On Technology Adoption

On tech adoption, measurement and useful stage models of prediction diffusion.

Technology Adoption
By Peter J. Denning, Ted G. Lewis
Communications of the ACM, June 2020, Vol. 63 No. 6, Pages 27-29
10.1145/3396265

Technology adoption is accelerating. The telegraph was first adopted by the Great Western Railway for signaling between London Paddington station and West Drayton in July 1839, but took nearly 80 years to peak (1920).a The landline telephone took 60 years to reach 80% adoption, electric power 33 years, color television 15 years, and social media 12 years.b The time to adoption is rapidly decreasing with advances in technology.

When we develop new technology, we would dearly like to predict its future adoption. For most technologies, total adoptions follow an S curve that features exponential growth in number of adopters to an inflection point, and then exponential flattening to market saturation. Is there any way to predict the S curve, given initial data on sales?

Technology adoption means that people in a community commit to a new technology in their everyday practices. A companion term diffusion means that ideas and information about a new technology spread through a community, giving everyone the opportunity to adopt. Adoption and diffusion are not the same. Here we are interested in adoption as it is manifest in sales of technology. Adoption models attempt to estimate two quantities that affect business decisions whether to produce technology. One is the total addressable market N, the number of people who will ultimately adopt. The other is t*, the time of the inflection point of the S curve.

It would seem that to develop a model of the S curve we would need a model of the underlying process by which technology is produced and sold. Three process models are common:

Pipeline: an idea flows through the stages of invention, prototyping, development, marketing, and sales, finally being incorporated into the market-place as a product people buy.
Funnel: similar to pipeline but the pipeline begins with multiple ideas and each stage winnows the number passed to the next stage until finally one product emerges into the marketplace. This model aims to compensate for the high failure rate of ideas. If failure rate is 96% (a common estimate), the funnel-pipeline must be seeded with 25 ideas so that there will be one survivor to the final stage.
Diffusion-Adoption: ideas are treated as innovation proposals that spread through a social community, giving each person the opportunity to adopt it or not.

Unfortunately, there are important innovations that are not explained by some or all of these models. For example, spontaneous innovations do not follow the pipeline or funnel models, and many diffusions do not result in adoption. Moreover, the models are unreliable when used as ways to organize projects—they explain what happened in the past but offer little guidance on what to do in the immediate future. Many organizations manage their internal processes according to one of these models. People in these organizations frequently experience a "Fog of Uncertainty" when something unanticipated comes up in one of the stages and it is not obvious what to do.  .... "