Wave Theory of Innovation diffusion attempts to capture the wavelets of diffusion, caused by the release of successive better versions, subsequently, forming a mega wave. Incremental innovation, leveraging the advancement of the underlying technology core and complementary ones, adds and enhances features for releasing successive better versions. However, this journey of releasing better versions for diffusing the innovation further slows down due to the maturity of the technology core. The subsequent change of technology core leads to the formation of the next mega wave, diffusing the innovation further deeper.
Technology invention leads to ideas for innovations to get our job done better. However, technology innovations do not instantly diffuse to target customers. Moreover, they do not linearly diffuse either. They begin the journey in slow space. Subsequently, momentum grow-ups, followed by slowing down. It seems that innovations diffuse as waves. Moreover, incremental innovations lead to subsequent better versions. Each better version forms a new wavelet. A collection of these wavelets forms a mega wave of diffusion of each innovation. However, the maturity of the technology core leads to weakening the mega wave too. The subsequent change of technology core leads to the formation of another mega wave. Hence, the wave theory of innovation diffusion appears to make sense.
An innovation diffusion wave is a collection of wavelets—the core of the wave theory of innovation diffusion
Once an innovative product is released, all customers who find them relevant do not adopt them all of a sudden. Market research often models the diffusion pattern as a bell-shaped curve with major customer segments like innovators, early adopters, early majority, late majority, and laggards. For the early version, only innovators will adopt them. However, the adoption pattern among them is neither a spike nor a linear line. Instead, it’s a wavelet. On the other hand, remaining customers like early adopters will not likely buy this initial version. Several barriers keep limiting diffusion. Some of them are perceived value, infrastructure, price, Externality Effect, compatibility, and many more.
To make the innovation appealing, innovators add new features and improve existing ones. Subsequently, an improved version is released, making it better—and also preferably cheaper. The adoption pattern will also form a wavelet. The response of the competition also has an effect on the nature of the diffusion of the innovation. Due to the release of replication, imitation, and innovation, willingness to pay for innovation is a function of time. Hence, innovators keep releasing successive better versions. If those better versions are strong enough to sustain the competition response and leverage the externality effects, diffusion of successive better versions will keep progressing as a series of wavelets.
Wavelet form of innovation diffusion pattern of successive better version gives the impression that innovations behave like seasonal crops in the market. In addition to the advancement of core technology, complementary technologies also play a vital role in incremental innovation for releasing successive better versions. However, in time, core technology matures, and the growth trend of subsequent better versions slows down. Consequently, the unfolding of a series of wavelets of diffusion forms a history of mega wave of innovation diffusion.
Formation of mega wave as a series of wavelets
Innovations diffuse like seasonal crops–an example from iPhone
Even a magical innovation like iPhone is neither diffused as a spike nor in a linear fashion. Its mega wave of diffusion has been unveiling as a collection of wavelets. Within just one year of release, the sale of the first iPhone came down to zero. To let the innovation keep diffusing deeper, Apple has been releasing successive better versions. The diffusion of each version is forming a wavelet of a mega wave.
Change of technology core-forming new mega wave of innovation diffusion
Due to the maturity of technology core, invariably, incremental advancement steps start getting smaller. Innovation around the current technology core faces the limit about how far it can penetrate in society. For example, after having 100 years-long journeys, the film-based camera started showing such maturity in the 1970s. Similarly, vacuumed tube-based radios and TVs started showing similar maturity in the 1950s.
To overcome the limitation of the maturity of technology core, innovators take a radical step. They change the technology core to start a new wave. However, substitution around new technology core emerges in primitive form. Initially, they fail to penetrate the major market segments of incumbent products, produced around the mature technology core. Instead, emerging substitution starts diffusing in market segments in which innovation around mature technology core could not penetrate. Prof. Clayton termed it as a non-consumption market segment. However, once those substitutions reach the inflection point, diffusion of matured technology product start rapidly falling, reaching zero. Consequentially, the new wave keeps growing. Invariably, the emerging mega wave creates a larger market than ever before. The subsequent wavelets of this new mega wave keep penetrating deeper in the market. Hence, such characteristics of innovation form the wave theory of innovation diffusion.
Spreading of the camera and other examples validating wave theory of innovation diffusion
The invention of the technology recording an optical image on film and producing its print on paper led to camera innovation. The initial camera was very primitive. Only a few innovator category customers adopted it. As usual, incremental innovation kept releasing a subsequent better version, at decreasing cost. This led to the formation of a mega wave as a collection of wavelets of the camera’s diffusion. By the 1970s, film-based imaging technology matured. To overcome this limitation, Sony embarked on the journey of changing the film technology core with electronic image sensors.
However, the initial emergence of the digital camera was primitive. The subsequent release of better versions led to the formation of a follow-up mega wave. However, the adoption of digital cameras and the subsequent release of better versions has led to the formation of an extremely large mega wave. This mega wave of the smartphone camera has reached every corner of the world.
Some other notable examples are computer printers, computer storage, photocopier, and music players. The duration of wavelets is small, lasting over a couple of months to a year. However, the duration of a mega wave is very large. It may expand from 20 to 100 years. For example, for light bulb innovation, filament technology powered the first mega wave of a light bulb over more than 60 years. On the other hand, the mega wave of the standalone digital camera lasted for less than 25 years, before the mega wave of smartphone cameras took over.
Wave theory of innovation diffusion sheds light on interpreting and predicting the reality
This wave theory of innovation plays an important role in explaining the innovation diffusion being shaped by technology advancement and also the competition. The introduction of wavelets takes into consideration of the release of subsequent better versions. Most importantly, it covers the formation and growth of successive waves due to the change of technology cores. Hopefully, it will bring greater clarity in the magical journey of diffusion of innovation for systematically ferreting out value.
