Diffusion of organisational innovations: an empirical test of an analytical framework

Alänge, Jacobsson, and Jarnehammar (1998) presented an analytical framework for studying the diffusion of organisational innovations, based on the developments in literature on technical innovations and their diffusion. The aim of this paper is to examine the validity of the framework. Two exploratory case studies were carried out on the diffusion of the organisational innovation TQM. The case studies showed that the framework is a useful tool for studying the diffusion of organisational innovations. However, factors such as learning processes on a national and international level and the role of fads need further consideration. In addition, factors needed for a long-term commitment such as boards and owners and internal political and cultural systems need to be further investigated. The paper also presents a model for analysing the different phases in a diffusion process.     

Diffusion of innovations in globally stable Walrasian equilibrium

When all products in the economy are weak gross substitutes, preferences are homothetic, and firms face menu costs then all prices in an industry move together at the same rate. In the closed-loop Nash noncooperative equilibrium, all firms invest in productivity and reduce real prices. As a result, in the case of quadratic menu costs, the outputs of industries and the economy go up along S-shaped time paths characteristic of diffusion of innovations.     

A competitive model of economic geography

Summary. Most of the literature argues that competitive analysis has nothing interesting to say about location. This paper argues, to the contrary, that a competitive model can have something interesting to say about location, provided that locations are not identical and transportation costs are not zero. To do this, it constructs a competitive intertemporal general equilibrium model and applies it to a suggestive example of migration.Received: 25 August 2003, Revised: 18 December 2003, JEL Classification Numbers: D5, R0.Our interest in this topic has been stimulated over the years by many conversations with Marcus Berliant. We thank an anonymous referee for exceptionally careful and useful comments. Financial support from the UCLA Academic Committee on Research (Ellickson, Zame) and the National Science Foundation (Zame) is gratefully acknowledged. Views expressed here are those of the authors and do not necessary reflect the views of any funding agency.     

A note on the competitive search model of Azariadis and Pissarides

In this short note, I reinvestigate a recent paper of Azariadis and Pissarides (Unemployment dynamics with international capital mobility, European Economic Review, 2007(51), 27–48) where wages are determined in a competitive search setting. I show that their equation on the equilibrium wage rate is incorrect. I derive a correct wage equation and perform the numerical analysis. The correction does not change their result and high capital mobility still raises the variability of the unemployment rate.     

A consumer-based model of competitive diffusion: the multiplicative effects of global and local network externalities

Competitive diffusion of two incompatible technologies, such as PC vs. Macintosh, VHS vs. Betamax and so on, is studied under the framework of a spatial game in which consumers are distributed on a two-dimensional square lattice network. The consumers play coordination-like games with their nearest neighbors and imitate the most successful strategy in their neighborhood in terms of aggregated payoffs after each round. The effects of global network externality are realized in the dynamic payoff matrix of the game, and the framework of spatial game provides the model with the effects of local network externality. These two types of externalities are set as multiplicative, that is, as nonlinear. Both simulations and mean-field approximation show that not only total but also partial standardization (robust polymorphic equilibrium) occurs depending upon the parameters and initial configurations, even when there are positive effects of both global and local network externalities. Moreover, effects of innovation factors that alter paths toward a lock-in situation are studied. It is shown that both the timing and the size of the innovation factors matter for a disadvantaged technology in order to overwhelm a market.JEL Classification: C7, D8, O3We are obliged to Professor John Paul Boyd at the University of California, Irvine and our anonymous referees for their constructive comments.     

替代产品投放策略与竞争性反应研究

本文首先介绍了产品替代理论，然后回顾了新产品投放及竞争者的反应方面的相关理论研究，在投放策略与反应之间引入信号的概念：根据已有文献研究总结得出企业感知信号的不同类型与其做出竞争性反应的关系。     

Possible suboptimal diffusions of technological innovations in clustered scale-free networks

Many inter-firm networks take a skewed power-law- or scale-free distribution in which one or a few central actors are connected to numerous peripheral actors. Research argues that central actors can act as early adopters and catalysts for the adoption of technological innovations, but studies are inconclusive regarding central actors’ de facto role in this matter. Peripheral actors in scale-free networks tend to cluster, which implies that they are structurally embedded and mutually dependent. A major thesis in this paper is that clustered peripheral actors in scale-free networks may restrict central actors’ propensity to adopt innovations, and as a result impede their diffusion. The paper discusses which implications this may have for stakeholders in the private and public sector domain and practitioners of strategic management.     

