Technology Adoption

39 Results



Bitcoin is an online communication protocol that facilitates virtual currency including electronic payments. Since its inception in 2009, Bitcoin has served approximately 41.8 million transactions between 62.8 million accounts, and the total market value of all bitcoins in circulation exceeds $8 billion. This article, forthcoming in the Journal of Economic Perspectives, presents the platform's design principles and properties for a non-technical audience; reviews its past, present, and future uses; and points out risks and regulatory issues as Bitcoin interacts with the conventional financial system and the real economy. Key features of Bitcoin's design are irreversible transactions, a prescribed path of money creation, and a public transaction history. Collectively, these yield a system that is understood to be more flexible, more private, and less amenable to regulatory oversight than other forms of payment--though as discussed in this paper, all these benefits face important limits. Yet the authors argue that the decentralization initially touted by Bitcoin has not fully come to fruition. Indeed there seem to be significant forces pushing towards concentration despite Bitcoin's design, calling into question the benefits that Bitcoin can offer compared to existing payment mechanisms and other stores of value. Read More

Has Apple Reinvented the Watch?

Will the Apple Watch reinvent wearables the way the iPhone did smartphones? Ryan Raffaelli shares his insights. Open for comment; 4 Comments posted.

The Unfulfilled Promise of Educational Technology

With 50 million public school students in America, technology holds much potential to transform schools, says John Jong-Hyun Kim. So why isn't it happening? Open for comment; 8 Comments posted.

Mechanisms of Technology Re-Emergence and Identity Change in a Mature Field: Swiss Watchmaking, 1970-2008

According to most theories of technological change, old technologies tend to disappear when newer ones arrive. As this paper argues, however, market demand for old technologies may wane only to emerge again at a later point in time, as seems to be the case for products like Swiss watches, fountain pens, streetcars, independent bookstores, and vinyl records, which have all begun to claim significant market interest again. Looking specifically at watchmaking, the author examines dynamics of technology re-emergence and the mechanisms whereby this re-emergence occurs in mature industries and fields. Swiss watchmakers had dominated their industry and the mechanical watch movement for nearly two centuries, but their reign ended abruptly in the mid-1970s at the onset of the "Quartz Revolution" (also known as the "Quartz Crisis"). By 1983, two-thirds of all watch industry jobs in Switzerland were gone. More recently, however, as the field has moved toward a focus on luxury, a "re-coupling" of product, organizational, and community identity has allowed master craftsmen to continue building their works of art. The study makes three main contributions: 1) It highlights the importance of studying technology-in-practice as a lens on viewing organizational and institutional change. 2) It extends the theorization of identity to products, organizations, and communities and embeds these within cycles of technology change. 3) It suggests the importance of understanding field-level change as tentative and time-bound: This perspective may allow deeper insights into the mechanisms that propel emergence, and even re-emergence, of seemingly "dead" technologies and industries. (Read an interview with Ryan Raffaelli about his research.) Read More

Technology Re-Emergence: Creating New Value for Old Innovations

Every once in a while, an old technology rises from the ashes and finds new life. Ryan Raffaelli explains how the Swiss watch industry saved itself by reinventing its identity. Closed for comment; 6 Comments posted.

Heterogeneous Technology Diffusion and Ricardian Trade Patterns

The principle of Ricardian technology differences as a source of trade is well established in the theory of international economics. This theory argues that countries can focus on producing products in which they have comparative productivity advantages; subsequent exchanges afford higher standards of living in all countries than are possible without trade. While a key theory, economists have struggled to quantify the empirical importance of comparative technology advantages and their link to trade. This is especially difficult given the high degree to which technology states of countries and industries can be correlated with other traits about countries that could also promote trade. This study contributes to scholarship on Ricardian advantages through the development of a substantially larger dataset than previously utilized and the study of changes in technology/trade over time. Even more important, the study provides a tool for isolating relative technology growth in exporting countries across industries. The foundation for this identification is the modeling of Ricardian advantages through differences across countries and their industries in terms of their access to the U.S. technology frontier. The differences arise due to historical migration patterns (e.g., Chinese migration to San Francisco versus Hispanic migration to Miami). The study analyzes how technologies flow differentially to countries and industries based upon the historical settlement patterns of migrants from countries and the spatial development of new technologies in the United States (i.e., which technologies flourished in San Francisco versus Miami). The study finds that these differential technology flows are powerful enough to influence world trade patterns, and in the process, they provide new identification to an age-old theory. Read More

