Investigation of factors affecting the diffusion of mobile telephone services: An empirical analysis for Vietnam

This paper analyzes the diffusion of mobile telecommunications services in Vietnam and examines how telecommunications regulation and potential substitute/complement services affect the growth of the number of mobile telephone subscribers. Using a logistic diffusion model, it is found that fixed telephone services are a complement while data services have a negative relation to mobile telephone services in Vietnam. As for regulation, the policy of introducing competition has been found to be the most effective in influencing the adoption of mobile services. Another important result is that the estimated potential market is roughly 76% of the total population. The findings suggest that suitable regulation that guarantees competition in the mobile telecommunications market in a developing country such as Vietnam is one of the most important factors for a positive diffusion process.     

Social services and telecommunications: Innovation in human services delivery

This article presents an analysis of the current state of adoption of telecommunications technologies by organizations and individuals who work in human services. It examines the barriers to use of innovations and suggests the future course of acceptance for the different technologies. Radio and telephone appear to have the fewest barriers to adoption, and it is likely that as consumers become more accustomed to advanced technologies in their homes, they will be more likely to accept them in the workplace.     

Evaluation of mobile services and substantial adoption factors with Analytic Hierarchy Process (AHP)

Emergence of new technological innovations in networks, platforms, and applications has enabled service providers to gain back their massive investment in their infrastructures. However, due to lagging adoption, many service innovations have failed to generate profit. The adoption of different mobile service categories depends on several factors. The current explorative study aims to use Analytic Hierarchy Process (AHP) to identify the most relevant mobile services for consumers and the factors driving the adoption. The results of the AHP analyses indicate that functionality of services is of utmost important for the majority of respondents. The results reveal that basic mobile communication services are the most preferred ones, although several services within different categories are available. The results have important implications for mobile network operators, service and application providers on how to develop and implement specific mobile services. The current study also offers new insights for researchers by showing that AHP is applicable to analyze consumers' preferences.     

The Role of Early Adopters in the Diffusion of New Products: Differences between Platform and Nonplatform Innovations

This paper takes a contingency view to investigate how the role of early adopters (EAs) in the diffusion process changes between platform and nonplatform innovations, what launch decisions firms take to leverage the role of EAs, and how these decisions change between platform and nonplatform innovations. Relying on an exploratory multiple case study of eight industrial product innovations launched in Italy in the 2000s, the paper suggests that the EAs of these innovations play two distinct roles in the diffusion process. The first role, called dissemination, sees EAs triggering and bolstering the propagation of information regarding their opinion about the value for money, properties, advantages, and disadvantages of the new product after they have bought and applied it in their operations. The second role, labeled imitation, consists of EAs inadvertently communicating to later buyers the fact that they have bought the new product, which propels imitative behavior and thus subsequent adoption. A key finding of the paper, which supports a contingency view of innovation diffusion, is that the dissemination role played by EAs has an impact on the adoption of platform innovations, whereas the imitation one is the mechanism through which EAs stimulate subsequent adoption in the case of nonplatform new products. Furthermore, the paper's results point to a constructive view of the process of launching an innovation, whereby firms target at launch different segments of EAs, whose identity is shaped depending on the platform versus nonplatform nature of the innovation and thus on the role they are expected to play in the diffusion process. Concerning managerial implications, this study provides a first tentative understanding of the launch decisions that product and marketing managers may use to target the most appropriate segments of EAs, to leverage their roles and ultimately to favor diffusion. As regards platform innovations, targeting decisions should be driven by the goal to improve the chances that EAs will be willing to disseminate their experience and opinion regarding the new product. As regards instead nonplatform innovations, firms should target EAs whose specific characteristics increase the likelihood of an imitative reaction by later buyers that fear to suffer a competitive disadvantage if they do not conform to EAs' behavior.     

