At a restaurant with friends five years ago, Bryony Reich described a new messaging app called WhatsApp, which provided free international chatting. Everyone in the group downloaded WhatsApp, and they have been messaging on it ever since.
The experience got Reich, now an assistant professor of strategy at Kellogg, thinking about how innovation spreads through societies. Are tight-knit groups—like her circle of friends at the restaurant—better or worse at spreading a new technology?
Reich modeled the adoption process, considering how a wide range of innovations—from fax machines to malaria nets—is used through different types of communities.
What did she find? “Social structure really matters,” Reich says.
Sometimes tight-knit groups have an advantage; other times, they are actually at a disadvantage. The difference comes down to the type of technology being spread. Is it a “low threshold” technology that is valuable even without a large number of adopters, such as computers or agricultural innovations, or is it “high threshold,” like a messaging app, which needs lots of adopters at once?
Reich found that societies, countries, communities, and friend groups—collectively known as network structures—that are more individualistic and loosely connected are better at adopting low-threshold technologies.
But for higher-threshold technologies, more cohesive groups have the edge. Communication technologies such as WhatsApp, for example, require a critical mass of people to provide a benefit. In Mexico, which consists of highly cohesive communities, 78 percent of the population used instant messaging apps in 2013 compared with just 23 percent of the U.S. population, which is ranked as one of the most individualistic societies.
Reich’s model can help explain why a given innovation or product may spread more easily in some societies versus others. Though the fax machine was invented in the United States, for instance, it did not catch on here until after it was embraced in Japan, one of the developed world’s most cohesive societies.
“The model gives us some sense of what’s going on,” says Reich.
Companies that want to break into a new market could benefit from this information, says Reich. They would know where a particular innovation is likely to succeed and what incentives could help tip the balance. For example, in the United Kingdom, cell phone companies that charged lower fees for calls between customers with the same carrier may have enticed groups to collectively adopt their technology. Family-and-friends phone plans work in a similar way, says Reich.
So instead of just considering how a technology spreads from one person to another, Reich says, “we can now say more about the bigger picture.”