From Green Users to Green Voters

Does the diffusion of technology affect voting patterns? Technology is usually not aligned with a specific ideology or political party. Indeed, to the extent that technology raises living standards, all parties tend to favor technology diffusion. However, in some cases, voters may associate a political party with a specific technology. Green parties, for example, advocate for the diffusion of green energy technologies and pursue policies that foster the diffusion of green energies. This paper finds a significant effect of photovoltaic (PV) adoption on the increase in the share of votes for Germany's Green Party. In particular, the increase in the diffusion rate of PV systems between 1998 and 2009 led to an increase in the fraction of green votes of 1 percent, which represents 25 percent of the actual increase in the voting rate experienced by the Green Party between 1998 and 2009. Read More

Is Your iPhone Turning You Into a Wimp?

The body posture inherent in operating everyday gadgets affects not only your back, but your behavior. According to a new study by Maarten Bos and Amy Cuddy, operating a relatively large device inspires more assertive behavior than working on a small one. Closed for comment; 20 Comments posted.

If Technology Has Arrived Everywhere, Why Has Income Diverged?

To respond to the question posed in the title of their paper, the authors explore one potential driver—the dynamics of technology adoption. Using a stylized model of adoption that accounts for individual technologies, the authors identify two margins of adoption: adoption lags and penetration rates. Analyzing a panel of adoption lags and penetration rates for 25 technologies and 132 countries, they show that adoption lags have converged across countries over the last 200 years, while penetration rates have diverged. Feeding these patterns into the aggregate representation of their model economy, they next evaluate the effects of cross-country evolution of adoption patterns on the cross-country evolution of income growth. The paper's main finding is that the evolution of adoption patterns accounts for the vast majority of cross-country evolution of income growth for many country groupings. Therefore, adoption dynamics are at the core of cross-country differences in per-capita income over the last 200 years, a phenomenon known as the Great Divergence. Read More

The Spatial Diffusion of Technology

Technology disparities are critical for explaining cross-country differences in per capita income. Despite being non-rival in nature and involving no direct transport costs, technology diffuses slowly both across and within countries. Even when a technology has arrived in a country, it takes years and even decades before it has diffused to the point of having a significant impact on productivity. Why does technology diffuse slowly? How do we explain cross-country differences in its speed of diffusion? In this paper, the authors study the diffusion over time and space of 20 major technologies in 161 countries over the last 140 years. The spatial effects they identify for technologies vanish over time. For most technologies, this implies that the effect of geography is initially strong, decays over time, and eventually disappears. This is the first paper to document these patterns in adoption rates for a large number of technologies and countries. Estimates provided of structural parameters can be used to inform spatial theories of growth. Closed for comment; 0 Comments posted.

The Value of Advice: Evidence from Mobile Phone-Based Agricultural Extension

This paper evaluates a new service that provides mobile-phone based agricultural consulting to poor farmers in India. For decades, the Government of India, like most governments in the developing world, has operated a system of agricultural extension, intended to spread information on new agricultural practices and technologies through a large work force of public extension agents. Evidence of the efficacy of these extension services, however, is limited. This paper describes a randomized field experiment examining the potential for an alternate route to improving agricultural management. Specifically, the authors evaluate Avaaj Otalo (AO), a mobile phone-based technology that allows farmers to call a hotline, ask questions, and receive responses from agricultural scientists and local extension workers. Findings show that AO had a range of important, positive effects on farmer behavior. This paper may be the first rigorous evaluation of mobile phone-based extension and, more generally, the first evaluation of a demand-driven extension service delivered by any means. Read More

