The Diffusion of Innovations: Some Reflections

This paper discusses a number of interrelated topics relating to the economics of innovation diffusion that merit further research and study. These topics encompass: how innovations are not just technological, may be horizontal or vertical, and may develop over time; the role in the diffusion process of complementarities across and substitutability between different technologies and innovations; how the many different sources of innovation other than R&D are given insufficient attention in the literature; the international dimensions of the diffusion process with emphasis on cross-country effects; the role played by different market structures in the industries supplying goods embodying new technologies; the imbalance in the relative emphases upon intra- and intra-firm diffusion in the existing diffusion literature; the need for more research on the relationship between firm performance and the diffusion of innovations, and government policy on diffusion.