Exploratory analysis of the impact of information dynamics on innovation diffusion

Understanding the dynamic nature of innovation diffusion processes, and mechanisms underlying these dynamics is crucial, since such an understanding is potentially very important in designing effective innovation support policies and developing better diffusion forecasts. The role of information diffusion in conditioning the diffusion dynamics of an innovation is the locus of this study. In order to investigate this, a simulation model that distinguishes between the real attributes of the innovation and their perceived levels by the user groups has been developed. The model makes it possible to separately trace the diffusion dynamics of innovation and the information about an innovation. Additionally, the formulation of the model enables the message broadcasted via word-of-mouth to change in nature from positive to negative, or vice versa. This generic model is used in an exploratory way, which is discussed as a novel approach for conducting a simulation-based analysis. Such an exploration covers a wide range of plausible diffusion behaviors, and aims to demonstrate the extent to which information imperfections and dynamics may influence the diffusion process. During experiments it is observed that information imperfections as well as the pace of learning processes may yield significant changes in the diffusion patterns. These changes may be in the form of altering the basic characteristics of the well-known S-shaped diffusion curve, as well as stopping the diffusion at much lower levels than full adoption. The analysis presented in the article shows that exploratory analysis is a promising way to utilize simulation models for developing general insights about dynamics processes.     

A model of the linked adoption of complementary technologies

This paper presents a dynamic feedback model of the technology diffusion process in which each firm's technology adoption decisions maximize the net present value of its anticipated cash flow, taking into account the direct cost savings, the number of linked firms expected to adopt complementary technologies, and anticipated changes in adoption costs. The adoption of complementary technologies need not be simultaneous, but linked technologies can induce a rapid industrial regime shift without explicit coordination or planning.     

The discrete time version of the Romer model

Summary. This paper presents a discrete time version of the Romer 1986 model of endogenous growth. The purpose of this work is to propose detailed and simple proofs of existence of optimal solutions and of a competitive equilibrium. The framework implemented here reduces the complexity of the proofs given by Romer (1983) in his Ph.D dissertation in a continuous time framework. Received: March 7, 2000; revised version: April 25, 2001     

The patterns of induced diffusion: Evidence from the international diffusion of wind energy

Recent years have seen growing academic interest in the concept of induced diffusion as efforts to address concerns about energy security and climate change have intensified. Research on induced diffusion explores whether policy tools or interventions can incentivise the diffusion of innovations. This body of literature has explored the effectiveness and efficiency of various policy interventions and as such has been mainly concerned with the determinants of diffusion. This paper is, by way of contrast, concerned with the patterns of diffusion when diffusion is induced. Drawing on the Bass and Davies models of innovation diffusion we develop a number of propositions that suggest that the patterns of diffusion are different when policy plays a role in the diffusion process. These propositions are then econometrically tested in the context of the international diffusion of wind energy in 25 OECD countries. We find that, as predicted, without effective and strong policy interventions, countries will have conventional logistic diffusion with very similar speeds of diffusion. However, as expected the patterns of diffusion take on a different functional form (Bass curve) when there is a strong policy inducement. We conclude by discussing the implications and limitations of these results and suggesting avenues for further research.     

Technological innovation and diffusion of wind power in Japan

The purpose of this paper is to analyze the diffusion of wind power in Japan by focusing on the value chain and the interaction between technology and markets and to contribute towards recommendations on technology policy and management. This paper proposes a framework for analyzing the early stage diffusion of wind power systems by combining the use of several approaches considering wind power system as a complex technological system. Firstly, the business system approach is used as an analytical framework by focusing on efficiency, effectiveness and development criteria. As a second approach, the technological trajectory was analyzed based on the concept of technological disequilibrium and the evolutionary patterns of innovation of wind power generation systems were analyzed and the relationship between innovations at the sub-system, modular, and system level was identified. We apply the framework to investigate why wind power diffusion has not picked up momentum in Japan.The results include the following: (1) Technological imbalances within the product system were solved by technological innovation (2) The wind power business in Japan is insufficiently effective due to organizational disequilibrium (3) The technology system has begun to evolve in the direction of micro grid systems. (4) It is important to consider the demand-pull measures for wind power generation so that Japanese institution can have a “time slot” for ”learning by doing” to catch up and accelerate diffusion of wind power generation, including institutional reform of RPS law. Also further technological development related to stabilizing unstable wind energy is required.     

A theory of competitive industry dynamics with innovation and imitation

Empirical evidence on industry life-cycle reveals a pattern in which innovation rates remain fairly stable or are perhaps even higher at early stages, while patenting increases sharply as the industry matures. This increase in patenting in later stages is accompanied by net exit and lower rates of output growth and price decline. In this paper, we develop a dynamic model of a competitive industry with innovation and imitation that is consistent with these stylized facts. We derive an equilibrium growth path, along which leading firms invest in increasing the stock of technological knowledge and choose not to prevent imitation by other firms as long as the industry remains relatively small. As the industry expands including new entry, the leaders' optimal amount of investment gradually declines. We show that under some rather general conditions, there would exist a scale of the industry where innovating firms would choose to start preventing free imitation, bringing further expansion of the industry through new entry to a halt and causing net exit.     