Investment Incentives in Proprietary and Open-Source Two-Sided Platforms

While proprietary and open-source software have coexisted since the early days of the computing industry, competition between these two modes of development has intensified dramatically following the surge of the Internet in the mid-1990s. This paper provides a first step to better understand incentives to invest in proprietary and open platforms. Specifically, the authors examine a model of a proprietary and an open-source two-sided platform to study equilibrium investment in platform quality. Their analysis provides answers to three important questions: (1) How are the incentives to invest in platform quality affected by the degree of platform openness? (2) Which of these two modes of governance leads to investment closer to the social optimum? And (3), how are incentives to invest in platform quality moderated by competition between proprietary and open two-sided platforms? Comparing monopoly platforms reveals that for a given level of user and developer adoption, investment incentives are stronger in proprietary platforms. However, open platforms may receive larger investment because they may benefit from wider adoption, which raises the returns to quality investment. The authors also find that proprietary platforms may benefit from higher investment in competing open platforms when developers multi-home, a result that helps explain why a proprietary platform such as Microsoft has chosen to contribute to the development of Linux. Read More

How Technology Adoption Affects Global Economies

In a series of research papers, Associate Professor Diego A. Comin and colleagues investigated the relationship between technology adoption and per capita income. They found that the rate at which nations adopted new tools hundreds of years ago strongly affects whether those nations are rich or poor today. Closed for comment; 11 Comments posted.

Platform Competition Under Partial Belief Advantage

In platform competition in a two-sided market, a platform's ability to attract consumers depends not only on the consumers' beliefs regarding its quality, but also on consumers' beliefs regarding the platform's ability to attract the other side of the market. For example, in the market for smart-phones the recent introductions of Apple's iPhone 4S with the improved operating system, and Samsung's Galaxy II with the improved Android 4, open a new round in the competition between the two platforms. The ability of each platform to attract users depends not only on its perceived quality, but also on users' beliefs regarding the number new applications developed for the platform. Likewise, the ability to attract application developers to the platform depends on their beliefs regarding the number of users that will join the platform. In a competitive market, some platforms may enjoy more favorable beliefs of the market (about their ability to attract ``the other side) than other platforms. Such a belief advantage may be source of a competitive advantage. In this paper, the authors look at how the belief advantage helps the platform to compete in the market, and also how a platform may create the belief advantage. The authors find that the degree of the platform's belief advantage affects its decision regarding its business model (whether to subsidize buyers or sellers), as well as the access fees and the size of the platform. Moreover, the paper looks into the optimal advertising strategy that leads to creating belief advantage. This paper contributes to scholarship on economics and business strategy. Read More

Historical Trajectories and Corporate Competences in Wind Energy

Analyzing developments in the wind turbine business over more than a century, Geoffrey Jones and Loubna Bouamane argue that public policy has been a key variable in the spread of wind energy since the 1980s, but that public policy was more of a problem than a facilitator in the earlier history of the industry. Geography has mattered to some extent, also: Both in the United States and Denmark, the existence of rural areas not supplied by electricity provided the initial stimulus to entrepreneurs and innovators. Building firm-level capabilities has been essential in an industry which has been both technically difficult and vulnerable to policy shifts. Read More

Retailing Revolution: Category Killers on the Brink

Mass-market retailers, particularly big-box "category killers," are under critical pressure from online competitors. For retailers that can react quickly enough, this upheaval is survivable. But those slow to see the tsunami wave on the horizon stand to be swept away, according to professors Rajiv Lal and José B. Alvarez. Closed for comment; 18 Comments posted.

Mobile Banking for the Unbanked

A billion people in developing countries have no need for a savings account–but they do need a financial service that banks compete to provide. The new HBS case Mobile Banking for the Unbanked, written by professor Kash Rangan, is a lesson in understanding the real need of customers. Closed for comment; 27 Comments posted.

Managing the Open Source vs. Proprietary Decision

In their new book, The Comingled Code, HBS professor Josh Lerner and London School of Economics professor Mark Schankerman look at the impact of open source software on economic development. Our book excerpt discusses implications for managers. Open for comment; 2 Comments posted.

