Technology adoptionNo. 008
The economics of technology adoption
A better technology does not sell itself. Whether people and firms adopt it depends on cost, risk, information, networks and the complementary changes it demands.
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In brief
- Adoption is an investment decision: people adopt when the expected gain exceeds the cost, the risk and the value of waiting.
- Many apparent refusals are rational. Returns differ between users, and the technology may suit some far better than others.
- Five forces shape adoption: information, network effects, complementary investment, finance and behavioural frictions.
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