Forecasting Technology

Running head: FORECASTING TECHNOLOGY

Abstract

This paper is one that will be driven upon providing an answer to two separate questions. The first question is What factors influence the adoption and diffusion of innovations? This question will be answered by describing the five steps that are part of the adoption process and end with the description of those factors that might lead to diffusion. The second question is What methods of forecasting technology and markets are available, and what are their relative advantages and disadvantages. Again the author will attempt to answer all elements of the question in a detailed manner.

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FORECASTING TECHNOLOGY

What factors influence the adoption and diffusion of innovations? Adoption and diffusion theories have long been researched and discussed. There have been many different theories as to which researcher provides the best description for this, however, "the most widely cited and most influential researcher in the area of adoption and diffusion is Everett Rogers" (Surry & Ely, P.1). The adoption and diffusion of an innovation is comprised of five stages. "The first stage is knowledge, in which potential adopters find out about an innovation and gain a basic understanding of what it is and how it works" (Surry & Ely, P.1.). "The second stage is persuasion in which potential adopters for a positive or negative impression of the innovation. It is only in the third stage, "Decision", that the innovation is actually adopted or rejected. The fourth stage, "Implementation", occurs when the innovation is actually used. In the fifth stage, "Confirmation", the adopter seeks information about the innovation and either continues or discontinues use of the innovation. The Confirmation Stage might also describe the adoption of an innovation that was previously rejected" (Surry & Ely, P.1). The diffusion of innovation refers to the tendency of new products, practices, or ideas to spread among people" (Perner, P.1). Through research for this paper it was discovered that there are several factors that influence the diffusion of an innovation. Some of these include, but are not limited to: speed with which an innovation spreads, price, extent of switching difficulties, modernity, homophily, physical distance and opinion leadership (Perner, P.1).

What methods of forecasting technology and markets are available, and what are their relative advantages and disadvantages? There are many different methods of forecasting