Innovation Adoption And Diffusion Commerce Essay


Change can go terribly wrong, failed innovations have a history of causing a lot of money and time to be wasted. In the last few years just over £ 1.2 bn was spent on a computer scheme for the NHS that failed to be implemented to completion. (Martin, 2011 #421) Therefore it is important to study the barriers to adoption and diffusion of new technology, before implementing. This essay will try to address these barriers from a industrial perspective, being medical device, health care and pharmaceutical companies. This industry needs to innovate to be competitive in today's market. Therefore, these barriers should be studied and overcome to help companies maximize profits and improve cost-efficiency. Maximization of profits infers the increase of revenues from either increasing market share, retaining patients or increasing prices. However as prices are heavily regulated in this industry, the main perspective discussed is to maximize adoption and implementation of the new innovation.

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New technological innovations can be products and services new to the market or company in which they operate, made distinct by either soft technology (how artifacts work) or hard technology (tangible artifacts). (Cooper, 2001 #416)By being a product, service or process, innovation in the healthcare industry can range from a new drug entity (NDE), to method of drug delivery to a price reimbursement scheme. While the life science and biotechnology industry is rapidly expanding, the implementation of it is a different scenario. Although Individual resistance to innovation is nothing new, and traditionally less research has been conducted on collective adoption by whole organization; this essay attempts to factor in the healthcare industry sector, by showing methods of to overcome barriers of imposed by the innovation following the framework described in Section X. An industry view of this process would be how to overcome the barriers, ensure commercial success and then allow for longevity. Through exploiting the 'tail-end' of the S- curve of innovation (Figure 1) , by maximizing profit during the end phases of the innovation. For example companies with patents ending will try to find innovative solutions to retain patients. (Leyland , 2012)

Figure . S-curve of innovation- the cumulative distribution of adopters over time. Adapted from Greenhalgh, 2005


Adopters (cumulatively)

Lag phase

Take off

Saturation Point

Additionally, medicine and health data must be evidence-based, therefore implementation of new innovations are generally not as favorably looked upon. (Ferlie et al., 2005) Particularly if the evidence is ambiguous, the diffusion and adoption can be difficult. For larger organizations, adoption is more complex due to the sheer number of players involved, and the barriers to overcome the resistance is more costly and timely. The relationships within players are also complicated and not necessarily correlated, for example actions that regulators take affect patients, who may not understand the severity of the issue since costs are covered by payers not them, decision makers are less affected by the choices they make. As the medical and healthcare industry evolves, it become apparent that adoption and diffusion must occur between all players involved; the end-users themselves; the prescribers and healthcare practitioners; the payers and health organization regulators; and the socio-political context.(Fleuren et al., 2004)

Determinants of Innovation

Six interfaces determine the innovation (Figure 2), affecting healthcare as seen in a Harvard business review written by R. Herzlinger (2002) ; regulations; accountability; technology; payers; practioners; and patients. A combination or a single one of these factors can act as a barrier to innovation or to help innovation.(Herzlinger, 2002) These factors play a role in each progression as later illustrated in Figure 3, in dissemination, adoption, implementation and continuation. The factors must be compatible to allow the innovation to be a success. Additionally, the wider context is just as important with politics and power play, as dominance of medical professions play a large role in adoption and diffusion, regardless if the innovation is a single simple artifact, or a more complex process or delivery.

Figure : The six forces that affect innovation that can help or hinder the process of adoption, implementation and diffusion. Adapted from Herzlinger, 2006

Regulation of healthcare is stringent to avoid human damage, which can aid innovation or hinder it.

Generation of revenue and processing of funds are different to other industries.

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With medical information readily available, customers can make informed decisions that may or may not be approved by their physician.

The technological foundation for innovation to improve health care delivery.

Demand and expectation that any released technology is safe and effective for human use.

Different stakeholders with separate agendas, interests and varying resources and power to influence public opinion. I.e. Hospital Managers and Doctors

These six factors of innovation are part of the innovation progression that when subjected to the innovation characteristics and the corresponding barriers of adoption, illustrates the framework in Figure 2. This framework maps the process of innovation, the following section will demonstrate examples of these barriers and how to overcome them to achieve a successful innovation process.


