1. What factors influence the adoption and diffusion of innovations?
There are a number of factors that influence the adoption and diffusion of innovations and they refer to the type of advantage the innovation provides. The first factor is the compatibility of the innovation. This is to mean that if there is a new software that is compatible with the existing frequently used operating systems then its adoption by users and diffusion is set to be fast (Rogers, 1995).
Secondly, the adoption and diffusion would be faster if the innovation itself allows for it to be observed and tested out. On the contrary, an innovation that does not lend itself to observation and scrutiny often finds difficulty winning the trust of its potential users because it remains completely alien to them.
Thirdly, adoption and diffusion of an innovation would be faster it is simple and not too complex.
Another factor is the ability of the innovation to meets the needs of an individual. As such, if the innovation has high relative advantage to the user, its adoption and diffusion will be faster. Also, the relative cost of the innovation to the consumer also influences its rate of adoption and diffusion (Tidd & Bessant, 2009). A not-too-expensive innovation will be taken up by many while an overly expensive one will find less market.
Other factors include less physical distance among people, strong pro opinion leaders, many people willing to take risk, are technology-savvy, and communicate frequently.
2. What methods of forecasting technology and markets are available, and what are their relative advantages and disadvantages?
Delphi technique is currently a major forecasting technology in the market. It is efficient in providing input for ideas as well as problem-solving. Its relative advantages include being conducive to independent thinking, allows information sharing, offers reliable forecast results, is inexpensive and allows for anonymity of participants. However, it is time consuming and demands for the ability to write besides requiring time and participant commitment( Rogers, 1995). Secondly, there are the econometric models which integrate economic theory, model building, together with statistical methods. These methods have the advantages of being based on cause-effect relationships, ability to forecast the extent of the change, flexibility of the model plus providing alternative future scenarios. Nonetheless, they have the disadvantages of being less accurate in case particularly in short term forecasts, based on assumptions along with being expensive(Porter, 1991).
Another method used for forecasting technology and markets is the morphological analysis method which does structuring and investigation of the set of relationship. It is beneficial in the sense that it allows for definitions and parameters that are ambiguous to be revealed, exposes complete ranges of conditions, and reveals relationships in an unbiased ways. On the other hand, it has the shortcoming of greatly needing experienced facilitation besides the fact that developing parameters is very difficult (Tidd & Bessant, 2009).
References:
Porter. A. (1991). Forecasting and management of technology. Wiley-IEEE,
Rogers, E.M. (1995). Diffusion of innovations (4th ed.). New York, The Free Press.
Tidd, J., & Bessant, J. (2009). Managing Innovation : Integrating Technological, Market and Organizational Change 4th Ed. Hoboken. New Jersey, Wiley & Sons.
