 | Munther Al-Dawood- Enterprise Expert (maldawood@growenterprise.co.uk) Dec 1 |
Innovation attributes impact the perception of buyer categories and the rate of adoption. In this article, I highlight the key innovation attributes and explain how these attributes influence the perception of buyers and the adoption rate. Attributes of innovations Innovations differ from any other works and are attributed to five factors: (1) relative advantage, (2) compatibility, (3) complexity, (4) trialability, and (5) observability. The rate of adoption, defined as the speed of innovation spreading out levels between individuals, depends on the qualities of these innovation attributes. The following is a brief description of these innovation attributes (Rogers, 2003)1: Relative advantage It is the degree we perceive innovation as better than the idea it supersedes. The relative advantage of an innovation, as perceived by members of a social system, is positively related to its rate of adoption. Compatibility It is the degree to which an innovation is perceived as consistent with the existing values, experiences, and needs of potential adopters. The compatibility of innovation, as perceived by members of a social system, is positively related to its rate of adoption. Complexity It is the degree to which we perceive innovation as difficult to understand and use. The complexity of innovation, as perceived by members of a social system, is negatively related to its rate of adoption. Trialability It is the degree to which we can experiment with an innovation limitedly. The trialability of innovation, as perceived by members of a social system, is positively related to its rate of adoption. Observability It is the degree to which the results of an innovation are visible to others. The observability of innovation, as perceived by members of a social system, is positively related to its rate of adoption. How do innovation attributes influence the rate of adoption? Individuals' perceptions of these attributes predict the innovation's rate of adoption. The rate of adoption is the speed at which members of a social system use innovation. Besides the normal attributes of innovations, here are other variables affecting the rate of adoption: - The type of innovation-decision (e.g., knowledge, persuasion, decision to adopt or reject, implementation, and confirmation).
- The nature of communication channels diffuses the innovation at various stages in the innovation-decision process (e.g., interpersonal, leader opinion, change agent, or mass media).
- The nature of the social system (e.g., size, characteristics, influences, components of individuals and units, leader opinion, or change agent).
- The extent of change agents' efforts in diffusing the innovation (i.e., how influential is the change agent on changing the individuals' or units' opinions).
- The time spent to develop, commercialise, adopt and diffuse innovations.
How do innovation attributes influence innovation categories? In the innovation lifecycle, innovations progress from introduction to growth to maturity and discontinuity, influenced by the innovation attributes and the perception of buyers or categories. As a rule of thumb, when an innovation progresses and gets more attractive, this will result in a positive perception of categories and an accelerating adoption rate. Here is a brief description of the relationship between the innovation attributes, the progress of diffusion, and the perception of categories: - Pre-launching category: this comprises Labs, research centres, and universities that conduct research and advance knowledge of technologies to solve practical problems. These players can theoretically develop rough solution technologies with outlined prototypes and drawings. These products lack market touches, which are carried out and rectified by techies. In this stage, the progress of adoption is very slow, innovation attributes are incomplete, and the risk of adoption is relatively high.
- Launching category: this comprises innovators or techies who are business entities aiming at advancing rough technologies developed by researchers. Techies can produce technologies with more marketable attractions but with a limited scope of adoption. At this point, entrepreneurs or early adopters will enter the line, investing in these technologies and making more marketable products and applications. In this stage, the progress of adoption is very slow, innovation attributes are completed as technology is created but blurry, and the risk of adoption is relatively high.
- Growth category: this comprises early adopters who invest in technologies invented by techies to produce technology products and applications. In this stage, the progress of adoption is picking up, innovation attributes are completed as technology products, and applications are created but still not positively perceived by the customers, and the risk of adoption is becoming tolerable. However, these innovative products and applications are yet to cross the big chasm and go market stream.
- Advanced growth category: this comprises mainly the early majority of the market streams. In this stage, technology products and applications invested by early adopters will go stream by the early majorities who create technology platforms (i.e., developing a product contributed by multi suppliers). In this stage, the progress of adoption is very high and accelerating, innovation attributes are completed and attractive, especially for those related to the value advantage and observable, and the risk of adoption is relatively low.
- Late growth and maturity category: this comprises late majorities (conservatives) and laggards. In this stage, the market begins to saturate and mature, where late majorities conduct sustainable activities like customer intimacy and operational excellence innovation to sustain the market share of their technology platforms. In this stage, the progress of adoption is still high but with slowly to zero accelerating growth, innovation attributes are completed but products become commodities and competition is fierce, and the risk of adoption is relatively high but decreasing.
- Decline category: this comprises laggards. The final stage is decline, where laggards encourage internal and external capital to maintain the growth of their businesses. However, this stage won't last long before innovation is discontinued and replaced by innovations. In this stage, the progress of adoption is very slow, innovation attributes are becoming unattractive as products become commodities (identical), and the risk of adoption is relatively high as innovation becomes obsolete.
- Rogers, the author of the book- Diffusion of innovation theory, assumed that each of the adopter categories explained above differs in their demographical features, personal characteristics, communication behaviour and social relationship. Thus, chasms separate lifecycle stages, of which the biggest is between early adopters and the early majority.
Final note: the book- Your Guide To Reach Innovation, is an actionable guide to innovation from beginning to end. Enjoy reading the book, and I look forward to your reviews. Author: Munther Al Dawood www.growenterprise.co.uk maldawood@growenterprise.co.uk References: - Everett Rogers, 2003. Diffusion of innovations, fifth edition, Free Press, New York.
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