Technology Diffusion Beyond Rogers’ Model: The role of purpose and affordability across customer segments

Why were the military the first customers for many great technology inventions at the early stage of their lifecycles? Why did it take so long for individuals to be customers of many great inventions like computers, mobile phones, and hard disk drives? To shed answers on such questions, should we look into technology diffusion beyond Rogers’ model? Unlike seed, technology diffusion largely depends on varying fitness to purpose, economic reward, and affordability of different customer groups.

The diffusion of technology has long been a topic of study, often explained by theories like Rogers’ Diffusion of Innovations model. According to Rogers, the adoption of technology is influenced by factors such as perceived risk, risk management abilities of users, and communication channels. However, a historical review of major technological advancements like airplanes, computers, mobile phones, and the internet suggests that adoption is less about these factors and more about the sequential evolution of fitness for purpose and cost reduction. In other words, these technologies progress through different customer groups—starting with the military and large corporations and moving towards smaller enterprises and individual consumers—due to their increasing Utility and affordability.

This article, Technology Diffusion Beyond Rogers’ Model, explores the sequential pattern of technology diffusion, which reflects the ability of Innovation to evolve to serve diverse markets, thereby expanding its adoption potential and overall impact.

1. Technology Diffusion Beyond Rogers’ Model

In Rogers’ model, innovation diffusion depends on communication channels, social systems, and adopters’ perceptions. The model segments adopters into groups such as innovators, early adopters, early majority, late majority, and laggards. However, this approach primarily fits consumer-oriented innovations with minor incremental updates. For disruptive, complex technologies like computers or airplanes, the adoption trajectory deviates significantly. In these cases, technology readiness, utility for specific use cases, and affordability are the driving forces. Instead of individual perceptions, broader institutional adoption sequences are more influential.

For example, the internet started as a military communication tool in the United States Department of Defense, known as ARPANET. Its utility expanded to research institutions and universities before commercial applications emerged. Only after its widespread adoption by corporations and businesses did it reach mainstream civilian use. The same sequence applies to computers, which transitioned from military and governmental applications to large corporations, medium-sized businesses, small enterprises, and finally individual users.

2. Sequential Adoption Through Diverse Customer Groups

Historically, major technologies like airplanes, data storage, mobile phones, and the internet followed a predictable sequence of adoption. Each new group adopts a technology when it reaches a level of fitness for purpose that meets their unique requirements and when cost reductions make it economically viable for them.

1. Military and Government: Advanced technologies often begin with high-cost, specialized military or government use due to both strategic need and resources available to fund early, costly versions. The military’s demand for cutting-edge advancements in mobile communication, storage, and computing has spurred early developments in these fields.
2. Large Corporations: As the technology matures, large corporations adopt it to gain efficiency and competitive advantage. These organizations can handle the high costs associated with early-stage technologies and benefit significantly from their unique capabilities.
3. Medium-Sized Corporations: As the cost of technology declines, it becomes more accessible to medium-sized enterprises. These organizations, though not as resource-rich as large corporations, see value in operational efficiency and productivity gains enabled by the technology.
4. Small and Micro Enterprises: At this stage, technology prices have generally decreased significantly. Small businesses, which typically operate on lean budgets, adopt the technology to enhance service delivery and reach new customers.
5. Individual Consumers: Finally, when the technology achieves maximum affordability and usability, it becomes accessible to the general public. At this stage, the product is typically easy to use, reliable, and affordable for individual consumers.

This sequential adoption is not based on communication or perceived risk; rather, it reflects a trajectory where technological adaptation and cost-reduction efforts expand the market.

3. The Role of Cost Reduction in Expanding Adoption

One of the most significant drivers in technology diffusion is cost reduction. As production processes improve and Economies of Scale are achieved, prices decline, allowing broader market access. For example:

• Airplanes: Initially, airplanes were reserved for military and high-stakes government use due to their prohibitive costs of flying a person per kilometer, poor safety and limited utility. However, as costs dropped and safety improved, they became accessible to commercial airlines and eventually individuals through air travel services.
• Computers: The initial mainframe computers were used almost exclusively by governments and large corporations due to their size and cost. With the advent of personal computing, costs decreased, and the technology evolved to become accessible to small businesses and eventually the mass market.
• Mobile Phones: Mobile phones followed a similar trajectory. Initially used by the military in war field. Subsequently, busy professionals of large organizations started using. Further,  cost reductions and technological advancements made them accessible to almost everyone, leading to rapid diffusion and a massive consumer base worldwide.

