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Innovation with Significant Impact on Modern Life 1

INNOVATION, THEORETICAL REVIEW, INNOVATION CASE STUDY AND REFLECTION

Student ID: 001016655 Module: BUS-1322 Module Name: Innovation in Action Date: 16/12/2020

Essay Question: Write an essay on one of the innovations which you consider to have made a significant impact on modern life.

Innovation with Significant Impact on Modern Life 2

Introduction There are multiple innovations being advanced every day around the globe. Some of the innovations manage to dominate both national and global stage thus becoming inescapable part of human life. There are innovations that are known and important to a selected group of individuals or those within the circle of developers. Arguably, the innovation brought about by internet or digital technologies have had a great impact on people’s lives (Shibeika & Harty, 2015: 455). The existence of internet have revolutionized social interactions through changing how people communicate. Through the digital technological platforms such as online, people can order various products, get news, and share content with friends and families. Internet itself has also received transformations since its developments in the 20th century. The revolution of internet was enhanced by the emergence of web 2.0 in the first decade of 21st century. The developments occasioned by the web 2.0 led to fostering of social media and other crowd-based communication tools (Rochman & Peiper, 2017). Besides communication, the advent of internet has come along with vital change through the society leading to transformation from industrial age to networked era. Primarily, there are factors that enables one innovation to influence the way in which the society operates while making other innovations irrelevant (Wisdom et al., 2013: 480). The scholars have proposed various theories and models that explain the diffusion of innovation and the way society and organisations embrace innovations.

Innovation with Significant Impact on Modern Life 3

Theoretical review of key innovation topics Roger’s innovation diffusion theory (IDT) The theory was developed by Everett Rogers in 1962 which has since been referred in many case studies involving innovation. The theory is applied in explaining the foundation use for understanding the adoption of innovation and the factors that shape individual’s choice regarding innovation. IDT tend to provide a broad scope which in turn makes it more flexible for contextualisation across numerous fields. However, the theory becomes challenging to apply as a process model when making organisational plans to facilitate changes resulting from innovation (Dearing, 2009 ). There are four primary components that are involved in diffusion theory. The first component relates to the innovation itself. The second element entails the existing social systems around adopters and non-adopters of the innovation idea. The third component is the time individuals take to move across the adoption process (Shibeika & Harty, 2015). The interactions between the models can be used to explain the reasons why people tend to adopt a certain innovations are adopted while others fail. The sub-process of the theory by Rogers is the innovation process or decision that leads to rejection or adoption of a certain innovation (Zhang et al., 2015). When adopter move across the innovations process, Roger presents five stages that the adopters move when trying to adopt an innovation. The first adopter’s category contains the innovators. The innovators are the individuals who seek to be the first in obtaining the product or service. The group comprises of people with the characteristics of being risk takers and in-sensitive to prices (Dearing, 2009 ). The innovators can manage to handle the high degree of uncertainty. In influencing the performance of the new product or service, the innovators play a vital role facilitating market acceptance (Zhang et al.,

Innovation with Significant Impact on Modern Life 4 2015). For instance, people who spent their nights are the movie theatre waiting to be the first one to buy the products can be considered to be the innovators. The second adopter’s level encompasses the early adopters. The early adopters are not fast in taking risk as compared to the innovators. Essentially, the early adopters wait for a certain period until the product received some reviews before they can attempt to make purchase. Within their social systems, the early adopters are often referred to as opinion leaders or influencers (Jwaifell & Gasaymeh, 2013). The groups play a role in enabling the product to spread the product and make it achieve “critical mass.” Consequently, the number of the early adopters determine the success or the failure of product adoption in the market (Dearing, 2009 ). When the number of the early adopters reduces, the number of the people likely to adopt the product also declines. In the example related to the people who purchase the movie, the individuals who wait for reviews before going to see a movie are considered to be early adopters. The third category of adopters are the early majority. Early majority are representatives of the early majority of the market comprising of 34% (Dearing, 2009 ). The early majorities are also not risk takers. They spent time waiting for the product to be used or tested by a trusted peer so that they can make a purchase. The people are sensible and thus seek to buy products that have been proven to be effective (Shibeika & Harty, 2015). The individuals who go to the movie shops several weeks after receiving good reviews are the categories comprising of early majority. Late majority is the fourth category of innovation adopters. The category tend to be a representative of a substantial part of the market which is 34% (Dearing, 2009 ). The category represents the last group of the consumers that enter into the market. The individuals seem to be sceptical, cost-insensitive, technologically shy, and conservative. Being cautious to the prices is another factor that seem to be the leading cause for decision making of the late majority (Jwaifell