The dynamics of factors affecting the adoption of innovations

An abundance of IT innovations are constantly struggling for market acceptance. Various models have been proposed in the literature in order to aid understanding of the principles behind the adoption of IT innovations, but most of them implicitly assume that the factors explaining adoption decisions do not change over time. This study challenges that assumption and adds to the existing literature by investigating the dynamics of the factors influencing adoption. Our general proposition is that the driving factors in adopting innovations will change as the diffusion of the innovation in the market progresses. A large-scale empirical study was carried out among medium-sized companies in a variety of European countries and industries concerning the adoption of enterprise resource planning (ERP) software. The findings strongly indicate that the factors affecting late adoption of ERP differ significantly from the factors explaining early adoption. At early stages of the diffusion process adoption tends to be especially driven by a combination of internal strategic drives and attitudes of the firm together with external forces like industry competition and supplier activities. Later on, the mix of adoption stimulating factors seems to be focusing more on implementation issues such as the scalability of the system, the number of seats and the yearly available budget. The study leads to both new methodological insights and substantive conclusions that also have practical implications.     

The long-run diffusion and techno-economic performance of national telephone networks: a case study of Ireland, 1922–1998

The telephone is one of the most widely used technologies in the advanced industrial economies, typically achieving a household penetration rate in excess of 90%. Over the course of this century, the plain old telephone system (POTS) has become a critical techno-social infrastructure for all sorts of economic, social and personal interactions. The question arises as to what has driven the widespread diffusion of the telephone? How can we describe the adoption of telephony as a core element in economic and social affairs in modern societies? In particular, how can we account for the great disparities in the rate and pace of the diffusion patterns of POTS, taking account of different national and historical contexts? This paper critically interrogates influential universal models or `theory-led’ explanations of the diffusion of telephone systems, especially their capacity to account for the empirically observable national variations. The authors test these models with respect to the historical trajectory of telecommunications development in Ireland, drawing on unique time-series data related to the actual patterns of telephone adoption, use and utility. The authors also re-assess the extent to which existing diffusion models throw some light on aspects of observable diffusion processes and patterns. A key conclusion from the approach adopted here is that in themselves, abstract deductive models are at best unsatisfactory. Whilst a combination of such `universal’ factors derived from more deductive models may be useful in elucidating different parts of the story, they are not sufficiently nuanced or adequate to describe or frame the complex stories of different national historical experiences. With the Irish case study we have attempted to illustrate the value of a historical and empirically based understanding of the socio-economic, political or institutional factors which have served to shape the development of telecommunications services and policy in Ireland.     

Exploring the mass adoption of third-generation (3G) mobile phones in Taiwan

Given that no all new mobile telecommunications technology are accepted by the mass market, this study aims to understand the mass adoption of third-generation (3G) mobile phones that is hypothesized to comprise three consumer perceptions: new technology, new service, and new handset. Based on the theoretical framework of a consumer's decision making process, an empirical study of the mass adoption of 3G mobile phones in Taiwan was conducted. This study demonstrated that perceived utility of a new mobile service was a key factor that resulted in mass adoption. Further, it was found that perceived utility of a new handset directly stimulate consumers to purchase 3G mobile phones. Perceived risk and perceived expense are not negatively correlated with intentions as hypothesized. Moreover, perceived no need was another key factor that inhibited adoption and purchase intention.     

Bigger and safer: the diffusion of competitive advantage

Research on the diffusion of technologies that give competitive advantage is needed to understand the role of technology in competition. Predictions on which firms first obtain useful technologies are made by cluster theory, which holds that the diffusion is geographically bounded, and network theory, which holds that adoption is more rapid in central network positions. These predictions can be evaluated using data on the diffusion of supplier innovations that give competitive advantage to firms in the buyer industry. Here, the diffusion of new ship types is studied using the heterogeneous diffusion model and data on shipping firm‐shipbuilder networks, showing that valuable innovations remain rare because they are not adopted by distant firms in geographical and network space. The strong influence of geographically dispersed interfirm networks on technology diffusion justifies a greater role of interorganizational networks in the theory of competitive advantage. Copyright © 2008 John Wiley & Sons, Ltd.     

