Friday, 22 July 2016 / Published in Leadership Blog, Uncategorized

Technology Adoption Rates by Industry

I recently had major and unexpected surgery and spent a week in the hospital recovering. As a technologist and a person who continually observers process management and how technology is leveraged, I was both thankful interested to see how the medical field has been a rapid adopter of technology. My diagnosis, left untreated, would have likely been a death sentence in the not too distant past. Suffice to say that I am very happy that the medical field is a rapid adopter. My thoughts wandered to wondering why some industries adopt faster than others.

An interesting perspective on this is Diffusion of Innovations theory. Everett Rogers, a professor of communication studies, popularized the theory in his book Diffusion of Innovations; the book was first published in 1962, and is now in its fifth edition (2003). The key elements from the theory are:

Innovation – Innovations are a broad category, relative to the current knowledge of the analyzed unit. Any idea, practice, or object that is perceived as new by an individual or other unit of adoption could be considered an innovation available for study.

Adopters – Adopters are the minimal unit of analysis. In most studies, adopters are individuals, but can also be organizations (businesses, schools, hospitals, etc.), clusters within social networks, or countries.

Communication channels – Diffusion, by definition, takes place among people or organizations. Communication channels allow the transfer of information from one unit to the other. Communication patterns or capabilities must be established between parties as a minimum for diffusion to occur.

Time – The passage of time is necessary for innovations to be adopted; they are rarely adopted instantaneously. In fact, in the Ryan and Gross (1943) study on hybrid corn adoption, adoption occurred over more than ten years, and most farmers only dedicated a fraction on their fields to the new corn in the first years after adoption.

Social system – The social system is the combination of external influences (mass media, organizational or governmental mandates) and internal influences (strong and weak social relationships, distance from opinion leaders). There are many roles in a social system, and their combination represents the total influences on a potential adopter.

Regarding the differences between industries, a key component is the characteristics of organizations/industries.

Organizations face more complex adoption possibilities because organizations are both the aggregate of its individuals and its own system with a set of procedures and norms. Three organizational characteristics match well with the individual characteristics above: tension for change (motivation and ability), innovation-system fit (compatibility), and assessment of implications (observability). Organizations can feel pressured by a tension for change. If the organization’s situation is untenable, it will be motivated to adopt an innovation to change its fortunes. This tension often plays out among its individual members. Innovations that match the organization’s pre-existing system require fewer coincidental changes and are easy to assess are more likely to be adopted. The wider environment of the organization, often an industry, community, or economy, exerts pressures on the organization, too. Where an innovation is diffusing through the organization’s environment for any reason, the organization is more likely to adopt it. Innovations that are intentionally spread, including by political mandate or directive, are also likely to diffuse quickly.

In summary, the driving factors within organizations seem to be: motivation, compatibility, and implications of change. When you analyze various industries from this perspective, it is easy to see why each adopt at different rates. Motivation changes with time and the business climate. In the Oil and Gas industry, we are seeing this today where efficiency is now the driving factor. Motivation that previously did not exist when prices were high. Companies are looking for technology to drive efficiency. For technology providers, it makes good sense to pay attention to the compatibility and implications factors. Managing compatibility, maximizing positive implications, and limiting negative implications can help drive adoption. Whatever your perspective, whether as an industry insider, or a technology provider, understanding adoption is key to successful implementation.

INTELLIGENTLY CONNECTING THE FIELD TO THE OFFICE