Forecasting technology diffusion with the Richards model

The Richards model has a shape parameter m that allows it to fit any sigmoidal curve. This article demonstrates the ability of a modified Richards model to fit a variety of technology diffusion curvilinear data that would otherwise be fit by Bass, Gompertz, Logistic, and other models. The performance of the Richards model in forecasting was examined by analyzing fragments of data computed from the model itself, where the fragments simulated either an entire diffusion curve but with sparse data points, or only the initial trajectory of a diffusion curve but with dense data points. It was determined that accurate parameter estimates could be obtained when the data was sparse but traced out the curve at least up to the third inflection point (concave down), and when the data was dense and traced out the curve up to the first inflection point (concave up). Rogers' Innovation I, II and III are discussed in the context of the Richards model. Since m is scale independent, the model allows for a typology of diffusion curves and may provide an alternative to Rogers' typology.     

On the Slowdown of Productivity Growth in the Netherlands 1960–1988: A Macro Economic Vintage Diffusion Approach

This paper presents a simple vintage model that incorporates the idea of the diffusion of new technologies. As a first attempt we use a macro-economic inspired distribution of technologies which are embodied in new equipment. The speed of diffusion depends on expected profits and on accumulated knowledge. The choice of the initial labour intensity stems from the behaviour of firms, however. From our estimation results on Dutch data for the enterprise sector it appears that the speed of diffusion has an impact on the average labour productivity of newly installed equipment such that the productivity paradox can be explained. Due to a decrease in the speed of diffusion in the late seventies and eighties, the growth of the average labour productivity declines whereas the labour productivity growth of the most advanced technologies proves to be stationary during the estimation period from 1960 to 1988.     

Forecasting emerging technologies: Use of bibliometrics and patent analysis

It is rather difficult to forecast emerging technologies as there is no historical data available. In such cases, the use of bibliometrics and patent analysis have provided useful data. This paper presents the forecasts for three emerging technology areas by integrating the use of bibliometrics and patent analysis into well-known technology forecasting tools such as scenario planning, growth curves and analogies. System dynamics is also used to be able to model the dynamic ecosystem of the technologies and their diffusion. Technologies being forecasted are fuel cell, food safety and optical storage technologies. Results from these three applications help us to validate the proposed methods as appropriate tools to forecast emerging technologies.     

ICT demand behaviour: an international comparison

This study aims to provide some empirical explanations for the gaps in information and communication technologies (ICT) diffusion between industrialized countries and especially between European countries and the USA. National macro-economic panel data are mobilized for 11 OECD countries over the 1981–2005 period. The analysis is based on factor demand estimates. It provides some original results: (i) the impact on ICT diffusion is positive for the level of education and negative for market rigidities, and both increased over time (in absolute terms) until mid-1990s; (ii) in each country, the price-elasticity of demand for ICT decreased (in absolute terms) over time, from 2 at the beginning of the 1980s to 1 in the middle of the 2000s.     

Modeling technological change in energy demand forecasting: A generalized approach

Conventional economic modeling of energy demand has characterized technological choice as an investment decision driven primarily by the relationship between capital costs and operating costs. Yet the implementation of this approach has tended to yield unrealistically high estimates of the implicit discount rate governing investment decisions, particularly those involving energy efficient technologies. This result arises from incomplete specification of the process of technological choice and the diffusion of innovations. General models of diffusion include conventional costs as one set of factors among many others that influence the spread of new technologies. These more general models have been widely applied to the adoption of other new or improved products, and their use in energy demand forecasting would lead to more accurate and reliable projections. Modification of the forecasts would have policy implications. In particular, the cost of a strategy to reduce greenhouse gas emissions by encouraging more rapid diffusion of energy efficient technologies is likely to be considerably smaller than would be suggested by the conventional economic models.     

