The innovator's media dilemma: How journalists cover incumbents' adoption of discontinuous technologies

We offer a new vantage to the literature on the role of infomediaries in incumbent firms' struggles to adopt discontinuous technologies: the perspective of news media. Specifically, we combine the discontinuous technology literature with studies on news media journalism to theorize that journalists cover an incumbent's new product introductions differently, depending on whether a given new product builds on a discontinuous technology or on the respective established, continuous technology. First, discontinuous-technology-based product introductions receive a greater volume of coverage than continuous-technology-based product introductions because journalists prefer covering issues that are novel, deviate from the conventional, and potentially strongly impact society. Second, the coverage of discontinuous-technology-based product introductions is more divergent in tenor than the coverage of continuous-technology-based product introductions, as journalists seek to present opposing and thus more engaging opinions. Our analyses of unique archival data from two samples of product introductions in the automotive and photography industries, respectively, support our hypotheses. We also find intriguing indications that news media coverage of new products introductions using hybrid technologies is significantly context-dependent. Overall, our study points to so-far undescribed, media-related dilemmas for incumbent firms that aim to adopt discontinuous technologies.     

Why do incumbents sometimes succeed? Investigating the role of interorganizational trust on the adoption of disruptive technology

Previous research has noted that new firms traditionally have more success with the diffusion of disruptive technologies than do incumbent firms. For the development of disruptive technologies, newer firms appear to be advantageous as they are generally more flexible in resource allocation. However, exceptions can be found in various industries in which incumbents have been able to succeed with their own disruptive technologies. One possible explanation for these exceptions is the influence of pre-existing levels of trust already developed between incumbents and potential buyers of disruptive technologies. In order to explore this further, this article provides a link between interorganizational trust and the adoption of new, disruptive technologies in industrial markets. By surveying 134 current and potential Software-as-a-Service (SaaS) users, we show how pre-existing, interorganizational trust impacts the perceptions a potential buyer has towards a disruptive technology and how these perceptions influence a buyers' intention to adopt a new, disruptive technology. Beyond trust, we use perceived ease of use, perceived value, perceived usefulness and financial stability to create a predictive model for intention to adopt. Holistically, this article provides insight on how buyer–supplier relationships generally favor incumbent firms and can impact a buyers' perception of a new, disruptive technology.     

Technology adoption and value chains in developing countries: Evidence from dairy in India

Adoption of modern technologies in agriculture is crucial for improving productivity and welfare of poor farmers in developing countries. Not much is known about how value chains do (not) affect technology transfer and/or adoption in food chains in developing countries. We analyze farm-level technology adoption in the dairy chain in India, using unique survey data. The dairy chain in India is an important case because the Indian government has promoted development of the dairy sector for its potential for ‘pro-poor’ growth, and because value chain initiatives had strong effects on dairy farm technology in other countries with imperfect markets and growth in demand. We find that despite rapid growth in milk consumption and production, technology adoption in the form of better hygienic practices, better feed and improved livestock was mixed, and low for certain regions and technologies. So far, the role of value chains in the adoption of new technologies seems to be minor.     

OPEN ARCHITECTURE AND R&D INCENTIVES

In open systems, firms give up their property rights to technologies and permit other companies to use these technologies. We ask how an incumbent's architecture choice affects social welfare by altering R&D competition among firms. More specifically, we ask whether an incumbent, by adopting an open system, can establish its socially inefficient technology as the market standard, while an entrant is developing a more efficient technology. It is shown that an incumbent has an incentive to preempt an entrant's competing technology by choosing an open system, but that the open system might result in a premature market standard.     

Impact of modern agricultural technologies on smallholder welfare: Evidence from Tanzania and Ethiopia

This paper evaluates the potential impact of adoption of improved legume technologies on rural household welfare measured by consumption expenditure in rural Ethiopia and Tanzania. The study utilizes cross-sectional farm household level data collected in 2008 from a randomly selected sample of 1313 households (700 in Ethiopia and 613 in Tanzania). The causal impact of technology adoption is estimated by utilizing endogenous switching regression. This helps us estimate the true welfare effect of technology adoption by controlling for the role of selection problem on production and adoption decisions. Our analysis reveals that adoption of improved agricultural technologies has a significant positive impact consumption expenditure (in per adult equivalent terms) in rural Ethiopia and Tanzania. This confirms the potential role of technology adoption in improving rural household welfare as higher consumption expenditure from improved technologies translate into lower poverty, higher food security and greater ability to withstand risk. An analysis of the determinants of adoption highlighted inadequate local supply of seed, access to information and perception about the new cultivars as key constraints for technology adoption.     