This pattern shows that affordability and fitness to purpose rather than perceived risk or communication channels is often the deciding factor for broader technology adoption.

4. Incremental Fitness for Purpose and Widening Technology Utility

The ability of technology to evolve and meet the needs of diverse customer segments over time is another critical factor in its adoption journey. Technologies like the digital camera, hard disks, and mobile phones improved in capacity, size, and efficiency over time, making them viable for new applications.

For example, digital storage evolved from large, clunky hard disks to compact, high-capacity flash drives and ultimately cloud storage solutions. Initially suited for only large-scale data storage in institutional settings, advances in storage technology made it applicable for personal data storage, mobile devices, and cloud computing. With each incremental improvement, the technology became more aligned with the specific needs of a broader range of users, from large corporations to individual consumers.

This trajectory reveals that the fitness for purpose of technology is closely tied to its adoption lifecycle. As each customer group finds the technology more suitable for its purposes, adoption spreads accordingly.

5. Conclusion: Towards a New Model of Technology Diffusion

This review of historical technological advancements suggests that the traditional Rogers model may not fully capture the adoption dynamics of transformative technologies. For technologies with high complexity and initial cost, the sequential adoption model—from military and large institutions to individual consumers—reflects how utility, cost reduction, and fitness for purpose are the primary drivers.

Therefore, successful innovation requires focusing on both advancing the technology’s fitness for purpose to meet new market needs and reducing costs to expand its accessibility. By aligning with the needs of each customer group, innovators can navigate the path from niche to mass-market adoption more effectively.

In today’s world of rapid innovation, understanding this pattern offers valuable insights into designing adoption strategies for emerging technologies like artificial intelligence, electric vehicles, and renewable energy solutions. The adoption of these technologies is likely to follow a similar sequence, where fitness and affordability drive their transition from specialized applications to broad consumer use.

Key Takeaways

Here are five key takeaways from the essay:

1. Sequential Diffusion Pattern: Major technologies like computers, airplanes, and mobile phones often follow a sequence of adoption across customer groups—from military and government to large corporations, SMEs, and finally individual consumers—due to increasing fitness for purpose and cost reductions over time.
2. Cost Reduction as a Driver: Unlike traditional models focusing on perceived risk, technology adoption is largely driven by continuous cost reduction, making high-cost technologies affordable and accessible for broader markets.
3. Incremental Fitness for Purpose: The adaptation of technology to serve different customer needs over time is a crucial aspect of its diffusion, with innovations evolving to match specific requirements for utility and performance across various market segments.
4. Rogers’ Diffusion Model Limitations: Rogers’ model, emphasizing factors like risk perception, may not fully capture the adoption patterns of complex technologies, which instead align more closely with purpose and cost-driven sequences of adoption.
5. Implications for Innovation Strategy: Innovators can leverage this sequential model by improving technology fitness for diverse user needs while reducing production costs, ensuring broader market reach and long-term success in mass adoption.

These takeaways highlight a framework for understanding how high-impact technologies evolve from niche applications to universal use.

Research Questions

Here are five research questions based on the essay:

1. What factors contribute to the sequential adoption of technology across distinct customer groups, and how does this differ from Rogers’ diffusion model?
2. How does the progression of technology from military and governmental use to broader consumer adoption impact the evolution and design of the technology itself?
3. To what extent does cost reduction influence technology diffusion compared to factors like risk perception and risk management capacity?
4. How can technology providers enhance the fitness-for-purpose of innovations to meet the unique needs of different market segments sequentially?
5. What role does incremental improvement in functionality play in making advanced technologies accessible to a broader audience, and how can this influence future innovation strategies?

These questions aim to explore the alternative model of technology diffusion, focusing on cost reduction, fitness for purpose, and the role of sequential adoption across customer segments.