CONCEPT OF DIFFUSION OF TECHNOLOGY
The success of a technological innovation depends on the diffusion of the innovation to those who can best make use of it. The term diffusion refers to the spread of a new idea (product, technology, service, or method) from the time of its invention or creation to its ultimate adoption by an increasing number of users, in different circumstances.
Diffusion involves special types of communication methods or system to help diffuse changes in practice, as well as changes in knowledge or attitudes. Thus, diffusion is the process of closing the gap between what people do not know and what they can effectively put to use. The process is complete when:
- a sufficient number of customers are using the innovation to pay back the amount used to develop it
- it starts to make a profit
- a system is in place for assessing the need for changes to ensure the longevity of the technology.
We have learned about invention, innovation, technology, and technology transfer in this webpage. Technology diffusion is closely related to these topics, particularly to innovation and transfer to technology. It facilitates process of technology transfer by acceptance of innovation on wider scale, for better returns, to the owner or supplier of technology. Diffusion of innovation or technology is more relevant to publicly funded R&D organisations and academic institutions which are generally engaged in basic and applied research and which, by themselves, are not in a position to commercialise the innovations. These innovations may be in public interest in the widest sense of the term. Also, there are highly innovative research companies or small firms in advanced countries who sell their innovations/technologies to large corporations which have adequate infrastructure and capability to commercialise the same. Large corporations do not generally diffuse their first generation technologies or innovations until the latter have not matured or have become practically obsolete in their native markets. They think of diffusion only after adequate returns have already been obtained on the investments.
In India, attempts are made to diffuse inventions, innovations and technologies generated in national or publicly funded R&D organisations and academic institutions through technology transfer agents and other channels of communications including such organisations themselves. Many organisations, such as Indian Space Research Organisation (ISRO), Atomic Energy (AE), Defence Research and Development Organisation (DRDO), Council of Scientific and Industrial Research (CSIR) have set up their own mechanisms to diffuse their innovations and technologies. Recently, Indian Institute of Technology (IIT), Delhi, has also set up a foundation for innovation and technology transfer. The manufacturing companies in India generally are not in a position to diffuse because their technologies have been acquired from external sources. The situation in India or several other developing countries is quite different from industrialised countries in so far as diffusion of innovation or technology at the firm level is concerned.
THE IMPORTANCE OF DIFFUSION
Making the most of technological innovations should be an explicit goal of each corporation – a goal reflected in a continuous set of action steps. Broad diffusion of a technological innovation does not just happen; it must be managed.
Companies that sell technology to one or two types of customers must take time to diagnose the needs of other potential customers. In addition, companies must attempt to diffuse their domestic technology into foreign markets by adapting them to different needs. For instance, a company that makes telephone switching equipment for temperate climate and conditions of stable power supply should adapt the technology for tropical climates and unstable power supply conditions.
A technological innovation can have a long life if management views it in the proper way. A technology that becomes obsolete in one market may still be considered new in another. For example, some of the technologies that India has been obtaining from abroad in high-tech areas like computers and communication are technologies that have outlived their life in their own markets but are still found to be attractive here.
Several models for diffusion of innovation have been proposed by various specialists/experts in the field (Nawaz Sharif, 1983). These include Coleman Model, Dodd Model, Mahajan-Schoeman Model, Sharif-Ramnathan Model, and Polynomical Model. All these models involve certain assumptions of varying degrees and advanced mathematical computations. It may however be mentioned that these models are highly theoretical in character. Their practical utility is doubtful even for R&D organisations or firms in the developed countries.
As mentioned earlier, in development countries such as India, the technology diffusion is generally considered important for R&D organisations and academic institutions which are engaged in development and transfer of technologies. A well managed technology diffusion system enables an organisation to plan its technology development projects in a more meaningful manner as well as transfer the technologies more successfully. Such an approach results in better returns for the investments made in R&D and technology development systems. At times governments are also keen to promote diffusion of technologies having social or strategic importance such as for energy conservation, pollution control or environment friendly technologies such as family planning and population control methods, better utilisation of scarce natural resources, and so on.
