technology out of laboratories into
commercial use.

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In many cases, diffused technologies are neither new nor necessarily advanced (although they
are often new to the user), and they may be acquired from a variety of sources, including: -
private vendors, public technology centers, government laboratories, and universities.

Technology diffuses through the following ways:

➢ Various forms of training
➢ internal ―catch-up efforts of firms,
➢ mobility of skilled labor,
➢ the activities of professional societies
➢ trade unions
➢ scientific press,
➢ varied forms of informal knowledge trading
➢ research
➢ and such practices as reverse engineering

Challenges in technology diffusion

➢ Potential users face uncertainty information and learning costs, and other externalities
which may result in under-investment in available technologies;
➢ Potential suppliers of information and assistance also face learning, may lack
expertise, or face other structural barriers in promoting the diffusion forwarding
technologies.
➢ System-level factors, such as the lack of standardization, regulatory impediments,
weaknesses in financial mechanisms, and poorly organized inter-firm relationships,
may also constrain the pace of technology diffusion.
• In the context of rapid international flow of information, and capital and increased global
competition, it has also been argued that strategic national and regional efforts to maintain
industrial competitiveness depend not only on innovativeness, per Se, but more than ever
on the diffusion, of the application, and further incremental improvement of known
technologies.

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Addressing technology diffusion concerns

1. Awareness-building and technology demonstration. These measures seek to make

potential users more knowledgeable about available technologies, their possible
applications, and their benefits and costs. For example:-

• Demonstration services are offered where manufacturing of computers, control

systems, and software are available for potential users to see and try.
• Demonstration of new technologies to firms, often extending to hands-on training
and pilot production. A method of awareness-building attracting increasing
interest is benchmarking.
• Performance Benchmarking Service which allows companies to compare their use
technology with that of comparable and best practice firms
2. Information search and referral services. These efforts aim to reduce the
information search costs associated with technology diffusion. Information services
often add further value by qualifying information requests and matching user needs
with appropriate resources.
3. Technical assistance and consultancy. This encompasses a wide band of measures
which support experts to assess business problems, identify opportunities to upgrade
technologies and Industrial practices, and assist in implementation. These measures
see to address limitations of expertise among both users and suppliers of technology
and stimulate and assist firms to take action (or, in some cases, not to act on an
undesirable investment).

4. Training. The effective deployment of technology and improved operational

technique invariably involves changes in human capital requirements. A very
common technology diffusion measure is thus training, conducted in many different
forms, inc1uding on-the job training, classroom training, management, seminars,
team-building workshops, and distance learning.

5. Collaborative research and technology projects- to address the gaps between

technology development and deployment, (a range of collaborative public-private
research mechanisms have been established.)These measures also seek to shorten the
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 time taken to commercialize new technological innovations and, through industry
involvement, focus research on key needs and opportunities often, collaborative
research efforts are embodied in the numerous applied technology centers.

6. Personnel exchange and the support of R&D personnel. Potential users of

technology, especially if small or midsized enterprises may lack the internal experts to
absorb new technologies or they may lack resources to app1y to existing personnel
new research and technology projects.

7. Standardization. Uncertainty about the compatibility of a technology can preset

barriers to diffusion of investments by users. The diffusion of technology can be
accelerated by common agreement between techno1ogy deve1oprs and user‘s
standards and technological compatibility.

8. Financial support. These measures are intended to reduce financial constraints

among users associated with the initial or ongoing costs of adopting new
technologies. Measures can include direct financial support or subsidies to enterprises,
through grant loans, or interest write-downs. Other mechanisms are loan guaranties
often associate with third-party lending institutions), equity or near-equity
investments, and various kinds of royalty agreements.

9. Procurement. Purchasing and specification policies by public institutions and large

private firms can have a role in promoting (or constraining) the diffusion
technologies.

10. Inter-firm cooperation. A series of new programs have sponsored different forms
through inter-firm collaboration to promote technology diffusion. The efforts seek to
resolve common problems and share information and learning, achieve economies of
scale in service provision and technology deployment, and strengthen ongoing
business and technology development relationships.

11. Facilities for technology transfer. A large number of applied technology centers and
other facilities to promote technology transfer should be established. These centers
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 often extend the capabilities of existing research facilities, for example when
associated with universities, or they may be industry-driven initiatives. Centers give a
visible physical presence to technology diffusion policies and house many of the
activities already described, such as information provision, technology demonstration,
and access to new equipment, computers, and software.

12. Macro-policy measures. The overall economic and social environment has
important impacts on technology diffusion. This includes factors such as cycle
stability, the cost of capital, intellectual property protection, environmental regulation,
labour market policy; and tax policy. A typical technology promotion measure is the
offering of tax incentives or favorable depreciation schedules to enterprises that invest
in new technology, new facilities, or in research and development.

Measures to ease regulatory burdens are also common, although in some cases tighter
regulation (for example, in the environmental sphere) can promote introduction of
new environmental technologies.

Theories of Diffusion
a) Innovation Decision Process theory. Potential adopters of a technology progress over
time pass through five stages in the diffusion process.
• they must learn about the innovation (knowledge);
• they must be persuaded of the value of the innovation (persuasion);
• they then must decide to adopt it (decision);
• the innovation must then be implemented (implementation);
• the decision must be reaffirmed or rejected (confirmation). The focus is on the user
or adopter.
b) Individual Innovativeness theory. Individuals who are risk takers or otherwise
innovative will adopt an innovation earlier in the continuum of adoption/diffusion.
c) Rate of Adoption theory. Diffusion takes place over time with innovations going
through a slow, gradual growth period, followed by dramatic and rapid growth, and then a
gradual stabilization and finally a decline.
d) Perceived Attributes theory. There are five attributes upon which an innovation is
judged: that it can be tried out (trialability), that results can be
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 observed (observability), that it has an advantage over other innovations or the present
circumstance (relative advantage), that it is not overly complex to learn or
use (complexity), that it fits in or is compatible with the circumstances into which it will
be adopted (compatibility).
Topic Review Questions:
1. Define the term technology diffusion
2. Explore ways in which technology diffusion takes place
3. Identify and explain some of the challenges that hinder diffusion of technology, give
possible remedies to each of your challenges.

MGT 314-Innovations Management Notes