Access regulation and geographic deployment of a new generation infrastructure

This paper addresses the impact of regulatory policy on levels of infrastructure deployment and derived welfare in the telecommunications sector. The model considers two potentially coexisting and partially competing technologies (the “old generation network” – OGN – and the “new” generation network – NGN). This framework allows us to show that the “regulation defining access charge in order to maximize infrastructure deployment” is strictly equivalent to the case in which “no regulation applies”. We also derive from the model that these two types of regulation induce higher social welfare, but lower numbers of NGN consumers, compared to the “ex post access prices” regulation. Finally, we show that the level of infrastructure deployment (as well as social welfare and number of NGN consumers) will be highest if both investment and access charge decisions are taken by the welfare maximizing regulator. This suggests that the social optimum will be achieved through a calls-for-tender process that includes deployment and access charge requirements.     

Government Policies Supporting Open Source Software for the Mass Market

This paper analyzes the impact on social welfare of government policies supporting open source software (OSS). Mass-market consumers can be divided between those who are informed about the existence of OSS and those who are uninformed. Since OSS producers have little incentive to advertise, there may be a substantial mass of uniformed consumers, leading to market failures that may justify government intervention. We study three government policies: (a) mandated adoption, whereby the government forces public agencies, schools, and universities to adopt OSS, (b) information provision, whereby the government informs the uninformed users about the existence and the characteristics of OSS, and (c) subsidy, whereby the government makes a payment to consumers if they adopt OSS. We show that mandated adoption and information provision may increase social welfare, but the subsidy always reduces it. When network externalities are added to the model, we show that mandated adoption and information provision may increase social welfare if they help the market to tip towards standardization. The web site www.opensource.org provides further details on the open source software movement     

Revisiting Wireless Internet Connectivity: 5G vs Wi-Fi 6

In recent years, significant attention has been directed toward the fifth generation of wireless broadband connectivity known as ‘5G’, currently being deployed by Mobile Network Operators. Surprisingly, there has been considerably less attention paid to ‘Wi-Fi 6’, the new IEEE 802.1ax standard in the family of Wireless Local Area Network technologies with features targeting private, edge-networks. This paper revisits the suitability of cellular and Wi-Fi in delivering high-speed wireless Internet connectivity. Both technologies aspire to deliver significantly enhanced performance, enabling each to deliver much faster wireless broadband connectivity, and provide further support for the Internet of Things and Machine-to-Machine communications, positioning the two technologies as technical substitutes in many usage scenarios. We conclude that both are likely to play important roles in the future, and simultaneously serve as competitors and complements. We anticipate that 5G will remain the preferred technology for wide-area coverage, while Wi-Fi 6 will remain the preferred technology for indoor use, thanks to its much lower deployment costs. However, the traditional boundaries that differentiated earlier generations of cellular and Wi-Fi are blurring. Proponents of one technology may argue for the benefits of their chosen technology displacing the other, requesting regulatory policies that would serve to tilt the marketplace in their favour. We believe such efforts need to be resisted, and that both technologies have important roles to play in the marketplace, based on the needs of heterogeneous use cases. Both technologies should contribute to achieving the goal of providing affordable, reliable, and ubiquitously available high-capacity wireless broadband connectivity.     

When should workers embrace or resist new technology?

The question of how workers might respond to new technologies has lurked behind many debates on the subject. It has not been posed directly, in part because of concerns about the determinism of asking about the effects of a technology. A preliminary is to set aside these concerns by showing that effects can be identified without determinism. The main argument is that technologies can be assessed on six dimensions: intended or unintended effects; direct and indirect effects; degree of reconstitution in use; immanence; degree of success and degree of discontinuity with the past. These dimensions can then be used to pose questions about any one technology. Three illustrations suggest how such questions can be posed in concrete conditions. Technologies can be challenged so that alternatives to extant systems of work organisation can be considered.     

Sales force technology usage—reasons, barriers, and support: An exploratory investigation

Increasingly, salespeople are being asked to adopt and use a variety of technologies to increase their selling productivity and efficiency, including sales force automation and customer relationship management technologies. However, little research has investigated what happens once sales force automation (SFA) technology is adopted. This paper explores the reasons why salespeople use SFA technologies, the perceived barriers to SFA usage and how management can increase the usage of SFA technology. First, a qualitative study was performed to gain insight about salespeople's automation technology usage and the reasons why some salespeople fully use or do not utilize technology. After the initial study, 130 salespeople were surveyed. More productivity/efficiency was the main reason why salespeople use technology, the lack of management and technical support proved to be the main barrier to usage, and training proved most effective in increasing usage of SFA technology. Sales managers are provided with implications of the findings.     

Personalized pricing and advertising: Who are the winners?

