Diffusion of innovations

Summary

Diffusion of innovations is a theory that seeks to explain how, why, and at what rate new ideas and technology spread. The theory was popularized by Everett Rogers in his book Diffusion of Innovations, first published in 1962. Rogers argues that diffusion is the process by which an innovation is communicated over time among the participants in a social system. The origins of the diffusion of innovations theory are varied and span multiple disciplines. Rogers proposes that five main elements influence the spread of a new idea: the innovation itself, adopters, communication channels, time, and a social system. This process relies heavily on social capital. The innovation must be widely adopted in order to self-sustain. Within the rate of adoption, there is a point at which an innovation reaches critical mass. In 1989, management consultants working at the consulting firm Regis Mckenna Inc. theorized that this point lies at the boundary between the early adopters and the early majorit

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A Digital Platform connecting Academia and Small Businesses: An opportunity for Knowledge Management Experiments

Quentin Adrien Cavillier

Digital transformation is one of the biggest phenomena of this decade. One enabler of this revolution was cloud computing. Today, software engineers can deliver software as a service (SaaS), which is accessible to users through the Internet. Slack, Shopify, and Dropbox are examples of successful SaaS. We are experiencing an emergence of numerous small web applications with easy-to-use features for specific domains such as project management, accounting, resources management, customer relationships, and so forth. Thus, SaaS has been recognised as particularly well suited for the digital journey of small enterprises. However, surveys conducted by governmental agencies reveal a low adoption rate of SaaS by small enterprises in traditional sectors such as construction, services, and dealership. Previous studies have highlighted a lack of top management support, a weak relative advantage perceived, and a lack of knowledge as the key reasons for this low level of adoption. Whilst academic research defines these critical factors, it has not found potential solutions to mitigate them. Thus, this thesis presents two exploratory studies to enhance the adoption of digital practices by small traditional enterprises (STEs). A first study explored the value of leading collaborative projects between students and STEs about the assessment of SaaS solutions. A secondary objective of this initiative was the design of a platform acting as an open innovation platform. A three-year study allowed the completion of thirty-nine projects and the testing of two different platform designs. The feedback from students demonstrated the value of a well-structured platform composed of different management models for each project phase. Furthermore, 67 per cent of the STEs involved on the platform acknowledged the value of such collaborative projects. However, the collaborations did not improve top management support, and projects tended to stagnate because of various organisational factors. A second study, using a mixed-methods research design, was performed to explore the relations amongst the organisational factors acting as enablers and barriers to the digitalisation of STEs. The objective was to improve understanding of TSEs' situation and devise a proposition to enhance top management support. An academic contribution of this study was the design and application of a conceptual framework combining organisational factors from the literature on dynamic capabilities, organisational inertia, and intellectual capital. The combination of the qualitative observations and quantitative results highlighted the importance of the sensing and leadership capabilities for STE directors. They also revealed the mediator effect of the relational capability on the development of these latter. Therefore, this thesis makes important contributions to the literature on open innovation by defining a new field for leading knowledge management experiments. It also contributes to develop a comprehensive overview of the organisational factors affecting STEs' adoption. A further major contribution is the potential value of the digital platform to innovate the services of practitioners, such as governmental agencies and consultants, that support STEs on their digital transformation journey. In conclusion, this research is valuable in opening the discussion about potential innovations that might reshape the relationship academia-business.

EPFL2019

Metropolitan Innovation Systems: Inquiry into the co-evolving relations between Industry, University and Government