Restructuring existing value networks to diffuse sustainable innovations in food packaging

Sustainable innovations in food packaging are important in terms of preventing food waste and reducing environmental impact, but existing industry regimes and networks may hinder their diffusion into established markets. However, research on reorientation of existing industries, and value networks in that situation, has been limited. This study examines the changes to existing industry value networks that can facilitate the diffusion of sustainable innovation in food packaging. Empirically, the transformation and distribution of agro-food waste into a new bioplastic packaging through the existing food packaging value network is investigated. As a result, the changes to the existing value network and their connections, facilitating the diffusion of the sustainable innovation, are identified at three levels – firm, network, and macro. The findings show the importance of opportunity recognition, but also the role of new actors, resources, activities, and relationships in the restructuring of the existing value network and actions creating supportive regulative framework and increasing market demand for such renewal. This creates understanding of how the adoption of sustainable innovations, such as new packaging materials, which might seem simple, is complicated by the broad changes required from the existing value network.     

Decentralizing human resources through telecommunications

Existing telecommunications technology offers alternative methods of creating and distributing written information, and of attending meetings and conventions. The author analyses the reasons why people choose how they use physical resources and shows that two unique human talents can be more effectively utilized with the aid of telecommunications. An implementation strategy for a new service such as teleconferencing is presented, together with results from trials which suggest the expected rate of adoption of similar future schemes. Finally, a success/failure criterion for new interpersonal telecommunications services is presented.     

Who Benefits from Teams? Comparing Workers,Supervisors, and Managers

This article offers a political explanation for the diffusion and sustainability of team-based work systems by examining the differential outcomes of team structures for 1200 workers, supervisors, and middle managers in a large unionized telecommunications company. Regression analyses show that participation in self-managed teams is associated with significantly higher levels of perceived discretion, employment security, and satisfaction for workers and the opposite for supervisors. Middle managers who initiate team innovations report higher employment security but otherwise are not significantly different from their counterparts who are not involved in innovations. By contrast, there are no significant outcomes for employees associated with their participation in off-line problem-solving teams.     

40 years on: An account of innovation in the regulation of UK telecommunications,in 3½ chapters

The past nearly 40 years have seen major developments in telecommunications networks and services, and in how they are regulated. This paper describes innovations in UK telecommunications regulation which have taken place over the period, broken down into stages, beginning with the regulation of the former monopolist by an independent regulator under a price cap, continuing the regulation first of mobile and then, under European Directives, of copper-based broadband, and ending with the diffusion of fibre networks. It is argued that a variety of changes have reduced the scope of innovation over the period, including domestic institutional reform, the limits placed on later decisions by earlier ones (path dependency), and the constraining impact of European Union law and regulation. The paper concludes with some consideration of the effects on future innovation of the UK’s withdrawal from the EU.     

Using Product Bundling to Facilitate the Adoption Process of Radical Innovations*

Generally, radical innovations are not easily adopted in the market. Potential adopters experience difficulties to comprehend and evaluate radical innovations due to their newness in terms of technology and benefits offered. Consequently, adoption intentions may remain low. This paper proposes bundling as an instrument to address these problems. More specifically, this paper examines how consumer comprehension, evaluation, and adoption intention of radical innovations may be enhanced by bundling such products with existing products. In addition, it is argued that the proposed effects are contingent upon the level of fit perceived to exist between the radical innovation and the product that accompanies it in the bundle. Furthermore, consumers' prior knowledge may affect the influence of bundling on the innovation adoption process as the interpretation of the meaning of new products may be strongly related to prior knowledge. This study therefore investigates whether consumer prior knowledge has such a moderating effect. Hypotheses are tested by means of an experimental study with three different radical innovations and distinguishing among offering the radical innovation separately, offering the radical innovation in a bundle with moderate perceived fit between the products, and offering the radical innovation in a bundle with high perceived fit between the products. Results show that product bundling enhances the new product's evaluation and adoption intention, although it does not increase comprehension of the radical innovation. Moreover, the results show that comprehension, evaluation and adoption intention of the innovation significantly decrease when consumers perceive a moderate fit between the products in a bundle. Taken together, these findings contribute to the bundling literature by showing not only that product bundling may indeed be an effective instrument to introduce a radical innovation but also that product bundling may be counterproductive when ignoring the critical role of perceived product fit as core characteristic of a product bundle. In addition, the notion that product bundling helps to enhance the evaluation and purchase intention of new and relatively complex products suggests a suitable strategy for new product managers to enhance benefits and reduce learning costs for radical innovations. Moreover, the effects of bundling on consumer appraisals of radical innovations are also shown to depend on the level of knowledge respondents possess regarding the product category of the radical innovation. More specifically, if bundled with a familiar product, novices tend to evaluate the innovative product more positively, but for experts no such effect can be detected. As such, these results provide additional specific implications for managers when introducing radical innovations in the market. Offering a radical innovation in a product bundle could be a fruitful strategy for companies that target customers with little or no prior knowledge in the product domain.     