This paper investigates who wins and who loses when firms depart from a mass advertising/uniform pricing strategy (benchmark model) to a targeted advertising/price discrimination one. Considering a duopoly market in which firms simultaneously compete in prices and advertising decisions, we examine the competitive and welfare effects of personalized pricing with targeted advertising by comparing equilibrium outcomes under customized advertising/ pricing decisions to the results arising under mass advertising and uniform pricing. We show that, when both firms compete in both market segments, all segment consumers are expected to pay higher average prices under the personalized advertising/pricing strategy. We also show that, in the context of our simultaneous game, targeted advertising with price discrimination might boost firms’ profits in comparison to the case of mass advertising and uniform prices. The overall welfare effects of the personalized strategy are ambiguous. However, even when the personalized strategy boosts overall welfare, consumers might all be worse-off. Thus the paper gives support to concerns that have been raised regarding the firms’ ability to adopt personalized strategies to boost profits at the expense of consumers.     

EFFECTS OF TECHNOLOGY ADOPTION ON PRODUCTIVITY AND INDUSTRY GROWTH: A STUDY OF STEEL REFINING FURNACES*

This paper examines the impact of new technology on plant‐level productivity in the Japanese steel industry during the 1950's and 1960's. We estimate the production function, considering the differences in technology between the refining furnaces owned by a plant. We find that a more productive plant was likely to adopt the new technology and that the adoption would be expected to occur immediately following the peak of the productivity level achieved with the old technology. The adoption of the new technology primarily accounted not only for the industry's productivity slowdown but also for the industry's remarkable growth.     

A mixed spectrum management framework for the future wireless service based on techno-economic analysis: The Korean spectrum policy study

The evolution of radio technology and various services has increased the world's dependence on wireless communications. The demand for and value of spectrum resources therefore are also increasing. Spectrum efficiency is the most important factor in managing spectrum scarcity. However, under the current spectrum management approach, it is difficult to adopt innovative technologies that improve spectrum efficiency and flexible usage in the current dynamic wireless market. Recently, there have been several approaches to improve efficient use of spectrum resources, and each approach has its own advantages and disadvantages. Therefore, this research first discusses current issues and analyzes relative social welfare based on the different characteristics of technology and market conditions to compare various attributes of each approach. Based on the techno-economic simulation results, this paper introduces a mixed spectrum management framework for the future wireless service and support policy makers’ decision making. Furthermore, the mixed spectrum policy to spectrum management in Korea is proposed to find a more realistic and efficient spectrum management policy.     

Harnessing artificial intelligence (AI) to increase wellbeing for all: The case for a new technology diplomacy

The field of artificial intelligence (AI) is experiencing a period of intense progress due to the consolidation of several key technological enablers. AI is already deployed widely and has a high impact on work and daily life activities. The continuation of this process will likely contribute to deep economic and social changes. To realise the tremendous benefits of AI while mitigating undesirable effects will require enlightened responses by many stakeholders. Varying national institutional, economic, political, and cultural conditions will influence how AI will affect convenience, efficiency, personalisation, privacy protection, and surveillance of citizens. Many expect that the winners of the AI development race will dominate the coming decades economically and geopolitically, potentially exacerbating tensions between countries. Moreover, nations are under pressure to protect their citizens and their interests—and even their own political stability—in the face of possible malicious or biased uses of AI. On the one hand, these different stressors and emphases in AI development and deployment among nations risk a fragmentation between world regions that threatens technology evolution and collaboration. On the other hand, some level of differentiation will likely enrich the global AI ecosystem in ways that stimulate innovation and introduce competitive checks and balances through the decentralisation of AI development. International cooperation, typically orchestrated by intergovernmental and non-governmental organisations, private sector initiatives, and by academic researchers, has improved common welfare and avoided undesirable outcomes in other technology areas. Because AI will most likely have more fundamental effects on our lives than other recent technologies, stronger forms of cooperation that address broader policy and governance challenges in addition to regulatory and technological issues may be needed. At a time of great challenges among nations, international policy coordination remains a necessary instrument to tackle the ethical, cultural, economic, and political repercussions of AI. We propose to advance the emerging concept of technology diplomacy to facilitate the global alignment of AI policy and governance and create a vibrant AI innovation system. We argue that the prevention of malicious uses of AI and the enhancement of human welfare create strong common interests across jurisdictions that require sustained efforts to develop better, mutually beneficial approaches. We hope that new technology diplomacy will facilitate the dialogues necessary to help all interested parties develop a shared understanding and coordinate efforts to utilise AI for the benefit of humanity, a task whose difficulty should not be underestimated.     

Do converters facilitate the transition to a new incompatible technology? A dynamic analysis of converters

This paper analyzes the process of transition in standards between incompatible technologies when converters are available. Contrary to a common presumption that converters facilitate the transition from an old technology to an otherwise incompatible new technology, I find circumstances in which the possibility of transition is blockaded by the existence of converters. In the welfare analysis of converters, a distinction is made between ex ante and ex post efficiency effects. Finally, I also analyze the equilibrium behavior in the provision of converters and compare it to the socially optimal outcome.     

