The diffusion of innovation: Why tech adoption matters for business

by | Jan 28, 2022

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For decades, technology marketers have attempted to classify consumers (and businesses) according to their desires (or abilities) to deploy new, potentially disruptive innovations. Early adopters and laggards are terms we’ve all heard. But according to research, there are other categories of tech adopters. Innovators, fast followers, early majority, late majority—the list goes on based on what tech adoption model you embrace. In some way or another, most follow the long-held theory of the diffusion of innovation.

What is the diffusion of innovation?

Essentially, the “diffusion of innovation” attempts to explain how, why, and at what rate new technology proliferates through a society.

It’s easy to understand why marketers at tech companies want to understand the behavior of potential customers through the diffusion of innovation. They’re not going to try and sell a so-called “disruptive” technology to a company that is clearly a tech laggard. That is, a company much slower than average when it comes to trying something new. They’re going to target those people and organizations willing to take risks—and there are surprisingly many. But why does it matter for small businesses?

The diffusion of innovation for small businesses.

Although some of this discussion can seem theoretical (and overly broad), your approach to technology can affect the success of your business.

You might think that slower adoption of the latest tech is the safest way to go.  After all, it helps you save money and see if products or ideas actually work. But it could be the riskiest move to make. Let’s take the last few years as an example. Many small businesses were forced to accelerate their tech adoption to meet the demands of the pandemic, including remote work, omnichannel e-commerce, and virtual appointments.

We live in a fast-paced world, and things aren’t likely to slow down anytime soon. Over the last couple of years, we’ve seen an explosion of new online platforms and new technologies for business. There have also been rampant supply chain issues and a massive shift in employee priorities. Virtual reality and the metaverse are on the horizon. To keep up with it all and stay competitive, small businesses need to adapt and be on the front lines of innovation.

Owners and managers of small businesses like yours—who are, after all, key consumers of technology—should also be aware of where they fall along the tech adoption curve. This self-knowledge can help you strategize on your tech evolutions and may help you grow your small business in our increasingly digital world.

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Innovators: The risk-takers

Who they are: Innovators, about 2.5% of the population, love trying new things. These are the folks who buy the latest iPhone as soon as it hits the market. They get chills when new products and features are leaked to the media. The product doesn’t even need to work to entice an innovator. They’re after the thrill of the new. The experience of trying something new is worth it, even if it fails.

What it means: If you’re an innovator, you’re not measuring your investment and benefits to achieve a return on investment (ROI). Instead, you have your eye on what’s coming. Some innovators do this because they’re in hypercompetitive markets. You may feel like it’s worth the expense to prepare yourself for the inevitable. When Version 1.0 of a product comes out, you invest despite the unavoidable flaws and bugs. That way, you’ll be ready to pounce when the technology is finally ready for prime time.

Of course, sometimes the “inevitable” doesn’t happen. The market may move in a different direction altogether, so it could be a bust. But that’s okay because innovators, like you, are in it for fun. You probably consider every experience a learning experience—including, or especially, failures.

Early adopters: Thought leaders and influencers

Who they are: While early adopters are like innovators in that they like to lead trends, they’re a little more practical. About 13.5% of the population, early adopters take the time to evaluate and judge a technology before they invest in it. They make terrific beta testers because they like to play with new tools and give their opinions about them.

What it means: If you’re an early adopter, you are different from an innovator because you don’t like to fail. You don’t mind getting your hands dirty by installing updates and fixing early bugs, but you don’t want to end up with egg on your face. You worry about your (or your business’) reputation.

If you’re an early adopter, you prefer to keep your personal experience private if it leads to disappointment. Then, because you like appearing knowledgeable and as the head of the pack, you enjoy talking up innovations (or nixing them) with others. As an early adopter, you are a perfect evangelist for a technology if you’re worried that your employees might hesitate to adopt, say, a new mobile app.

Early majority: Let’s see the proof

Who they are: About 34% of people fall into the early majority category. If you’re an early majority user, you’re intrigued by innovation but want proof that it works. The thousands of pages of product reviews that live on the internet were written for early majority people. They eat up case studies and user testimonials.

What it means: If you fit in this category, you’re logical, practical, and data-driven. You want proof that the technology solves a specific problem—ideally something very similar to a challenge you currently face. You very much keep your eyes on the total cost of ownership (TCO) and a new tool’s ROI. And you have a high degree of success with the tech projects you take on—even if you lag behind some of your more adventurous competitors.

Small businesses, in particular, tend to hold off on new purchases until they are proven by their peers. By definition, cash flow and capital are less on tap than for larger enterprises, and so as a small business owner, you have to make every dollar count. This naturally tempers the risks you are willing to take on.

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Late majority: The skeptics

Who they are: Very much like their early majority brothers and sisters, the late majority (34%) want a logical reason to adopt new technology. They want facts. They will do their research before they are convinced that a technology is worth their money.

What it means: Late majorities are not risk-takers. If you fall into this category, you question everything. Fads or even established trends do not interest you. You wait as long as you can before triggering software updates, waiting to see how they work out for others before taking the leap. Because of this, you sometimes miss out. Those late-majority businesses that waited to see if it was safe before dipping their toes in the cloud, for instance, got caught short by COVID-19. So, you pay the price for caution.


Who they are: Laggards, about 16 % of the population, are exceedingly suspicious of innovation. They are all about what’s-in-it-for me? And they mean me—they don’t care if a new tool will boost productivity for the business as a whole if it doesn’t improve their own lives.

What it means: Laggards cling to the status quo. If you are a laggard, you are very stubborn. Suppose something doesn’t immediately improve your business, or there are challenges in learning how to use it. You may be likely to give up. In today’s fast-paced tech-savvy world, laggards may have difficulty keeping up with the competition.

Last words on the diffusion of innovation

You don’t have to be an innovator in everything. As a small business owner, it’s important to take calculated risks regarding the innovations you decide to invest in. And the categories can be fluid. You might be an innovator when it comes to allowing your employees to bring their own devices, but a laggard when investing in AI for finding and onboarding new workers. You may be skeptical about how the whole work-from-home thing will pan out, but you may already be using the cloud and edge computing.

It’s essential to look forward and think about the types of technology you can advocate for as an early adopter or innovator. Investing in your technology can help you stay competitive, attract the best talent, and become a leader in your field.

To learn more about innovation, check out these articles from the Work section of the Quantum Fiber Explore blog:

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