Innovation with Significant Impact on Modern Life 5 & Gasaymeh, 2013). Additionally, the late majority are peer pressured in order to make the purchases of the new products. Concerning the example of the movie, the people who wait for the movie to be available online or in Netflix are examples of late majorities. The last category of innovation adopter refers to laggards. The group is the last to adopt the new product or service. The individuals tend to be resentful of the new products or services and thus they continue to rely on the traditional products in the market. The factor that make them change their ideas and adopt new products is when the traditional products in the market become depleted. Laggards in the example of a new movie relates to the individuals who get to watch a movie after it is shown in a network. In relation to online as innovation, there are five attributes that can be used in explaining the adopting of technological models associated with online. There are factors that influence the adoption of online as an innovation. The factors include relative advantage, complexity, trialability, observability, and compatibility (Shibeika & Harty, 2015). The concept of relative advantage refers to the extent at which innovations brings benefits as compared to other alternatives. Whether the innovation matches the adopters work or process flow is the aspect relating the compatibility of the innovation as a factor that would influence adoption (Jwaifell & Gasaymeh, 2013). The other factor associated with complexity affects the adoption of the innovation. When an innovation is perceived to be too high, then the organisations and other users are less likely to incorporate or embrace it. Failure to adopt the technology is cited on its complexity. Trialability is another critical factor that would influence the embracement of the technology (Doyle et al., 2014). The innovation adopters are more likely to adopt the technology when they are able to test and determine how it works before making the decision of incorporating it or not. In the element of observability, it relates to the scenario where a certain

Innovation with Significant Impact on Modern Life 6 innovation was adopted and diffused within a certain cultural system (Zhang et al., 2015). The ideas of people who had initially dismissed the idea of adopting the innovation begin to change the mind set and consider adopting after seeing its successful adoption elsewhere. The aspect of observability has been the rationale behind the adoption of numerous personal technologies such as FitBit and smartphone. Similarly, many universities have been observing the implementation of online courses in other institutions before applying the same idea. Making the observations has allowed the universities to learn from the failures and success of the early adopters of the innovation.

Open innovation model The model was developed as an alternative model towards explaining the process and sources of ideas for innovation in a firm. The models argues that the firms should utilise internal and external ideas as they look to advance technological advancement (Frenken, 2006: 138). The theory also emphasises on the importance of focusing on the internal and external routes to the market when advancing their technology. The open innovation is a sharp contrast to the traditional approach that proposes the role of internal research and development (R&D) before embracing technology. According to Herzog & Leker (2010 ), open innovation refers to the utilisation of purposive outflows and inflows of knowledge to enhance innovation that is generated internally. In the 20th century, the organisations mostly benefitted from the innovations that were products of investing in the internal R&D. However, the end of 20th century saw uprising of several factors that necessitated breaking up of closed innovation (Herzog & Leker, 2010 ). One of the factors that led to adoption of open innovation were associated with growing

Innovation with Significant Impact on Modern Life 7 availability of private venture capital and mobility knowledge of the employees. The increase in the number of the mobility of employees’ knowledge posed a challenge to the companies to continue safeguarding the proprietary expertise and ideas. On the other hand, the increase in the availability of private venture capital led to a situation where the employee’s ideas could be commercialised. There are several factors that differentiate closed from open innovation. In the closed innovation, a firms believes that intelligent employees work with them, discover new ideas among them, and thus working on the nee ideas will enable the firm to get into the market first and become more competitive (Frenken, 2006: 138). The closed model also argues that the firm should guard and exploit the intellectual capacity of its employees as a vital asset. Conversely, open innovation holds different views (Herzog & Leker , 2010 ). According to the ideas of open innovation, the firms believe that not all smart and intelligent employees work within their firms. It is therefore necessary to capitalise on the knowledge from outside the firm. The concept of R&D could be critical in enabling the company to create value for its innovation (Herzog & Leker, 2010 ). The internal and external ideas are vital in ensuring that a company employees successful innovation strategies. While the firm should benefit from its own intellectual property (IP), external IP would result to more benefits to the company. From the ideas of open innovation model, the concept refers to the situation where the firm manages to exploit technology and acquisition that is more advanced. As the boundaries between the firms become porous, interaction is more enhanced (Herzog & Leker, 2010 ). Consequently, the firm can manage to capitalise on a wider platform of technological development. Open innovation is divided into two major categories, in-bound and out-bound levels (Herzog & Leker, 2010 ). The in-bound innovation entails the use of external discoveries

Innovation with Significant Impact on Modern Life 8 made other individuals outside the firms with the aim of using their competencies in enhancing the firm’s innovativeness. In achieving this goal, the organisation seeks to establish relationship with an external firm. It therefore, implies a purposive inflows of technology or knowledge exploring the knowledge of the external firms when trying to ensure that the firms becomes more competitive and easy access to the market (Frenken, 2006: 138). Conversely, out-bound open innovation entails the purposive flow of knowledge or technological exploitation where an organisation seeks to benefit from the existing technological advancement of the external firms. The external exploitation relates to the exchange of ideas where a firm agrees to sell intellectual properties and diverts ideas to the external parties.