Analysis of the Lotka-Volterra competition equations as a technological substitution model

This paper provides insight into the dynamics of the Lotka-Volterra competition (LVC) equations, a much used competition model, and compares the dynamics of LVC competitive substitution to that of several well-known substitution models. The behavior of the LVC equations is analyzed for the special case of a dominant competitor at equilibrium being replaced after the introduction of a small population of an invading competitor with a competitive advantage. Expressions are derived that describe the growth of the invading competitor and that growth is shown to be of four classes: left asymmetric, logistic, right asymmetric with 1−ε₂ asymptote and right asymmetric with γ asymptote. It is shown that the LVC model reverts to logistic substitution in a market of fixed size, a result with important implications. The LVC equations are fitted to the Gompertz, Bass, Non-Symmetrical Responding Logistic (NSRL) and Sharif-Kabir substitution models and compared using a novel graphical technique. The LVC equations can reasonably mimic the full range of curve shapes exhibited by each of these models.     

A technology replacement model with variable market potential — An empirical study of CRT and LCD TV

The rapidly changing economic environment and increasingly fierce competition indicate that companies must innovate in both their products and marketing strategies if they are to continue to flourish. Specifically, the ability to accurately predict the demand for products is crucial when firms decide to allocate their resources, especially in the fast moving high technology industries, where there is very high investment in R&D and production facilities. This study establishes a forecast model for technology replacement based on the diffusion model with population growth used for the variable market potential. The proposed model is then applied to investigate the CRT and LCD TV market.The results suggest that the new model is more accurate than the constant market potential model in fitting and forecasting performance. Consumers who purchase a TV for the first time are likely more attracted to LCD TV rather than CRT TV. As for those individuals who already own a CRT TV, the attraction is not strong enough to encourage them to replace their current CRT TV with a new LCD TV. Moreover, it is noted that the falling price of LCD TV is an essential factor in encouraging purchases.     

A dynamic diffusion model for managing customer's expectation and satisfaction

The paper aims at answering the generic question on how suppliers make the suitable and well-timed decisions in diffusing new technology effectively to adopters. Three major attempts are made for the study: First, investigating the entire process of the adoption and diffusion of technology innovation with reasonably well-accepted models in each areas. Second, proposing an integrated model by concatenating in structured manner the three prominent models for the management of technology innovation such as diffusion model, adoption model, and customer satisfaction model. Third, exploring the dynamic mechanism underlying outward behaviors of the integrated model proposed in the study which depicts the causal relationships that influence technology adoption and diffusion behaviors. An exploration of the dynamic mechanism underlying outward behaviors of the integrated model is presented in the study by introducing the system dynamics simulation technique. These attempts made for the study and the results perhaps allow both researchers and practitioners to gain insight into the causal factors influencing customers' adoption decision making processes and thereby into the potential diffusion patterns resulting from those adoption processes.     

Analysing diffusion pattern of mobile application services in Korea using the competitive Bass model and Herfindahl index

Mobile service has been totally revolutionizing the service industry with the explosive growth in mobile application (‘app’) services. With the rapid proliferation of mobile app service, there is still a constant need for the research focusing on the precise and scientific prediction of the diffusion of mobile app service with consideration of competitive relationships. However, most of the relevant research dealing with diffusion did not consider the competition effect among mobile app services. In addition, in mobile app services, big competitors, which have a larger marketing share in same category, can interrupt the diffusion of other mobile app services significantly. Thus, the level of competitiveness also should be considered for more precise prediction of mobile app service. Accordingly, the present study proposes a new approach to analyse the degree of competitiveness of mobile app service categories using Herfindahl–Hirschman index and classify mobile app service categories. Then, this study systematically analyses their respective diffusion patterns based on the given empirical data using competitive Bass model. A case of Korean mobile service industry is presented to illustrate the proposed approach.     

技术扩散模型中的发展中国家最优专利保护

本文在Barro and Sala-I-Martin(1997)的技术扩散模型基础上,构建了一个Ramsey问题模型讨论发展中国家内生的动态最优专利保护问题。本文给出了Ramsey问题的均衡解并讨论了其动态特征,克服了现有文献只用比较静态方式分析讨论外生最优专利保护政策的缺陷。本文的主要结论是,发展中国家在发展早期阶段,理应设定相对较低的专利保护程度,然后随着经济成长不断地提高专利保护水平,但其长期的稳态专利保护水平有可能比发达国家高,也可能比发达国家低。     

Modelling a dynamic market potential: A class of automata networks for diffusion of innovations

Innovation diffusion processes are generally described at aggregate level with models like the Bass Model (BM) and the Generalized Bass Model (GBM). However, the recognized importance of communication channels between agents has recently suggested the use of agent-based models, like Cellular Automata. We argue that an adoption or purchase process is nested in a communication network that evolves dynamically and indirectly generates a latent non-constant market potential affecting the adoption phase.Using Cellular Automata we propose a two-stage model of an innovation diffusion process. First we describe a communication network, an Automata Network, necessary for the “awareness” of an innovation. Then, we model a nested process depicting the proper purchase dynamics. Through a mean field approximation we propose a continuous representation of the discrete time equations derived by our nested two-stage model. This constitutes a special non-autonomous Riccati equation, not yet described in well-known international catalogues. The main results refer to the closed form solution that includes a general dynamic market potential and to the corresponding statistical analysis for identification and inference. We discuss an application to the diffusion of a new pharmaceutical drug.