A note on the diffusion of innovation

The paper deals with the process of substitution between technologies in a framework of increasing returns to scale. The approach stresses the interaction between capacity expansion and market demand as explanations of the diffusion of technologies into their niches. The demand and supply sides of the diffusion process are therefore brought together to determine simultaneously patterns of output and prices.It analyzes the dynamics of the substitution path, where a logistic diffusion process for the new technology is assumed, and determines the substitution curve between the old technology and the new one.     

CHINA'S NATIONAL INCOME: A SURVEY OF ESTIMATES

A number of official and Western estimates of China's national income for the period since 1949 are at present available. The official estimates are based on the Marxian production concept while the Western estimates are, in the main, based on the comprehensive production concept. The periods covered by the estimates vary; and even in cases where the periods covered are the same, the estimates vary in magnitude and, in most cases, in the implied rate of economic growth. Apart from differences arising from the different national income concepts and definitions employed in individual estimates, sources of discrepancies between series of estimates can be traced to the particular sets of primary data employed and also to the particular procedures followed in estimating the national income components. The present paper brings together the various estimates available to date and indicates for each, as far as possible, the basic production concept adopted, the particular national income aggregates estimated, the basic estimation approach employed, and the special procedures used for estimating some of the components of national income. Comparisons of the major series of estimates for the period 1952–1959 are made and the sources of discrepancies between the series are discussed. Finally, some problems are described which a researcher in the West has to contend with in working on China's national income accounting.     

Modelling the faddish, fashionable and efficient diffusion of agricultural technologies: A case study of the diffusion of wool testing technology in Australia

This study investigates the nature of innovation diffusion in an agricultural context. The dominant agricultural diffusion models assume that an economically rational choice is made to adopt or reject agricultural technologies. However, recent studies of agricultural innovation highlight the ‘irrational’ and potentially ‘inefficient’ nature of the diffusion in this context. To investigate how and why agricultural technologies are adopted or rejected, we examine the diffusion of wool testing technologies in the Australian wool industry using the Bass diffusion model and Abrahamson's diffusion and rejection typology. The results show that diffusion of agricultural innovation is not simply an efficient choice made to close observable performance gaps. The findings suggest that the adoption of inefficient innovations and the rejection of efficient innovations can be driven by an adopter's social context, powerful external influences and imitation within an adopter group and that these drivers change over time, suggesting an evolutionary social process underlies the diffusion of agricultural technologies.     

Forecasting with limited data: Combining ARIMA and diffusion models

Forecasting diffusion of new technologies is usually performed by the means of aggregate diffusion models, which tend to monopolize this area of research and practice, making the alternative approaches, like the Box-Jenkins, less favourable choices due to their lack of providing accurate long-term predictions. This paper presents a new methodology focusing on the improvement of the short-term prediction that combines the advantages of both approaches and that can be applied in the early stages of a diffusion process. An application of the methodology is also illustrated, providing short-term forecasts for the world broadband and mobile telecommunications' penetration. The results reveal that the methodology is capable of producing improved one-year-ahead predictions, after a certain level of penetration, as compared to the results of both methods individually. This methodology can find applications to all cases of the high-technology market, where a diffusion model is usually used for obtaining future forecasts. The paper concludes with the limitations of the methodology, the discussion on the application's results and the proposals for further research.     

A simple algebraic estimation procedure for innovation diffusion models of new product acceptance

A simple algebraic estimation procedure is developed to estimate the parameters of diffusion models of new product acceptance. The procedure required knowledge of the occurrence of the point of inflection (based on actual data, analogous products, or management judgments). It is conceptually easy to use and can be implemented by using a hand calculator. Since the procedure does not employ period-by-period time-series diffusion data, it is not expected to provide the best fit to the data as compared to the maximum likelihood and nonlinear least squares estimation procedures. However, the procedure can provide very reasonable estimates about the relative magnitudes of the parameter estimates. In that respect, the procedure can be used to generate good starting values for the maximum likelihood and nonlinear least squares estimation procedures. In the absence of data, using management judgments about the point of inflection, the procedure can be implemented in a decision-support system to develop conditional diffusion curves for a new product. Data from four diverse innovations are used to illustrate the procedure.     