Chocolate model The model explains another element of change emanating from innovation and adoption. The model focuses on the adoption of innovation and change in the organisation. The adoption of the change is structured in four aspects that include change, adopters, change agents and the organisations. Unlike the diffusion theory of Rogers, Chocolate model can be applicable in planning for organisational changes and adoption of innovation (Dormant, 2011). The process of incorporating the change relates to first analysing the change whether it is in the existing or new system. The second step relates to the analysis of the adopters. The third step entails the identification of the change agents where the plan is developed at this point (Shibeika & Harty, 2015: 454). The subsequent step relates to the examination of the organisation where the change is expected and the impacts on other aspects of change (Dormant, 2011). The chocolate model relates tend to be consistent with technological acceptance model (TAM) of adoption of changes. The adopters looks at the advantage of the change or innovation. Additionally, the adopters in the model look at the compatibility and simplicity of the innovations before embracing it.

Innovation with Significant Impact on Modern Life 9 Technological acceptance model The last theoretical approach towards argues that the ability of adopters to embrace the change occasioned by the technology is pegged on adopters expectations and attitudes. The applicability of the innovation is based on the ease of implementing and learning the innovation and the potential benefits (Marangunić & Granić, 2015: 84). When the users find a usefulness in a change, they are more likely to embrace the changes. In a study that was done by the proprietor of the theory, regardless of how the technology is ease to implement people would be reluctant in embracing the innovation since it is not beneficial (Marangunić & Granić, 2015: 84). The example of successful implementation of the technological can be derived from the association certain study was done in the UK on studies seeking to examine critical factors that determine whether a person engages in an online travel community or not.

Innovation case study The relevance of the technological based innovation can be established from the Starbucks education program of enabling their employees to enrol and receive their degrees. The institution is based in the U.S. The program was developed with the aim of providing assistance to the needy students who were intending to learn but at the same time work to raise their tuition fees. In most cases, balancing the two becomes an uphill task thus making many students drop out of the school (Rochman & Peiper, 2017). The achievement plan developed by the institution provides a means where eligible employees of the school could receive full time tuition fees so that they can undertake over 70 million courses degree programs that are taught online in Arizona States University (ASU) (Rochman & Peiper, 2017). The students could also be provides with additional support of such as enrolment of counsellor. Besides the employees who failed to attain qualification for degree programs at ASU, the college provided additional

Innovation with Significant Impact on Modern Life 10 support. The students were to undertake a series of online courses taught at Global Freshman Academy with aim of gaining academic qualifications to join ASU. By 2025, the institution targets graduation of over 2500 students through the online program (Rochman & Peiper, 2017). Progressively, since the program began in 2015 numerous students have graduated while the number of those enrolled continue to rise. The program has continued to expand with partnership with other companies continuing to grow. ASU partnered with Adidas in a similar program that seeks to oversee the graduation of students using the online platform. The pilot of the program was undertaken in 2018 using 100 students (Rochman & Peiper, 2017). Over 100 Adidas employees obtained much of their tuition from ASU online platform covered by their organisation. The purpose of the partnership is to foster knowledge and thus sharpen the innovative skills of employees globally through the online platform.

Relationship between ideas in the literature and details of the case The partnership between ASU and StarBucks College can be analysed through various theories and models discussed above. Firstly, the partnership can be explained through the various elements contained in Roger’s diffusion theory on innovation. Primarily, the first element is innovation which drives the idea to develop online degree programs that can be provided to the employees are Starbucks (Shibeika & Harty, 2015: 457). The second element related to communication. The partnership program was announced in various communication channels that include university media, internal mechanisms of the company and interviews among others (Rochman & Peiper, 2017). The fourth element contained in Roger’s diffusion theory is the incorporation of social systems in ensuring an innovation is adopted. From the program to not

Innovation with Significant Impact on Modern Life 11 only hire members of the society, the company is seen as establishing links with the society through giving back to the society (Frenken, 2006: 139). The involvement of the society is a critical factor that creates a market for innovation to thrive. Secondly, the online education program by Starbucks provides a focus on the overlapping of beneficiaries and adopters. From the chocolate model ASU University and the company drawing the plans to implement the program can be considered to be the change agent (Rochman & Peiper, 2017). Besides the change agents, other parties such as HR officers, counsellors, success couches, and ASU admission officers can be termed as being adopters of the innovation. From the chocolate model as well, the beneficiaries of the innovation are the employees of Starbucks who are the students in the program. In a corporate setting, the issue of politics cannot be avoided. However, the issue of resistance and corporate politics seem to be minimal in the agreement as the employees embrace the program swiftly. From the concept of TAM and chocolate perspective, delivering education at ASU is easy to implement since the system was already tested and being applied at ASU (Rochman & Peiper, 2017). The initial application of the system satisfies the need for compatibility and simplicity as contained in the Chocolate model (Damiano, 2011). Additionally, the program looked at the change process as detailed in Chocolate model. The steps contained in the model were discussed. The changes process was initiated from the outlining the intended change need, defining the adopters and change agents, and development of actions plan. Due to lack of qualification to get admission into the ASU degree program, there were plans to enrol the employees into a program that would boost their qualification. Lastly, the open inn...