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The Diffusion of Innovations in Clean Energy Technology

Doug Collins - Wednesday, June 08, 2016

Now I Lay Me Down to Sleep

People who are serious about the practice of collaborative innovation keep three (3) books on their night stand: Getting to Innovation by Art Van Gundy, Democratizing Innovation by Eric von Hippel, and Diffusion of Innovations by Everett Rogers.

Each, in its own way, offers powerful insight to the innovation practitioner. Each, in its own way, presaged what would become the current state of the art of the practice. Van Gundy set the stage for what would become an explosion in challenge-based inquiry, vis a vis the X Prize and its internally focused kin. Von Hippel set the stage for what would become an explosion of incubators and learning labs that get the organization closer to, and co-creating with, its clients.

Rogers, for his part, helps us to understand and to predict the likelihood that an idea takes off and becomes a widely accepted and adopted innovation. I find his work to be timeless and increasingly relevant to the Digital Age, when the proliferation of ideas and the rapidity of their adoption, or their dismissal, seem to grow by the day.

Factors that Influence the Rate of Diffusion of Innovations

The Cliff Notes version of the Cliff Notes version of Rogers’ treatment of why some innovations diffuse—and their rate of diffusion—can be described by five (5) characteristics:

Relative advantage: the innovation offers a significant advantage over the current approach. 

Compatibility: the innovation is perceived as being consistent with existing cultural values, accepted thinking, and perceived needs.

Complexity: the innovation requires minimal learning on behalf of users to implement.

Trialability: the innovation is easy—requires minimal upfront commitment—to try or test

Observability: the benefits from trying the innovation would be highly visible.

Advocates of design thinking might find that their later contribution to Rogers’ insight was that it was best to come at relative advantage through the latter four characteristics, first, and not directly: let’s see what we have by getting it in the hands of the users, fast.

Observations on Clean Energy Technology

Rogers’ five factors give us a fresh pair of eyes with which to view the world around us.

Of late I have been following developments in the clean energy technology space. Clean energy technology might be described as innovations in the way we power our lives—how we live, how we grow food, how we drive, etc.—in a way that minimizes or eliminates the burning of fossil fuels.

Clean energy technology interests me for two reasons. It holds part of the answer to the question of how we as a society minimize the many harmful, cascading effects of climate change. And, the rate of diffusion of its innovation seems to be increasing exponentially, disrupting everything in its path: power companies, car companies, state and municipal governments, etc.—the list is endless. Students of innovation can learn a lot today from studying this industry.

Two news articles in particular caught my eye—attuned to Rogers’ way of thinking: one on the Chevrolet Volt and the other on the installation of solar panels on roof tops.

Article One: There's an Excellent Alternative to the Toyota Prius, but Everyone Is Ignoring It

In this article, author Matt Deford offers…

At the time I did the math and figured that an average commuter [with a Volt] would need to fill up the tank about only six times a year. But there would be none of the "range anxiety" issues that plague most all-electric cars, with the exception of Teslas — if a Volt owner were unable to recharge the batteries, he or she could keep going on good old regular gasoline.

Brilliant, right? Except that the Volt's sales never took off. Toyota has sold millions of Priuses in the US, but Chevy has sold only about 90,000 Volts between 2010 and early 2016.

He diagnoses the Volt’s problem—why its rate of diffusion has been so much less than that of the Prius…

If you want to enjoy the full Volt experience, and the fuel-cost savings that go with it, you have to plug it in. Otherwise, you're just going to gas it up and get roughly the same MPGs that you'd get from a Prius. And you have to have been attracted to doing the math in the first place. Thinking, thinking, thinking...

I've had my Prius for about a year, and I've never had to think about it.

In the framework that Rogers offers, the Volt may suffer from disadvantages tied to compatibility and complexity.

On the compatibility front, it may be that performing the physical act of plugging in a vehicle—and then unplugging it the next morning, putting away the cord, etc.—is incompatible with how most people think about their cars. As I recall, starting in the 1980s, when the Japanese automakers more fully penetrated the U.S. market by offering a higher quality alternative to the domestics, people came to value and accept the idea that they could turn the key each morning and their Toyota Camry would without fail go.

On the complexity front—and perhaps we see here an instance of complexity as a function of compatibility, the Volt user is now having to contend with a plug. The additional appliance adds complexity. Does the user have a place to store the plug, assuming they have a garage? Does the user have access to a charging station (e.g., at work)? If so, then can they assume a bay at the station will be open for their use—and so on?

Interestingly, a lot of news on this front has been around (a) finding ways to do away with the need for a plug and (b) creating a ubiquitous network of charging stations, including the development of an Airbnb-like network of home stations to let.

We shall see. Rogers’ framework helps us discern why the Prius won round one of what promises to be a long, accelerating battle to decarbonize how we drive.

Article Two: Solar power is contagious. These maps show how it spreads.

In this article, author Brad Plumer writes…

Residential solar power is contagious. Yep, contagious. Studies have found that if you install solar photovoltaic panels on your roof, that increases the odds that your neighbors will install their own panels.

SolarCity, the largest solar installer in the United States, just published data on this "contagion" effect. The company has installed 230,000 rooftop systems nationwide (often by allowing customers to lease panels rather than buy them upfront). It says fully one-third of customers were referred by a friend or neighbor.

What SolarCity calls “contagion” Rogers might cite as observability: the benefits from trying the innovation are highly visible. One of the natural advantages that clean technology such as solar and wind power enjoy is being highly visible: people install the former on their roofs, typically, and the latter can be seen from miles away, spinning in the wind.

A number of companies have invested in developing solar panels that do a better job of blending into the environment—solar panels, for example, that would be hard to distinguish from an ordinary roofing shingle. The idea? People would be more likely to install solar if the perceived unsightliness of the panels were minimized or eliminated.

Possibly.

Students of Rogers, however, might want to explore more fully how important the factor of observability has been in the diffusion of solar panels. It might be that making a more aesthetically pleasing version of the product or the technology has the near term effect of reducing the rate of diffusion. Perhaps the better course of action would be for the SolarCity’s of the world to “seed” their product by approaching homeowners whose roofs are highly visible to the rest of the community (e.g., people with homes sitting on corner lots at busy intersections) with attractive deals. Adoption becomes the best form of advertising.

What if Solar City painted its panels a bright yellow that fluoresced at night?

The counterweight to this train of thought might be compatibility: in this case, the cultural value that people assign to having a house with greater curb appeal. With Rogers, the innovation practitioner has a means of weighing their options.

Parting Thoughts

The publication Innovation Leader in April 2016 published the results of a survey of leaders of innovation at their respective firms. The question: What is top on your agenda?

The top answer by far was, “spotting emerging technologies and disruptive trends.”

It’s no secret that the rate of change continues to accelerate and, thus, the need for the innovation practitioner to remain vigilant increases.

The next question becomes, “Well, what if I see something interest—a new opportunity or a new threat? How do I gauge it.”

Here, Rogers’ framework continues to resonate and remain relevant. It’s fun and instructive to look at a dynamic market such as clean energy technology with his five characteristics in mind. 

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