To discuss why healthcare organizations resist adopting new innovations, a framework developed from Fleuren et. al.'s (2004) literature review was used to represent the different determinants and hence those barriers resulting in the resistance of adoption. The barriers arise due to numerous factors, which correspond to the different determinants of adoption.(Figure 3) This essay looks to view the resistance of adoption from an industry perspective and how to overcome these barriers to market and successfully diffuse the innovation. The barriers address the usage pathway of the innovation, the end-user, the organization and the socio-political context as illustrated in Figure 1. In response, the industry needs to explore different options such as specifically marketing or strategic move to implement the innovation process.

At the interface of each stakeholder, there may be problems with adoption and diffusion of innovation that the industry may choose to address. Following the framework in Figure 3, innovation characteristics can be broken down into, innovation; the effect of the market, the characteristic of the end user; referring to individual patients or practioners and compliance, larger bodies of regulators; organization adoption and successful diffusion into society and social and political context; where the innovation must also be inline with current trends an political stands.

Figure : Framework representing the innovation process (right) and Innovation determinants or barriers (left) , Adapted from Fleuren et al. (2004)

Innovation Progression

Innovation determinants

Characteristics of the innovation

Characteristics of the end user

Characteristics of the organization

Characteristics of the Socio-political background





Characteristics of the Innovation:

1. Dissemination

The technology in itself must be compliant with the 6 interfaces of healthcare as previously mentioned, to be able to undergo the innovation progression. To allow for propagation, the innovation should be easy to use but also be technologically easy to implement, that there should be facilities to allow the innovation to be used. The technological product-related feature of the innovation can initiate the resistance in itself, such as the size of the product or sensitivity to noise. (Da Cunha, 2010) To prevent this from happening, Medtronic expanded into a new market of heart defibrillators by working closely with the surgeons who would be implanting them. This helped to identify the technical problems and to align the innovation with opinion leaders, to initiate the dissemination.(Herzlinger, 2002)

2. Adoption and Implementation

In the next phase of adoption and implementation, the innovative technology may infringe on certain stakeholders, causing a backlash. Resistance from stakeholders can be triggered by the perceived threat of loss of power, authority or a reorganization of work.(Bhattacherjee and Hikmet, 2007) An example, is the perceived reduction in the role of surgeons in 'MIS', minimally invasive surgery, leaning more on technicians in this procedure causing an attempt by surgeons to refute the method in the New England Journal of Medicine.(Herzlinger, 2002) To avoid confrontation between stakeholders, innovations should not only be designed with intent of enabling adoption but also to minimize the resistance.(Bhattacherjee and Hikmet, 2007) By understanding legislation or stake holder relationships, companies can and work around these barriers to implement the innovation. An example is the MinuteClinics set up in Minneapolis, where traditional physicians were not antagonized or threatened due to the nurse based care.(Herzlinger, 2002)

3. Continuation

To ensure continuation of the innovation as seen in Figure 3, companies can choose to either use a competitive edge to stand out among the crowd ( such as the addition of an augmented product), or to emphasize brand loyalty. (Kotler, 2008 #115) The problem of continuation is particularly important in the medical industry due to the expiration of patents and influx of generics, forcing companies to find innovative ways to push their product. An example is that after the FDA approval of Over The Counter HIV test by OraSure, Gilead Sciences ( a major player in the HIV market) released statements and received approval for an HIV drug to be marketed as preventative medication. (, 2012 #418;, 2012 #419) The drug was previously marketed as a treatment, however it can be sold now as a prevention drug, this may ensure Gilead Science retains the largest market share, when generics or other companies try to enter the market, to target the HIV positive home testers.

Characteristics of End users

1. Dissemination

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A main factor that companies with innovation are searching for is adoption, compliance and the patient's continuation of use of the product (Refer to Figure 1) . Unfortunately, cognitive barriers can be in place if the innovation is complicated and difficult to use, resisting the dissemination and adoption at an end-user level. The distribution of new adopters over time can be graphed out in Figure 4, as adapted by Rogers (2003). Table 1 classifies the five different categories according to timing, as well as the marketing strategies for market segmentation.