At the firm level, the need and importance of technology diffusion is directly related to its innovative capacity and the levels of technologies developed. In India, such an innovative capability, or management policies in this direction are not much in evidence as most of the firms are often engaged in, development or acquiring of technologies relevant to their manufacturing activities only i.e. for captive use.
However, there are cases of transfer of technologies by Indian firms to other developing countries. A well managed technology diffusion system becomes important for such firms. With the increasing emphasis on exports, there will be a greater need for adopting better planned technology diffusion system on the part of the firms, and hence technology diffusion would assume greater importance in the times to come. The innovative firms or firms engaged in higher level of research on the technological spectrum will have to plan appropriate strategies for identifying external markets, for horizontal transfer of technologies, and for technologies developed by them which are not relevant to their direct manufacturing activities.
PERSPECTIVES ON DIFFUSION
There are several perspectives on diffusion, some of which are discussed below:
Technological innovation and diffusion have traditionally been viewed as separate processes. This view treats diffusion as the marketing efforts required to expand the acceptance of the technology beyond the markets initially targeted. This limited orientation prevents management from perceiving what employees can do at each stage of the total technology development process to affect the eventual diffusion of the technological innovation. Successful diffusion requires a comprehensive perspective on the technological innovation/diffusion process. This perspective can then serve as the basis for a cohesive strategy.
The adoption perspective is most often used to describe the diffusion process. This perspective focuses on how the various channels and modes of communication (media, interpersonal etc.) can be used to influence a diverse group of potential customers to adopt a technological innovation. The issues may include how best to prepare the message about the technological innovation for these diverse groups, how to select the appropriate media mix and how to obtain feedback about customer needs. For example, this perspective is often helpful in diffusion of technological innovations like a new method of cultivation or irrigation in rural India where a major task would be determining how to convince people in adopting the new technology.
This perspective focuses on the technical skills and tools required to implement/use the technological innovation. The technological perspective also looks at how well the provider of a technological innovation understands the environment of the user and the user’s ability to apply the technology and also the ability of intermediate agencies like the government. (Many technology transfers in India like that of the technology for EPABX have taken place at the initiative of the innovating organisation to the user (through the government).
The infrastructure of the region in which the technological innovation is targeted is an important factor in diffusing the innovation. Infrastructure aspects that affect diffusion include transportation, terrain, weather, availability of energy, communication, etc. Poor infrastructure development can constrain some innovations. Diffusion will occur only if the necessary facilities exist. For example, poor access to maintenance and repair service at acceptable costs constrain the adoption of information technology in maintenance of land records, primary health care centers etc. The application of biotechnology to agriculture will require building infrastructure like distribution and service networks and teaching farmers and others how to use the new techniques. In this case, diffusion will most likely involve some combination of agents, including government, cooperatives, private distributors, and many others-most of whom may be beyond the direct control of the biotech firm. In order to develop a successful diffusion strategy the diffusing organisation must consider all these aspects in conjunction with the infrastructure that is available.
The regulatory/societal perspective looks at the effects of government policies, regulatory requirements, and bureaucratic processes, and the development stage of the area in which the technology is to be used. This perspective is particularly important for diffusion of technologies in developing countries. Regulatory requirements affect the ability of potential customers to adopt innovations as well as the ability of a diffusing company to compete with other companies. For example, technologies that are capital intensive may not be encouraged by governments which are interested in pursuing a policy of employment creation through labour oriented methods. Companies may not want to part with their technology to countries that do not provide adequate patent and copyright protection (intellectual property rights). Similarly, societal issues like consideration of a technology mostly for elitist living can affect the diffusion of a technological innovation.
The models perspective looks at the development of models that management can use to predict the behaviour of potential users of a technological innovation and, consequently, develop strategies for diffusing an innovation. To model a diffusion process, an analyst works with a few variables to fit a curve that describes the spread of innovation over time. These parameters might represent the size of the population, number of alternate technologies in use, complexity of the technology etc. For example, some investigators have analogised a technological innovation diffusion process to the spread of an epidemic through a population and have accordingly used one or another of several epidemiological diffusion models.