Comparative international diffusion: Patterns,determinants and policies

Using data derived from a number of stand alone surveys in different countries, this paper explores international differences in the paths of diffusion of new manufacturing technologies. It is observed that diffusion paths are technology specific and that no one country either in Europe or North America can be said to exhibit faster, earlier or more extensive diffusion for all technologies than other countries. Using results in the public domain it is also argued that the main driving forces behind diffusion patterns are those generally classified as epidemic and rank effects. Building upon this, the rationale for policy intervention in the diffusion process is discussed and the effectiveness of different policy instruments considered.     

Factors Determining the Adoption of Energy-Saving Technologies in Swiss Firms: An Analysis Based on Micro Data

This study investigates the factors that determine firms’ decisions to adopt energysaving technologies. We distinguish between the decisions of whether or not to use a technology (“inter-firm diffusion”), and of how intensely to use a technology (“intra-firm diffusion”). The empirical model used accommodates several effects that have been postulated in the theoretical diffusion literature: firm and industry heterogeneity, strategic considerations and external effects. Data for 2,324 Swiss firms for the year 2008 is used, with separate information for four categories of energy-saving technology applications (electromechanical and electronic, motor vehicles and traffic engineering, construction, power-generating processes). The results reveal significant differences with respect to firm characteristics and adoption barriers between inter-firm and intrafirm diffusion. In practically all cases, positive net external effects of adoption can be found. Inducement effects, particularly those traced back to intrinsic motivations for environment-friendly technologies, show clearly positive effects on adoption behavior.     

Exploring the market for breakthrough technologies

In this article, the gap between futures research (long term) and market research (short term) is closed in two ways. Firstly, by describing methods of market exploration that can be used earlier on in the process of development and diffusion of breakthrough technologies, so market research can be applied along with futures research. Secondly, the gap is closed by actually combining futures research and market research. We start the article from the perspective of the market research discipline and describe the problems in market research that require new approaches. The validity of market research results is often low when breakthrough technologies enter the market. To investigate this problem, assumptions for valid market research results are presented. In some cases, when breakthrough technologies first enter the market, these assumptions do not hold and market research becomes problematic whereas in other cases customers' needs and preferences are not an issue at all and attention focuses on technological issues. Potential solutions to explore the market in the former cases are suggested. Four approaches are distinguished: (1) adapting existing methods; (2) combining consumer research with market structure analysis or futures research; (3) using theoretic models; and (4) probe and learn approaches. These approaches require different subsets of assumptions and are therefore applicable in different situations.     

Multinational firms, international trade and international telecommunications

The study analyses the determinants of international telephone, telex, telegram and leased lines communication between the United States and 46 countries. It focusses on the role of multinational firms, international trading firms and new information technologies within the framework of the theory of transaction costs.Results of the econometric estimates suggest that: (a) technological conditions of telecommunication infrastructure, i.e., international diffusion lags of new information technologies, play an important role in the explanation of international telephone and telex telecommunication flows but not in the demand for telegraph and leased lines, (b) multinational firms use international telecommunication to reduce the coordination costs and are strong customers of leased lines and telephones, but less so of telex and telegrams, (c) international trading firms exhibit less clear preferences in the use of the different media to reduce transaction costs.     

How Do Digital Technologies Drive Economic Growth?

This paper seeks to provide new empirical evidence that demonstrates the importance of digital technologies in promoting economic growth, drawing on the literature on advances in growth and leveraging a broader and more robust country‐level panel dataset. In particular, this paper estimates the long‐run economic impact of digital technologies using mobile phone penetration and internet usage as broad indicators. The empirical results suggest that, between 2004 and 2014, the diffusion of digital technologies significantly improved economic output in Australia and abroad, contributing to steady‐state gross domestic product per capita growth of approximately 5.8 per cent on average. These findings could serve as the starting‐point for predictions about the likely impact of future technologies, providing a better understanding for policy‐makers in prioritising initiatives that will continue to lift living standards in the coming years.     