Ratcheting Up: Linked Technology Adoption in Supply Chains

It is generally assumed that a firm will adopt complementary technologies simultaneously. Apparel industry data indicate that, because of the close links between suppliers and retailers, there was a ratchet-up adoption of complementary information technologies. The consequence was that a rapid regime shift occurred without explicit coordination or planning. One implication is that the study of technology adoption may need to be more widely conceptualized to incorporate the relationships between upstream manufacturers and downstream retailers.     

The adoption of radical manufacturing technologies and firm survival

The emergence of dramatically innovative, or radical, new manufacturing technologies can force pivotal and life‐threatening decisions for industry competitors. These technologies can represent a huge cost for adopting firms, but may also offer the chance to achieve competitive advantage through superior manufacturing. While prior research has considered a range of production process decisions (e.g., JIT, mass customization) and outcomes for end‐product technologies, little attention has been given to adoption decisions relative to core manufacturing technologies. This study examines an industry's adoption of major manufacturing technologies over several decades and demonstrates that two groups of contingencies related to adoption (e.g., timing and cumulative effects) have a significant impact on firm performance. Based on a sample of over 1,000 firms, the results provide insights into the effects of adoption timing and ‘manufacturing technology bundles’ on firm survival. We also find that adoption of manufacturing technologies prior to the inflection point of the estimated Bass diffusion curve for each technology leads to significant reduction in firm mortality. Thus, we are able to demonstrate the ability of the Bass model to predict the survival outcomes of firms facing manufacturing technology adoption decisions. The strategic implications of these pivotal decisions are considered. Copyright © 2008 John Wiley & Sons, Ltd.     

Motivating regulated suppliers to assess alternative technologies,protocols, and capital structures

Regulated firms can be tempted to adopt cost-saving technologies, operating procedures, or capital structures without fully assessing the associated risks. We demonstrate how a regulator can costlessly preclude such behavior if she can impose substantial penalties on the firm in the event of poor realized performance. When these penalties are more limited, the regulated firm secures rent from its privileged ability to assess the riskiness of potential technologies. If these penalties are sufficiently limited, the regulator optimally affords the firm no choice among technologies. Consequently, the regulated firm prefers moderate penalties to very limited penalties.     

Book Reviews

The importance of the automotive industry in the global economy is widely recognised. The sector has undergone enormous changes in order to prepare for the fierce competition of the 21st century. Among these transformations, the most relevant are those technologies developed for the rapid evolution of activities linked to new designs, new products, and new manufacturing processes and systems. Innovative Japanese carmakers have stimulated international performance comparisons in these activities.
International technology alliances may be one way of gaining access to new competitive technologies. Risks and costs associated with new product development can be shared among the partners and more effective use can be made of manufacturing facilities and production capabilities. Sometimes, an alliance agreement may lead to the deployment of new capabilities. However, in spite of this potential, the literature presents the success rate of alliances at less than 50%.
Our study considers two examples of companies that developed international joint ventures (IJVs): Rover with Honda, and Seat with Volkswagen. Since these two European peripheral companies, Rover and Seat, no longer remain as independent firms, we are interested in identifying the reasons leading to the success or failure of these IJVs as regards the New Product Development (NPD) process. In particular, in both cases the paper looks at the problems of the weaker partner becoming increasingly dependent on the other partner and the need for a well-defined strategy to benefit from IJVs.     

Strategic alliances,organisational learning and new product development: the cases of Rover and Seat

The importance of the automotive industry in the global economy is widely recognised. The sector has undergone enormous changes in order to prepare for the fierce competition of the 21st century. Among these transformations, the most relevant are those technologies developed for the rapid evolution of activities linked to new designs, new products, and new manufacturing processes and systems. Innovative Japanese carmakers have stimulated international performance comparisons in these activities. International technology alliances may be one way of gaining access to new competitive technologies. Risks and costs associated with new product development can be shared among the partners and more effective use can be made of manufacturing facilities and production capabilities. Sometimes, an alliance agreement may lead to the deployment of new capabilities. However, in spite of this potential, the literature presents the success rate of alliances at less than 50%. Our study considers two examples of companies that developed international joint ventures (IJVs): Rover with Honda, and Seat with Volkswagen. Since these two European peripheral companies, Rover and Seat, no longer remain as independent firms, we are interested in identifying the reasons leading to the success or failure of these IJVs as regards the New Product Development (NPD) process. In particular, in both cases the paper looks at the problems of the weaker partner becoming increasingly dependent on the other partner and the need for a well-defined strategy to benefit from IJVs.