The Co-Diffusion of Complementary Innovations: Supermarket Scanners and UPC Symbols

Co-diffusion is the positive interaction between the demands for complementary innovations that have separate adoption tracks. This interaction is of growing importance to business strategy because a firm can facilitate the diffusion of an innovation by supporting and participating in the development and commercialization of related complementary technologies. This phenomenon is of special importance where connectivity among products is central to end-user value. Louis P. Bucklin and Sanjit Sengupta report results of their empirical investigation of the co-diffusion of laser scanners in supermarkets and Universal Product Code (UPC) symbols printed on the packages of stocked items. Their results show asymmetric two-way co-diffusion effects between these innovations. Co-diffusion effects are found to be stronger than innovation effects. Finally, the analysis reveals differential co-diffusion effects across major market segments.     

Stock Market Returns to Financial Innovations Before and During the Financial Crisis in the United States and Europe

Prior studies have focused on innovations in various contexts but largely excluded financial innovations, despite their notable importance. Not surprisingly, financial innovations account for a substantial portion of world economies and the huge market capitalization of banks. Therefore, the authors focus on studying the type, success, and causes of success of financial innovations. Using an event study and financial expert ratings, this study analyzes the types of and payoffs to 428 financial innovations by 39 major banks in North America and Western Europe between 2001 and 2010. The results indicate that security and credit instruments constitute the most common and insurance innovations the least common financial innovations, which vary substantially by economic cycles and location. The average cumulative abnormal stock market returns to a financial innovation are $146 million. They are twice as high in the United States as in Western Europe. Thus, the market considers financial innovations profitable, not harmful, despite their apparent responsibility for the financial crisis. Surprisingly, the cumulative abnormal stock market returns to financial innovations are higher in recessions than in expansions. The authors find that riskiness and radicalness of the innovation increases abnormal returns, while complexity decreases cumulative abnormal stock market returns. Two interaction effects stand out: Riskiness of financial innovations has higher cumulative abnormal stock market returns in the United States than in Western Europe. Radicalness has lower cumulative abnormal stock market returns in recessions than in expansions. The authors discuss important implications of the findings.     

The transformation of the mobile telecommunications industry in Pakistan: A developing country perspective

This paper offers a rare insight into the reality of the mobile telecommunications market transformation in Pakistan. Our analytical framework treats the mobile telecommunications market as a complex socio-technical system. Specifically, we define the telecommunications market as being composed of technology standards and three sets of social actors that include government institutions, network and service providers, and users. In the case of Pakistan, these social actors together determine the adoption of standards and services, and thus shape the trajectory of the market change. Our case study provides evidence that a pro-competition policy is imperative for mobile telecommunications development in developing countries, and an independent regulator is critical in promoting technological innovation.     