What Drives the International Transfer of Climate Change Mitigation Technologies? Empirical Evidence from Patent Data

Technology transfer plays a key role in global efforts to reduce greenhouse gas emissions. In this paper, we characterize the factors that promote or hinder the international diffusion of climate-friendly technologies using detailed patent data from 96 countries for the period 1995–2007. The data provide strong evidence that lax Intellectual Property regimes have a strong and negative impact on the international diffusion of patented knowledge. Restrictions on international trade and foreign direct investment also hinder the diffusion of climate-friendly technologies. Surprisingly, local technological capabilities tend to discourage transfers. While broad indicators of technology capabilities are expected to facilitate transfers, this latter result stems from our technology-specific definition of local capabilities, which makes it possible to capture a substitution effect between local and foreign inventions.     

Combining stated and revealed choice research to simulate the neighbor effect: The case of hybrid-electric vehicles

According to intuition and theories of diffusion, consumer preferences develop along with technological change. However, most economic models designed for policy simulation unrealistically assume static preferences. To improve the behavioral realism of an energy–economy policy model, this study investigates the “neighbor effect,” where a new technology becomes more desirable as its adoption becomes more widespread in the market. We measure this effect as a change in aggregated willingness to pay under different levels of technology penetration. Focusing on hybrid-electric vehicles (HEVs), an online survey experiment collected stated preference (SP) data from 535 Canadian and 408 Californian vehicle owners under different hypothetical market conditions.Revealed preference (RP) data was collected from the same respondents by eliciting the year, make and model of recent vehicle purchases from regions with different degrees of HEV popularity: Canada with 0.17% new market share, and California with 3.0% new market share. We compare choice models estimated from RP data only with three joint SP–RP estimation techniques, each assigning a different weight to the influence of SP and RP data in coefficient estimates. Statistically, models allowing more RP influence outperform SP influenced models. However, results suggest that because the RP data in this study is afflicted by multicollinearity, techniques that allow more SP influence in the beta estimates while maintaining RP data for calibrating vehicle class constraints produce more realistic estimates of willingness to pay. Furthermore, SP influenced coefficient estimates also translate to more realistic behavioral parameters for CIMS, allowing more sensitivity to policy simulations.     

Policy implications of potential conflicts between short-term and long-term efficiency in CO2 emissions abatement

This paper shows that, under certain conditions (including path dependence and lock-in), policies and measures leading to a cost-effective GHG emissions mitigation in the short term may not allow reaching long-term emissions targets at the lowest possible cost, that is, they might not be cost-effective in the long term. The reason is that, in a situation where currently expensive technologies have a large potential for cost reductions through learning effects and R&D investments, the implementation of incentive-based mitigation policies such as taxes or tradable permits will encourage the adoption and diffusion of currently low-cost abatement technologies, but might not be enough to make attractive the diffusion of expensive ones, which is a necessary condition for these technologies to realise their cost-reduction potential through the aforementioned effects. A simple model and a numerical simulation are provided to show this possible conflict between static and dynamic efficiency, which points out to the need to combine different instruments, some aiming at short-term cost-efficiency (such as incentive-based environmental policy) and others at encouraging dynamic cost reductions (such as technology/innovation policy).     

Is there still a productivity paradox? two methods for a transatlantic comparison

Economic activity accelerated in the United States, in the second part of the cycle, after 1995, within an environment of decreasing inflation. France has followed a qualitatively similar path since 1997, also clearly suggesting the effects of a positive supply shock. The spread of new information and communication technologies (NICT) partly explains these singular events. On one hand, a calculation of contributions to output growth suggests that they would explain about half of the increase in activity in the United States and one-fifth in France. On the other hand, a trend/cycle decomposition reveals that the structural acceleration in output and productivity gains in the United States are very much restricted to industries producing NICT and there is a rather small break in productivity gains. In France, where differences between sectors are not so clear-cut, the diffusion of NICT has been accompanied by a slowdown in trends in productivity gains. In both cases, there is little room left for the effects of the diffusion of technical progress associated with NICT.