Drivers of technology substitution : successive generations of high tech products

Principal Topic High technology consumer products such as notebooks, digital cameras and DVD players are not introduced into a vacuum. Consumer experience with related earlier generation technologies, such as PCs, film cameras and VCRs, and the installed base of these products strongly impacts the market diffusion of the new generation products. Yet technology substitution has received only sparse attention in the diffusion of innovation literature. Research for consumer durables has been dominated by studies of (first purchase) adoption (c.f. Bass 1969) which do not explicitly consider the presence of an existing product/technology. More recently, considerable attention has also been given to replacement purchases (c.f. Kamakura and Balasubramanian 1987). Only a handful of papers explicitly deal with the diffusion of technology/product substitutes (e.g. Norton and Bass, 1987: Bass and Bass, 2004). They propose diffusion-type aggregate-level sales models that are used to forecast the overall sales for successive generations. Lacking household data, these aggregate models are unable to give insights into the decisions by individual households - whether to adopt generation II, and if so, when and why. This paper makes two contributions. It is the first large-scale empirical study that collects household data for successive generations of technologies in an effort to understand the drivers of adoption. Second, in comparision to traditional analysis that evaluates technology substitution as an ''adoption of innovation'' type process, we propose that from a consumer's perspective, technology substitution combines elements of both adoption (adopting the new generation technology) and replacement (replacing the generation I product with generation II). Based on this proposition, we develop and test a number of hypotheses. Methodology/Key Propositions In some cases, successive generations are clear ''substitutes'' for the earlier generation, in that they have almost identical functionality. For example, successive generations of PCs Pentium I to II to III or flat screen TV substituting for colour TV. More commonly, however, the new technology (generation II) is a ''partial substitute'' for existing technology (generation I). For example, digital cameras substitute for film-based cameras in the sense that they perform the same core function of taking photographs. They have some additional attributes of easier copying and sharing of images. However, the attribute of image quality is inferior. In cases of partial substitution, some consumers will purchase generation II products as substitutes for their generation I product, while other consumers will purchase generation II products as additional products to be used as well as their generation I product. We propose that substitute generation II purchases combine elements of both adoption and replacement, but additional generation II purchases are solely adoption-driven process. Extensive research on innovation adoption has consistently shown consumer innovativeness is the most important consumer characteristic that drives adoption timing (Goldsmith et al. 1995; Gielens and Steenkamp 2007). Hence, we expect consumer innovativeness also to influence both additional and substitute generation II purchases. Hypothesis 1a) More innovative households will make additional generation II purchases earlier. 1 b) More innovative households will make substitute generation II purchases earlier. 1 c) Consumer innovativeness will have a stronger impact on additional generation II purchases than on substitute generation II purchases. As outlined above, substitute generation II purchases act, in part like a replacement purchase for the generation I product. Prior research (Bayus 1991; Grewal et al 2004) identified product age as the most dominant factor influencing replacements. Hence, we hypothesise that: Hypothesis 2: Households with older generation I products will make substitute generation II purchases earlier. Our survey of 8,077 households investigates their adoption of two new generation products: notebooks as a technology change to PCs, and DVD players as a technology shift from VCRs. We employ Cox hazard modelling to study factors influencing the timing of a household's adoption of generation II products. We determine whether this is an additional or substitute purchase by asking whether the generation I product is still used. A separate hazard model is conducted for additional and substitute purchases. Consumer Innovativeness is measured as domain innovativeness adapted from the scales of Goldsmith and Hofacker (1991) and Flynn et al. (1996). The age of the generation I product is calculated based on the most recent household purchase of that product. Control variables include age, size and income of household, and age and education of primary decision-maker. Results and Implications Our preliminary results confirm both our hypotheses. Consumer innovativeness has a strong influence on both additional purchases (exp = 1.11) and substitute purchases (exp = 1.09). Exp is interpreted as the increased probability of purchase for an increase of 1.0 on a 7-point innovativeness scale. Also consistent with our hypotheses, the age of the generation I product has a dramatic influence for substitute purchases of VCR/DVD (exp = 2.92) and a strong influence for PCs/notebooks (exp = 1.30). Exp is interpreted as the increased probability of purchase for an increase of 10 years in the age of the generation I product. Yet, also as hypothesised, there was no influence on additional purchases. The results lead to two key implications. First, there is a clear distinction between additional and substitute purchases of generation II products, each with different drivers. Treating these as a single process will mask the true drivers of adoption. For substitute purchases, product age is a key driver. Hence, implications for marketers of high technology products can utilise data on generation I product age (e.g. from warranty or loyalty programs) to target customers who are more likely to make a purchase.

Sustainable subdivisions – review of technologies for integrated water services

Water is a current major global, national and local issue. Historic drought and unprecedented restriction levels are now substantially influencing almost all Australia’s major cities. Residential design and adoption of appropriate technologies plays a key role in urban water efficiency. This project, the first of the CRC-CI Sustainable subdivisions program with a focus on water, explores the existing technologies available for sustainable suburbs.

Uptake of an OHS code of practice by Australian construction firms

The Australian construction industry is moving towards the implementation of a voluntary code of practice (VCP) for occupational health and safety (OHS). The evidence suggests that highly-visible clients and project management firms, in addition to their subcontractors, will embrace such a code, while smaller firms not operating in high-profile contracting regimes may prove reticent. This paper incorporates qualitative data from a research project commissioned by Engineers Australia and supported by the Australian Contractors’ Association, Property Council of Australia, Royal Australian Institute of Architects, Association of Consulting Engineers Australia, Australian Procurement and Construction Council, Master Builders Australia and the Australian CRC for Construction Innovation. The paper aims to understand the factors that facilitate or prevent the uptake of the proposed VCP by smaller firms, together with pathways to adoption.