Jiayun Shen

Innovation is crucial and decisive for the long-term development of a metropolitan region in the global economy. While firms certainly play a significant role in the development of specific innovation, the environment that nur-tures innovative firms and disseminates innovations in the economy involves a complex web of interactions among a range of actors, including firms, universities, and local governments. The performance of these actors, but also their interactions, have significant impacts on the overall innovation performance of the region. The great complexity of these interactions makes it challenging for many regions to strengthen the innovation per-formance of their areas. To address this challenge, the main innovation actors â ranging from firms and universi-ties to governments â have made great efforts to learn from the famous example of Silicon Valley. However, despite some self-promotion, almost all such efforts of these regions have failed. The root of this failure lies in the lack of holistic and historical view in the learning process and the lack of proper coordination among actors in the implementation process. The existing learning about the Silicon Valley model mostly focuses on the period since the 1970s when Silicon Valleyâs success has been widely acknowledged; and it provides static analysis by listing the key features of an already successful metropolitan innovation system. While such an approach cer-tainly helps with understanding, it could be misleading, since the actors often implement the lessons learned from the advanced stage that do not fit the current stage of the region. Hence, this thesis studies the 170 years of Silicon Valleyâs development to shed light on how the actors in the three institutional spheres interact and coordi-nate in the development process. Provided that the changed global environment and the different local cultures invite the additional issue of whether the learnings are applicable to the new contexts, three case studies have been conducted in this thesis â about Beijing, Shenzhen, and Hangzhou in China â over a time span of 70 years (from 1950 to 2020). These cases are then analyzed with the framework and theory grounded from the case of Silicon Valley. Synthesizing the analysis of the four selected cases, the development path of the Metropolitan Innovation System (MIS) in Beijing most closely resembles the Silicon Valley model, since both moved from a âlaissez-faireâ model to a balanced âTriple Helixâ model (where industry, university, and government have intensive interactions and play interwoven roles). The MIS in Shenzhen reveals a path that starts from the âstatistâ model, while the one in Hangzhou started with a semi-balanced Triple Helix model. The three paths converge in the sense of heading towards the balanced Triple Helix model and all three improve the interaction and coordination between the ac-tors in the three spheres in a process that ultimately creates an open and conducive environment. This includes the ability to attract high-quality talent and cognitive capital to the region. By providing thick-descriptions of the four cases and the tentative theory about the development of MIS, this the-sis contributes to the literature of innovation system, the Triple Helix model, and the New Institutional Economics, and contributes to practice by providing 20 recommendations for the actors in the three spheres.

EPFL2020

This thesis comprises three essays on the relationship between innovation and finance. Although previous research has acknowledged the multi-faceted nature of innovation, this thesis unpacks its constituent elements, compares alternative drivers of innovation — focusing on the role of financial variables —, and explores when each of these drivers is important relative to the others. Evidence is based on survey data on Italian manufacturing firms over the years 1995-2003. The main contribution of this dissertation is to show how innovation at the firm level varies across different dimensions, documenting several robust empirical regularities, which must be accounted for. The first essay explores the determinants of various characteristics on the propensity to innovate in the Italian manufacturing sector. First, we concentrate on firms characteristics, and include in the study age of firm, size of firm, export shares of revenues and group membership. Second, we examine industry characteristics, such as type of industry in terms of technology level and market concentration. We also test the impact of characteristics of the firm's geographical area, including an indicator of financial development for the firm region. We finally extend our model including financial variables at the firm level in order to evaluate the association between profitability & risk and innovation. The second essay further examines the determinants of innovation, focusing on why firms develop product innovations rather than process innovation, or product and process innovations simultaneously. Empirical studies have highlighted the different impact of product and process innovation on various factors (such as, for example, international competitiveness, the level of employment and the types of skills used, and on the profit rate of firms). However, little is known from either a theoretical or an empirical point of view about the determinants of these different types of innovation. The third essay examines the question of whether access to credit is empirically more difficult for innovative firms than for those undertaking traditional investment projects. The idea that market financing of innovative projects is likely to encounter severe obstacles is not new. Indeed, it dates back at least to Schumpeter's defence of monopoly power since it not only guarantees that innovative firms can internalise the benefits of their innovations, but also provides funding for future innovative projects. Testing this proposition requires information on the innovative content of a given firm and on the limits to borrowing it encounters. Using the above mentioned survey data, we are able to identify credit constrained firms and use this information to make inferences on bank's lending strategies towards firms whose investment projects differ according to expected return and riskiness.

EPFL2008