The Intensive Margin of Technology Adoption

To anyone who observes the world, it's pretty clear that a country's poverty level is at least somewhat related to its adoption of new technologies. Historically, though, this fact has been difficult to quantify. Harvard Business School professor Diego Comin and MIT researcher Martí Mestieri are developing a model to analyze the relationship between economic growth and technology adoption. In their paper, they discuss both "extensive" margins (the length of time it takes a country to adopt any given new technology) and "intensive" margins (the number of technology units--smartphones, PCs, etc.--that the country adopts). Read More

The Influence of Prior Industry Affiliation on Framing in Nascent Industries: The Evolution of Digital Cameras

Firms entering a new product market face tremendous ambiguity and competitive uncertainty, particularly when the new market is sparked by radical technological change. Potential customers have little or no experience with products, and during this period of turbulence, firms experiment with alternative product configurations, functions, and technologies. By studying the emergence of the consumer mass market for digital cameras, Carlson School of Management professor Mary J. Benner and HBS professor Mary Tripsas explore what factors influence a firm's initial introduction of product features during the nascent stage of a product market, and how the process of convergence on a standard set of features unfolds. In particular, they assess how a firm's prior industry affiliation influences its conceptualization of the product. Read More

Mixed Source

As most managers know, commercial firms may benefit from participating in open source software development by selling complementary goods or services. Open source has the potential to improve value creation because it benefits from the efforts of a large community of developers. Proprietary software, on the other hand, results in superior value capture because the intellectual property remains under the control of the original developer. While the straightforward rationale for "mixed source" (a combination of the two) is appealing, what does it mean for a business model? Under what circumstances should a profit-maximizing firm adopt a mixed source business model? How should firms respond to competitors' adoption of mixed source business models? And what are the right pricing structures under mixed source compared with the proprietary business model? In this paper the researchers analyze a model where firms with modular software must decide which modules to open and which to keep proprietary. Findings can be directly applied to the design of optimal business strategies. Read More

File-Sharing and Copyright

The researchers argue that file-sharing technology has not undermined the incentives of artists and entertainment companies to create, market, and distribute new works. The advent of new technology has allowed consumers to copy music, books, video games, and other protected works on an unprecedented scale at minimal cost. Such technology has considerably weakened copyright protection, first of music and software and increasingly of movies, video games, and books. While policy discussion surrounding file-sharing has largely focused on the legality of the new technology and the question of whether declining sales in music are due to file-sharing, the debate has been overly narrow. Copyright protection exists to encourage innovation and the creation of new works—in other words, to promote social welfare. This essay analyzes the landscape and identifies areas for more research. Read More

The Unseen Link Between Savings and National Growth

Professor Diego Comin and fellow researchers find a little observed link between private savings and country growth. The work may offer a simple interpretation for the East Asia "miracle" and for failures in Latin America. Q&A. Read More

Testing a Purportedly More Learnable Auction Mechanism

Each year, auctions are used to determine how billions of dollars of goods and services will be allocated across the globe. On eBay alone, $52.5 billion in merchandise was exchanged in 2.4 billion auctions conducted during fiscal year 2006. Considerable attention has been paid in the academic literature to the question of how to design auctions with efficient allocation and revenue-maximizing properties. However, in part because auction rules are typically published and standard theory assumes economic agents are capable of computing optimal strategies from published rules, little attention has been paid to the question of how to design auctions whose optimal strategies are easy to learn. Evidence suggests that even when auction rules are published and dominant strategies exist, people nonetheless struggle and sometimes fail to learn to play their optimal strategy. As a result, the authors argue that the question of how to design a learnable, strategy-proof auction mechanism is an important one. Read More

One Laptop per Child

The One Laptop per Child initiative wants to develop and distribute $100 laptops to poor children around the world. Despite eager observers and exciting breakthroughs technologically, it has found the path to customers more rocky than anticipated. Marketing has some answers, as a new case study details. Q&A with HBS professor John Quelch. Read More

Digital Interactivity: Unanticipated Consequences for Markets, Marketing, and Consumers

For digital marketing practice and theory, the last decade has brought two related surprises: the rise of social media and the rise of search media. Marketing has struggled to find its place on these new communication pathways. Old paradigms have been slow to die. This paper reviews early beliefs about interactive marketing, then identifies 5 discrete roles for interactive technology in contemporary life and 5 ways that firms respond. It concludes that the new media are rewarding more participatory, more sincere, and less directive marketing styles than the old broadcast media rewarded. Read More

