Innovation Apr 13, 2017

How Tight-knit and Indi­vid­u­al­is­tic Com­mu­ni­ties Adopt New Tech­nolo­gies Differently

Inno­va­tions from fax machines to What­sApp spread faster in some soci­eties than others.

Nate Otto

Based on the research of

Bryony Reich

At a restau­rant with friends five years ago, Bry­ony Reich described a new mes­sag­ing app called What­sApp. It was encrypt­ed, allowed inter­na­tion­al chat­ting, and best of all, it was free. Every­one in the group down­loaded What­sApp, and they have been mes­sag­ing on it ever since. 

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The expe­ri­ence got Reich, now an assis­tant pro­fes­sor of strat­e­gy at the Kel­logg School, 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? 

The pre­vail­ing the­o­ry had been that tight­ly knit groups served as a bar­ri­er to adop­tion and pre­vent­ed a technology’s spread. That’s because, with few­er loose ties beyond one’s own group, there are few­er oppor­tu­ni­ties for tech­nol­o­gy to spread from out­side to inside a social cir­cle. But this the­o­ry did not take into account the fact that peo­ple can make deci­sions col­lec­tive­ly and adopt cer­tain tech­nolo­gies at the same time — a fac­tor that could help an inno­va­tion dif­fuse through the group. 

Our mod­els of how social struc­ture influ­ences dif­fu­sion should also cap­ture the idea that peo­ple talk and make joint deci­sions,” she says. 

What did she find when she adjust­ed the mod­els to take this col­lec­tive deci­sion-mak­ing into account? Social struc­ture real­ly mat­ters,” Reich says. 

Pieces of the Puz­zle

Specif­i­cal­ly, Reich found that the type of tech­nol­o­gy being intro­duced is the main fac­tor in whether an inno­va­tion does or does not spread through a close-knit community. 

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, she found. These are inno­va­tions that are valu­able even with­out a large num­ber of adopters, such as com­put­ers or agri­cul­tur­al innovations. 

Get­ting joint adop­tion can be a way to kick start the process.” 

But for high­er-thresh­old tech­nolo­gies, soci­eties with more tight­ly knit groups have the edge. A tech­nol­o­gy like What­sApp, for exam­ple, requires a crit­i­cal mass of peo­ple in order to pro­vide a ben­e­fit. In Mex­i­co, which con­sists of high­ly cohe­sive com­mu­ni­ties, 78 per­cent of the pop­u­la­tion used instant-mes­sag­ing apps in 2013. This com­pares to just 23 per­cent of the U.S. pop­u­la­tion, which is ranked as one of the most indi­vid­u­al­is­tic societies. 

The fax machine pro­vides anoth­er exam­ple. The device was invent­ed in the Unit­ed States, but did not catch on right away. It did, how­ev­er, take off in the 1980s in Japan, the most cohe­sive soci­ety in the world. After the fax machine’s wide­spread adop­tion by Japan­ese busi­ness­men and home­own­ers, West­ern soci­eties embraced it. 

So, despite the pre­vail­ing wis­dom, coun­tries with loos­er knit struc­tures are not adopt­ing all tech­nolo­gies to a greater extent,” Reich says. It’s just that they are doing so for the cat­e­go­ry of low-thresh­old technologies. 

Match­ing Mar­kets with Tech­nolo­gies

Reich says her mod­el gives us a sense of why a giv­en inno­va­tion or prod­uct may spread more eas­i­ly in some soci­eties ver­sus others. 

Com­pa­nies that want to break into a new mar­ket could ben­e­fit from this infor­ma­tion, Reich says. They would know where a par­tic­u­lar inno­va­tion is more like­ly to suc­ceed and what incen­tives could help tip the balance. 

Cell-phone com­pa­nies in the Unit­ed King­dom incen­tivized users to col­lec­tive­ly adopt their high-thresh­old tech­nol­o­gy by offer­ing low­er fees for calls between cus­tomers with the same car­ri­er. Fam­i­ly-and-friends phone plans work in a sim­i­lar way. 

This knowl­edge can help in the pub­lic-health are­na, too. 

In India, for exam­ple, many peo­ple go to the bath­room out­doors instead of using indoor toi­lets con­nect­ed to san­i­tary sew­ers. Flies that land on excre­ment can car­ry germs inside, infect­ing peo­ple with dead­ly dis­eases. Get­ting a small num­ber of peo­ple to use indoor toi­lets would not do much to improve health. In order to get the full ben­e­fit of a sewage sys­tem, many in the com­mu­ni­ty would need to adopt the inno­va­tion, mak­ing it poten­tial­ly a high-thresh­old innovation. 

If that is the case, the gov­ern­ment might want to tar­get the more rur­al, close-knit com­mu­ni­ties and orga­nize work­shops explain­ing an indoor san­i­ta­tion system’s ben­e­fits, encour­ag­ing peo­ple who live there to adopt the tech­nol­o­gy all at once. Bring­ing peo­ple togeth­er to dis­cuss an inno­va­tion could help, Reich says. 

Get­ting joint adop­tion can be a way to kick start the process,” she says. 

As a result of the research, com­pa­nies and gov­ern­ments might be able to antic­i­pate that some places with cer­tain types of net­work struc­tures will become the tech­no­log­i­cal fron­tier for spe­cif­ic types of inno­va­tions. And that’s impor­tant, says Reich, because adop­tion of new tech­nolo­gies — bet­ter ways of doing things — is real­ly fun­da­men­tal to growth and devel­op­ment, and impor­tant to explain­ing dif­fer­ences in income across countries.” 

Featured Faculty

Bryony Reich

Assistant Professor of Strategy

About the Writer

Susan Cosier is a freelance writer and editor in Chicago, Illinois.

About the Research

Reich, Bryony. 2016. “The Diffusion of Innovations in Social Networks.” Working paper.

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