Innovations & Diffusion

Presented To:- Dr.V.N.Bajpai

What is innovation?
Innovation is the process and outcome of creating something new, which is also of value. Innovation involves the whole process from opportunity identification, or invention to development, prototyping, production marketing and sales, while entrepreneurship only needs to involve commercialization (Schumpeter).

What is innovation?
Today it is said to involve the capacity to quickly adapt by adopting new innovations (products, processes, strategies, organization, etc)

Also, traditionally the focus has been on new products or processes, but recently new business models have come into focus, i.e. the way a firm delivers value and secures profits.

Fads & Fancies whats next?

Slang

Stocks

Clothing & Appearance

Toys

Types of innovation
There are three types of innovation Continuous Innovation Discontinuous Innovation Dynamically Continuous Innovatoin.

The Innovation
Characteristics of Innovation Relative Advantage Compatability Complexity Trialability Observability

The Innovation
Relative Advantage over existing technologies - can be perceived, may be measured in economic terms, social prestige, convenience and satisfaction. Compatibility with existing values, past experiences, needs of potential adopters (and their social system) Complexity - degree to which an innovation is perceived as difficult to understand and use.

The Innovation
Trial ability degree to which an innovation may be experimented with on a limited basis. A trialable innovation represented less uncertainty to a potential adopter.

Observability Degree to which the results of an innovation are visible to others.

What is diffusion?
The process by which an innovation is communicated through certain channels over time among the members of a social system.

What is diffusion?
Diffusion is a special type of communication in which the messages are about a new idea.

The newness of the idea gives diffusion its special character it ensures that a degree of uncertainty is involved in diffusion.

The Process of the diffusion of Innovations

Diffusion is a process where an innovation is communicated through certain channels over time among members of a social system

Four Elements in Diffusion of Innovations:

Diffusion is a process where: 1) an innovation 2) is communicated through certain channels 3) over time 4) among members of a social system

THE INNOVATION-DECISION PROCESS

THE INNOVATION-DECISION PROCESS - the process through which an individual passes from first knowledge of an innovation to forming an attitude toward the innovation, to a decision to adopt or reject it.

THE INNOVATION-DECISION PROCESS

Five stages in the innovation-decision process: (1) knowledge, (2) persuasion, (3) decision, (4) implementation, and (5) confirmation.

THE INNOVATION-DECISION PROCESS

Knowledge occurs when an individual (or other decisionmaking unit) learns of the innovations existence and gains some understanding of how it functions. Persuasion occurs when an individual (or other decisionmaking unit) forms a favourable or unfavourable attitude toward the innovation.

Decision occurs when an individual (or other decisionmaking unit) engages in activities that lead to a choice to adopt or reject the innovation.

THE INNOVATION-DECISION PROCESS

Implementation occurs when an individual (or other decision-making unit) puts an innovation into use. Reinvention is especially likely to occur at the implementation stage.

Confirmation occurs when an individual (or other decision-making unit) seeks reinforcement of an innovation-decision that has already been made, but the individual may reverse this previous decision if exposed to conflicting innovation.

THE INNOVATION-DECISION PROCESS

At the knowledge stage the individual wants to know what the innovation is and how and why it works. At the persuasion stage the individual wants to know the innovations advantages and disadvantages in his or her own situation. Ultimately, the innovation-decision process leads to either adoption or to rejection.