Adopter categories

Marketing strategies

Personality type


Mass Media channels or Social Media

Adventurous with high social network and able to cope with uncertainty

Early adopters

Information asking type media such as printed flyers

Open to new ideas and thoughts, tend to be focused on technology and seek information

Early and late Majority

Peer advice

Risk adverse and may only adopt if others adopt and approve it


Only through trusted peers and intrapersonal networks

Lower social status, sparse social networks and exposure to media



Early adopters


Early majority


Late majority






Figure : Distribution of adoption over time (Greenhalgh, 2005)

Table : Different classification of adopters and marketing strategies to target each. Adapted from Greenhalgh et. al.(Greenhalgh and Greenhalgh)

2. Adoption and Implementation

To allow for implementation, reliance is usually placed on opinion leaders, who are perceived as having influence on beliefs or actions of their colleagues or also have a role of influence.(Locock et al., 2001) This is a distinctive factor that professionals have the power to decide if the innovation is to succeed, and influence others since adopted change is generally an collective effort not individual.( McNulty and Ferlie, 2002)Teelken et al., 2012) The different types of stakeholders play different parts in adopting innovation, however with different professions and levels of skills; a limited exchange in information occurs, exhibiting slow diffusion of innovation in organizations. (Fitzgerald et al., 2002) Peer to peer professions may acknowledge ideas between them on journals such as the British Medical Journal, however it was rare to find discussion forums between professions such as nurses and physiotherapists. (Fitzgerald et al., 2002)However in a mix of stakeholders, the innovation may resist adoption at other levels of hierarchy even if accepted by some. An example of this is, when the project manager of the Columba project of remote care monitoring had limited authority across all stakeholders, resulting in a defragmented channel of communication causing the unsuccessful implementation of remote care. (Barlow et al., 2006)

3. Continuation

To further allow for implementation and eventual continuation of the innovation, complexities and ease of use must be taken into consideration. The previous example is the Columba project, that was not adopted due to the complexities in organizational and cognitive systems, amongst others. Indicating that when innovations have a large patient interface, schemes must be put in place in inception to allow for uptake. The adoption of an innovation can be quickened by the social networks if professionals which control the communication of innovation and allows the values to be identified and captured. (Greenhalgh and Greenhalgh, 2005) An industry example of successful continuation of use is T plus ( Appendix B) , where patients can interpret their blood glucose readings and analyze their well-being. This may be complex and difficult to understand, however the service provided with T plus, includes a healthcare practioner to monitor the results online to allow for proper interpretation.

Characteristics of Organizations:


Resistance can be defined as the organizations forced in preserving the status quo and preventing change instead of ignoring adoption.(Bhattacherjee and Hikmet, 2007) Further speculated that systems tend to try to maintain equilibrium and resists change by constantly trying to revert back to the original state. (Lewin, 1947) Classified as low 'receptive' context due to slow adoption to changes, and lack the initiative to implement an idea although they may be informed of the apparent benefits of the innovation.(Allen and Currie, 2011)

To disseminate and publicize health innovation to an organization in a complex industry like healthcare, specific care must be taken to convince the right people, with the right evidence. In drug advertising, Leffler et. al. (1981) found that if the drug was introduced when the physician was in medical school, less persuasion is needed to reinforce brand loyalty and habit buying. This type of advertising affects the elasticity of demand, leading higher pricing through persuasive promotion which can help cause habit buying to improve brand loyalty. (Rizzo, 1999) For example, Visensia ( Refer to Appendix A) works closely with Jet engine technology and also with clinical trials - (Number xx DKJF), to maintain a strong evidence based case of safety and efficiency. Companies should keep this in mind and develop tools and language to support the creation of more receptive contexts for change in organizations, creating a habit for change, through effective advertising or pushing for more innovative solutions.(Pslek, 2003)

2.Adoption and Implementation

The evidenced based sector can cause barriers to adoption through regulations and safety issues. Hence setting up organistaions with a non entrepreuneurial spirit, an important driver for innovation. (Robert, 2009 #143) For example, the Kefauver-Harris Act, prompting the FDA to adopt more stringent rules concerning new drug testing and approval and hence raising costs and reducing patent lifetime results in a decrease of new drug delivery discovery. This regulation would negatively impact innovation by making it more expensive to approve a drug, hence also causing a ripple effect as payers would rather pay for a cheaper alternative instead of a higher priced innovation. This is also similar with the current Research and Development processes ( R&D) in medical device companies, where the entire process and phases can be timely, costly and inefficient, hence causing a barrier for innovative ideas to be approved. This increases the bureaucracy in innovative procedures, eventuating in disincentives to uptake the innovation.(Robert, 2009 #143) Therefore companies need to find methods of allowing innovations to be adopted by organizations, such as the previously mentioned opinion leaders.


To ensure continuity, innovations must adhere to regulations and uniformity for safety, where patents and standards are continuously improved and stringent on protection of health. These standards must be adhered to, to successfully integrate the innovation into the market. However once this barrier is overcome, it can be an advantage. In an interview with Peter Leyland, CEO of OBS Medical, it was stated that because Visensia ( See Appendix A), was approved by the ISO ( International Standards Organisation), it gave a marketing advantage and sale point compared to other similar products in the market.