HBS Cases: How Wikipedia Works (or Doesn’t)

For HBS professor Andrew McAfee, Wikipedia is a surprisingly high-quality product. But when his concept of "Enterprise 2.0" turned up on the online encyclopedia one day—and was recommended for deletion—McAfee and colleague Karim R. Lakhani knew they had the makings of an insightful case study on collaboration and governance in the digital world. Read More

Delivering the Digital Goods: iTunes vs. Peer-to-Peer

Apple's iTunes music download service and illegal peer-to-peer music downloads offer two contrasting approaches to delivering digital content to users. Can Apple and the recording industry seriously compete against free? Do iTunes and p2p help each other in some ways? Professor Ramon Casadesus-Masanell and collaborator Andres Hervas-Drane discuss their recent research on competition in digital distribution. Read More

The Immigrant Technologist: Studying Technology Transfer with China

Immigrants account for almost half of Ph.D.-level scientists and engineers in the U.S., and are prime drivers of technology development. Increasingly, however, Chinese technologists and entrepreneurs are returning home rather than staying in the U.S. to pursue opportunities. Professor William Kerr discusses the phenomena of technology transfer and implications for U.S.-based businesses and policymakers. From New Business. Read More

How Software Platforms Revolutionize Business

Cell phones, the Game Boy, and PCs are examples of products based upon software platforms—ecosystems where independent companies can provide products and services tied to the core technology. Playing in a software platform world can make you rich—ask ringtone creators—but it also demands special management skills that emphasize cooperation over competition. Professor Andrei Hagiu discusses his new book, Invisible Engines. Read More

Developing a Strategy for Digital Convergence

Technology was getting dull earlier this decade, says David Yoffie. But the sudden arrival of digital convergence has turned the tech world upside down. What are the right bets to place? Read More

Lessons from the Browser Wars

The first-mover advantage is well chronicled, but it didn't help Netscape when Microsoft launched Internet Explorer. What drives technology adoption, and do browser upstarts such as Firefox stand a chance? A Q&A with professor Pai-Ling Yin. Read More

From Turf Wars to Learning Curves: How Hospitals Adopt New Technology

Turf wars and learning curves influence how new technology is adopted in hospitals. HBS professors Gary Pisano and Robert Huckman discuss the implications of their research for your organization. Read More

Microsoft vs. Open Source: Who Will Win?

Using formal economic modelling, professors Pankaj Ghemawat and Ramon Casadesus-Masanell consider the competitive dynamics of the software wars between Microsoft and open source. Read our interview. Read More

The World in Your Palm?

Cell phones are cameras, too. Music players are photo albums, too. PDAs browse the Internet, too. A Cyberposium panel looks at the limits of convergence. Read More

Radical Change, Entrepreneurial Opportunity

A key to exploiting radical technological change is to clear your vision of historical constraints and see new opportunities with a fresh perspective. Michael J. Roberts interviews HBS professor Mary Tripsas. Read More

Alfred Chandler on the Electronic Century

Pulitzer Prize-winning historian Alfred D. Chandler Jr. examines the development of two pivotal industries in post-World War II America—the consumer electronics and computer industries. Read More

Digital Designs on the Inner City

Bridging the digital divide, at least in inner cities, requires a lot more than computer power — although more computers would certainly be nice. According to business and political leaders who focus their efforts on empowering residents of urban areas, access is only one rung on the ladder. Stated one Harlem entrepreneur, "It's more so about attitude." And attitudes, panelists noted, can be shaped by exposure to the wonders of technology. Read More

Cable TV: From Community Antennas to Wired Cities

The cable television industry has long outgrown its roots as a source of better TV reception to achieve its present place as a key player in the emerging telecommunications infrastructure. That change, writes HBS Professor Thomas R. Eisenmann in Business History Review, amid different managerial respondes to the twin—and sometimes competing—objectives of stabilty and growth. In this excerpt, Eisenmann looks at the formative years of the industry, from 1948 to 1975. Read More