Several models for diffusion of innovation have been proposed by various specialists/experts in the field. These include Coleman Model, Dodd Model, Mahajan-Schoeman Model, Sharif-Ramanathan Model, and Polynomial Model. All these models are based on certain assumptions and require advanced mathematical computations.
The comprehensive perspective uses all the perspectives discussed so far in developing a diffusion strategy. It views the diffusion process as part of a total innovation process. Many people are involved in the innovation/diffusion process and this view maintains that each person involved with a technological innovation must maintain an interest in it for a much longer time than what is normally spent in developing the technology, and further that he should be available to make the changes that may be required over the life of the technological innovation.
MAJOR DIFFUSION ACTIVITIES
Diffusion is a multi-faceted activity. We shall briefly discuss phases of diffusion one by one.
A. Individual Action
The diffusion process begins with the first stage of innovation the individual action stage. During the individual action stage, the inventor proceeds (sometimes without even realising it) through a series of steps that result in practical use of an innovative idea. The innovator may draw on the resources of others, but the effort is essentially individual. This stage includes eight phases, each of which contributes to the innovation and diffusion process.
i) Creation of Favourable Conditions: The leadership in the organisation must establish the expectation that everyone will take some responsibility for generating innovations and make some contribution to their diffusion. In return, the people in the organisation should expect that they will be rewarded for their efforts. The employees must also believe that they can generate innovations and can spot opportunities for innovations for the benefit of the company.
ii) Identification of Unfulfilled Needs: Employees should be on the lookout for people’s needs that can lead to the modification of current technologies or to the creation of new technologies.
iii) Definition of the Problem: Marketing must test the needs that it perceives against the reality of user needs. People in marketing should translate their perceptions of need into terms useful to people in development; those in development should translate what they see into terms useful to research; and those in research must translate their findings into terms useful to development and marketing as each individual seeks uses for possible new technologies. Each individual from ever function can thus participate in the innovation process in some way.
iv) Preparation for Problem Solving: Gathering information about a need- how widespread it is, what others have done to solve it, what solutions have not worked and what consumers really do want-is part of the preparation for solving a problem. All the capabilities of the company should be used in this preparation, including the patent office, the library and the organisation’s technological and marketing gatekeepers. Most studies of modern management emphasize the need to wander around among users and consumers to find out what their needs are.
v) Incubation: This phase is usually a most private affair. All that an individual can do is to recognize that each person will have unique conditions that stimulate ideas. People must learn to respect the range of circumstances that others find useful for innovative/creative thinking and resist efforts to impose conformity at this phase.
vi) Inspiration: Individuals are usually exhilarated when they have struggled with a problem for some time and finally come up with what they think is a solution. They need all the momentum they can achieve to carry them through the more tedious steps of gathering technical and market feasibility data before proceeding. Supervisors and co-workers should learn how to mirror some of their colleague’s enthusiasm instead of doing what most people do – finding a way to prick the bubble of excitement.
vii) Externalisation: Preparing the idea for others to evaluate and develop is a crucial task, since inadequately prepared descriptions are apt to be rejected. Management should help people prepare their ideas for presentation within and outside the organisation.
viii) Influence: Most ideas have political aspects. Once an idea has been prepared for review, knowing whom to influence, when to influence, and how to influence people within the company becomes important. Very often those who are most able to generate solutions to problems are least able politically. Those with political experience should be ready to help with advice.
B. Applying Basic Research
This stage represents the translation of the findings of people who have done the basic research (people) into applications. The application of basic research is a more organised effort than individual action. The disciplined activities of specialists are focused on seeking orderly explanations of phenomena and practical applications of that knowledge. However, the roles of the individuals are critical throughout the process.
Diffusion during this stage requires an understanding of how various disciplines and functions interact with each other. This interaction may occur as a result of either mission-oriented research or the interaction of people in different disciplines trying to solve problems in their own areas.