Characteristics of Socio-Political Context

1. Dissemination

The successful adoption and diffusion process of an innovation requires not only for compatibility with the inner context but also in the wider context, such as the social or political context.. Denis et al. (2002) illustrates that the core elements of innovation is important for adoption, however the periphery of the elements must be adapted to the local context for the entire adaptive phase. Successful implementation occurred when the medical team underwent a team learning process from other unsuccessful areas.(Edmondson et al., 2001) The soft 'periphery' as described by a study on innovation in US hospitals done by Kimberly and Evanisko (1981), was defined by the size of the city, the age of the hospital and competition. However, other examples of external context that affects innovation is the urbanization of the organization, Champagne et al. (1987) found that the level of urbanization was positively correlated with the level of adaption. However it was noted that these associations were not as large a factor of adoption as internal ones. These factors must then be taken into account for the innovation process regardless. For example situational factors and body image of insulin pumps and meters worn for diabetic patients make patents self conscious and embarrassed. (Snoek et al., 2008)

2. Adoption and implementation

Due to pre-existing habits, the adoption of an innovation can be shaped and constrained by social structures set in the environment. (Barley, 1986) A simple example is illustrated by clinicians usually lack price, efficiency and risk of substitutes in the market, and tend to prescribe what they know and trust.(Caves et al., 1991) To counter this, Peter Leyland ( 2012), suggested a top down approach to marketing to encourage adoption. The approach, likened to the game of 'risk', where small individual conquests need to be made in clusters before moving to larger organizations for further adoption. This strategy game is a approximate model of the marketing campaign for Visensia. ( Appendix B)

3. Continuation

The Socio-Political context of the innovation is what will allow longevity of use. Political context can be encouraging if the company's long term goals are aligned together, but policies must be as adaptable and flexible to milestones, goals, methods and staffing structures of the organization.(Greenhalgh and Greenhalgh, 2005) However, Exworthy et al (2002) found that even though policies were made to reduce inequalities by strong alignments with the innovation, in reality the cascading of policy adoption was very small and overall the policy was a rebranding to fit new categories and budgets for political reasons. Short term goals and easily measured level indicators of dubious validity became results of the initiative.(Exworthy et al., 2002) Therefore companies should try to overcome as many political barriers as possible, or to avoid it completely, otherwise to find a current trend and to try and match the innovation to it. Peter Leyland, hinted at that the product T+ was purposefully manufactured to have a more patient centered and well being approach, similar to the current trend in policies. (Leyland, 2012)


Using the framework introduced in Figure 1 and the six factors that help or impede innovation process, different barriers to adopt and diffusion was taken into consideration at varying levels of the innovation process; dissemination, adoption, implementation and continuation. The reasoning behind these barriers were explained and ways to overcome them were discussed as seen in Table 3. The industry perspective in the long run is to maximize profits, which is done by longevity in compliance or to increase market share. Therefore the barriers of adoption and innovation posed by the characteristics of innovation should be considered and overcome to successfully undergo the innovation process for companies to maximize profits.

If companies fail to innovate, they will be left behind and inevitable lose market share or lose out to competitors. This is true in all sectors and can be seen in the current war between Samsung and Apple, where Samsung's role as a fast follower in smart phones, led to them losing a patent legal case to Apple. (Lee, 2012 #420) In a patent protected healthcare industry, it is essential for companies to innovate. Innovation in healthcare have led to virtually eradicating diseases such as whooping cough, and polio, while reducing costs for example the costs of treating ulcers with new drug therapy costs $900 a year compared to ulcer surgery costs of $28,900.(Weidenbaum, 1993). Additionally, Lichtenberg estimates that new drugs can increase life expectancy of populations by an average increase of a week.(Lichtenberg, 2003) Therefor although innovation may be risky and costly in the healthcare sector, with high barriers of adoption and diffusion, it is important to overcome them or avoid them for the industry to be successful.


The processing of innovation was traditionally can divided into the 'Schumpeterian Trilogy', invention, commercialization and diffusion, however recently adoption is accepted to be more complex. A new idea decided upon by collective groups or individuals is adoption, whereas diffusion is the accumulation of adopters over a period of time and the spread into society. The innovation's rate of adoption into society is based on five factors. (Rogers, 2003)

Table 1: Rogers five forces (Rogers, 2003)

Roger's five factors to adoption and diffusion




Relative Advantage