Intermediating technologies and multi-group adoption: A comparison of consumer and merchant adoption intentions toward a new electronic payment system

Traditional technology adoption research has assumed a single adopting group. However, there are many settings in which multiple groups must jointly adopt an innovation in order for it to succeed. This is particularly true for new information technology innovations that mediate the relationship between two groups. For example, online exchanges (e.g., Freemarkets, GoFish) must attract both suppliers and buyers in order to be successful. The same is true for providers of hardware/software solutions for electronic data interchange and supply chain management. This article describes the phenomenon of multigroup adoption with a particular focus on applications within the financial services and retailing industries. Empirically, the article reports findings from a study that illustrates the importance of evaluating and managing multigroup technology adoption in the specific context of an in‐market trial of a new smart card‐based electronic payment system. Two distinct groups critical to the smart card's success are studied: consumers (who must decide to use the new card) and retailers (who must agree to adopt and use new technology needed to process smart card transactions). The study identifies which characteristics of the smart card innovation are most closely linked to intention to adopt for each group, and examines how these key characteristics differ by group. Perceptual data were collected via a mail survey from consumers and merchants living in the city where a one‐year market trial of the new card was taking place. Four separate sampling frames were established for both consumers and merchants who were participating in the trial as well as both consumers and merchants who were not participating in the trial. Random samples were then drawn from these frames. More than 350 consumers and over 250 merchants completed and returned the survey. Responses were analyzed separately for each of the four groups sampled. The most important characteristic leading to adoption identified by all four groups was relative advantage—the smart card had to demonstrate a clear competitive advantage over what they currently used. Compatibility (i.e., the degree to which the smart card fit with their current preferences) was also noted as important to all but the nonparticipating merchant group. Beyond this, the key drivers of adoption differed considerably by group. Participating consumers and participating merchants appeared to possess different perspectives when assessing their decision to adopt the smart card technology. Consumers seemed to value the notion that the adoption decision is under their control, whereas merchants seemed to place more value on the antecedents that had the potential to add to their bottom line. This suggests that it is necessary to institute different marketing tactics to attract the early adopting groups. In addition, significant differences in the importance of antecedents between participating and nonparticipating consumers and participating and nonparticipating merchants suggest that, over time, it may also be necessary to develop and use different marketing tactics for later adopters.     

Forecasting organizational adoption of high-technology product innovations separated by impact: Are traditional macro-level diffusion models appropriate?

This study examines forecasting accuracy when applying macro-level diffusion models to high-tech product innovations among organizational adopters. In addition, it explores whether the accuracy of macro-level diffusion models differs according to the impact of the new product. As a benchmark for comparison, three types of basic diffusion models are compared to three simple trend extrapolation models. The role of innovation impact in explaining forecasting accuracy is also considered. These issues are addressed by empirically testing organizational adoption data for 39 new high-tech products. Results indicate that for radical innovations the Bass model is best while for incremental innovations an external influence model is best. However, simple trend extrapolation models produced the most accurate overall forecasts. The purpose of the study is to reintroduce an important topic and give practitioners better insight into forecasting the organizational adoption of high-tech products once initial sales data becomes available.     

Innovation in the Retail Banking Industry: The Diffusion of Credit Scoring

We study technology diffusion in the retail banking industry. Our contribution to the empirical literature is twofold: Firstly, we explore technology diffusion in the financial sector, whose relevance has often been neglected; secondly we focus on credit scoring adoption, a relevant process innovation still under-explored. Estimating a set of duration models, we analyze the patterns of diffusion of this technology among Italian banks. We find that credit scoring is firstly introduced by large banks with broad branch networks, which can fully exploit scale economies. We present robust evidence that banks with large market shares operating in more concentrated markets are early adopters, providing a direct support of the Schumpeterian hypothesis that market power enhances innovation.The views expressed here are those of the authors and do not necessarily reflect those of the Bank of Italy.     

“Lock-in” vs. “critical masses” — Industrial change under network externalities

Where increasing returns to adoption play a role in the diffusion of a new technology, technological “lock-in” is now often claimed to occur. However, this result, and the modeling approach that produces it, are problematic. Further innovations could never have a chance of disseminating, if “lock-in” had occurred in the diffusion process of earlier innovations. Yet, in reality, industrial change does not come to a halt. The paper offers a discussion of the apparent paradox. From an alternative modeling approach conditions are derived under which a newly introduced technology can successfully disseminate in the market despite existing network externalities.