Diffusion at this stage involves linking the basic scientist’s work to the applied scientist’s work and the world outside the laboratory through the Comprehensive diffusion perspective. Applied scientists have a responsibility to keep abreast of consumer problems that need solution. Basic scientists need to describe their findings in ways that allow applied scientists and marketing people to visualize market possibilities. Many successful basic research scientists take the opportunity to visit the field to see what is going on.
Improving the linkage between R&D and marketing is highly related to successful, continuous and timely – diffusion efforts. Lack of communication-can cause many problems. An inventive scientist may develop a new way of making bricks and constructing houses from the fly ash of thermal plants, but may not get feedback about the market’s acceptance of the idea. The lack of feedback may cause him even to leave the company and abandon his idea.
Even though basic research people have a legitimate need to follow their own leads, unencumbered with the need to consider the social utility of their findings, they cannot avoid thinking about the probable impact of their work upon society. The movement of an idea from the world of science (i.e. the laboratory) to application is a critical process. The innovative organisation must make special efforts to prevent an idea from dying at this stage and to cut the time required to pass through this interface.
The third stage of the innovation process is the industrialisation stage. The industrialisation stage focuses on developing a practical and profitable application of the technology. It links customer demand with technical opportunities and out of this emerges a design concept for evaluation. Linking technical opportunities with market demand requires coordination and cooperation among applied scientists, engineers and marketing personnel, especially market research personnel. The joint efforts of many people from many functions, including personnel from R&D, marketing, corporate development and planning, and new product development, can best generate the initial product concepts.
During this stage it is wise to keep in mind the company’s capabilities and strategies when looking for relevant customer needs that make use of these capabilities. The company should formally re-examine and restate its capabilities from time to time, since these often grow incrementally as the company acquires the ability to cope with threats and opportunities. For example, some of the computer graphics technology that Centre for Development of Telematics (C-DOT) at New Delhi developed for its switching applications was also found to have wide applications in railways and defence.
If the concept survives the needs assessment, the organisation may choose to implement the innovation or it may adopt someone else’s innovation. Knowing that other firms have done is therefore an important input to the creative process at all phases of innovation. The firm can sometimes acquire an innovation and adapt it at less expense than it would take to develop one, internally, from scratch. During this stage a limited target market segment (possible user group) is selected for tryout. During this initial commercialisation effort the firm can locate and correct the flaws in preparation for full commercialisation.
After initial development of the technology concept, commercialisation receives the major emphasis. The boundary between the industrialisation and commercialisation stage is hard to define exactly. Commercialisation includes finding solutions to all the problems of defining the technology, organising trials, mechanisms for transfer of technology and expanding and managing the technology life cycle.
Prelaunch activity marks the beginning of this stage as a small-scale pilot test gets under way and the first customer trials begin. The next major activity is the launch of the innovation trails. During such trails, the organization can assess technology acceptance, alter methods of transfer, check manuals for ease of understanding and the like.
Communication activities are the next major events. The marketing department develops a description of the attributes of the new technology, selects channels for its marketing message, and begins development of a promotional programme. Marketing next assesses the target market segment to identify the potential adopters that should be influenced first. The firm next develops the corporate capabilities for managing the diffusion, setting pricing policies and selecting and segmenting the market as a whole.
Commercial development of innovation takes place next. Diffusion activities now focus on spreading the net by acquiring more adopters. Usually the next step, once sufficient customer demand indicates continuance, is transfer of the technology to an operating division. Diffusion methods used in this transfer are especially important. Once an operating division launches the technology, it must maintain it. The division must assess signs of decline or changing consumer preferences and take corrective action.
E. Full Scale Diffusion
This is the last stage of a comprehensive innovation/diffusion process. It includes a search for a wider range of potential markets, new industries new geographic regions, new market segments that have not been explored, and new ways to couple the innovation with other innovations. The way that electronics and computers have diffused throughout the industry and the world is a prime example of full scale diffusion.