Uptake of an OHS code of practice by construction firms : barriers and enablers in an Australian industry

The Australian construction industry, reflecting a global trend, is moving towards the implementation of a voluntary code of practice (hereafter VCP) for occupational health and safety. The evidence suggests that highlyvisible clients and project management firms, in addition to their subcontractors, look set to embrace such a code. However, smaller firms not operating in high-profile contracting regimes may prove reticent to adopt a VCP. This paper incorporates qualitative data from a high-profile research project commissioned by Engineers Australia and supported by the Australian Contractors’ Association, Property Council of Australia, Royal Australian Institute of Architects, Association of Consulting Engineers Australia, Australian Procurement and Construction Council, Master Builders Australia and the Australian CRC for Construction Innovation. The paper aims to understand the factors that facilitate or prevent the uptake of the VCP by smaller firms, together with pathways to the adoption of a VCP by industry.

A model for the uptake of E-business by building small and medium enterprises

The adoption of e-business by Small and Medium Enterprises (SMEs) in construction lags from other service and product businesses within the building sector. This paper develops a model to facilitate the uptake of electronic business, especially in relation to SMEs within the Australian construction sector. Ebusiness is defined here as “the undertaking of business-related transactions, communications and information exchanges utilising electronic medium and environment”, the elicited model highlights significant changes needed including skills development, social, economic and cultural issues. The model highlights barriers for SMEs to migrate towards e-transactions, e-bidding, e-tendering and ecollaboration and provides learning and skills development components. The model is derived from case study fieldwork and is to inform diffusion and awareness models for best practice. Empirical techniques included ‘focus group’ interviews and one to one ‘interviews’. Data was transcribed and analysed using cluster analyses. Preliminary results reveal that current models for e-business adoption are not effective within the construction context as they have emerged from other service and product industries - such as retail or tourism. These generic models have largely ignored the nature of the construction industry, and some modifications appears to be required. This paper proposes an alternative adoption model which is more sensitive to the nature of the industry – particularly for e-business uptake in building SME’s.

Australia : The Challenges of Poverty, Pedagogy, and Pathways

A discussion of 2008/2009 developments in Australian educational policy, with specific reference to the adoption of US and UK trends in accountability, testing and school reform.

Best Practice Guide : Clients

The Guide contains the distilled findings from a major, two-year research project to explore those factors considered by industry practitioners to be critical to the successful adoption of ICT, both within their firms and between their firms and their trading partners. In the context of this project Critical Success Factors (CSFs) have been defined as, “Those things that absolutely, positively must be attended to in order to maximise the likelihood of a successful outcome for the stakeholder, defined in the stakeholder’s terms.” The guide includes: o Perceived benefits of ICT use across the head contractors’ sector o Types and levels of ICT used across the sector o Self-assessment tool o CSFs for high-level ICT users, including o Best Practice Profiles o Action Statements The material contained in this Guide has been generated following a number of principles: o For a given situation there is not a single ‘right answer’, but a number of solutions that have to be evaluated using a range of relevant factors. o Since there are as many solutions as there are ‘solvers’, factors for evaluation will ‘emerge’ from collective wisdom.

Best Practice Guide : Consultants

The Guide contains the distilled findings from a major, two-year research project to explore those factors considered by industry practitioners to be critical to the successful adoption of ICT, both within their firms and between their firms and their trading partners. In the context of this project Critical Success Factors (CSFs) have been defined as, “Those things that absolutely, positively must be attended to in order to maximise the likelihood of a successful outcome for the stakeholder, defined in the stakeholder’s terms.” The guide includes: o Perceived benefits of ICT use across the consultants’ sector o Types and levels of ICT used across the sector o Self-assessment tool o CSFs for medium- and high-level ICT users, including o Best Practice Profiles o Action Statements o Barriers to ICT use for low-level users o Action Statements The material contained in this Guide has been generated following a number of principles: o For a given situation there is not a single ‘right answer’, but a number of solutions that have to be evaluated using a range of relevant factors. o As there are as many solutions as there are ‘solvers’, factors for evaluation will ‘emerge’ from collective wisdom.

Best Practice Guide : Head Contractors

The Guide contains the distilled findings from a major, two-year research project to explore those factors considered by industry practitioners to be critical to the successful adoption of ICT, both within their firms and between their firms and their trading partners. In the context of this project Critical Success Factors (CSFs) have been defined as, “Those things that absolutely, positively must be attended to in order to maximise the likelihood of a successful outcome for the stakeholder, defined in the stakeholder’s terms.” The guide includes: o Perceived benefits of ICT use across the head contractors’ sector o Types and levels of ICT used across the sector o Self-assessment tool o CSFs for medium- and high-level ICT users, including o Best Practice Profiles o Action Statements The material contained in this Guide has been generated following a number of principles: o For a given situation there is not a single ‘right answer’, but a number of solutions that have to be evaluated using a range of relevant factors. o Since there are as many solutions as there are ‘solvers’, factors for evaluation will ‘emerge’ from collective wisdom.

Best Practice Guide : Subcontractors

The Guide contains the distilled findings from a major, two-year research project to explore those factors considered by industry practitioners to be critical to the successful adoption of ICT, both within their firms and between their firms and their trading partners. In the context of this project Critical Success Factors (CSFs) have been defined as, “Those things that absolutely, positively must be attended to in order to maximise the likelihood of a successful outcome for the stakeholder, defined in the stakeholder’s terms.” The guide includes: o Perceived benefits of ICT use across the subcontractors’ sector o Types and levels of ICT used across the sector o Self-assessment tool o CSFs for medium- and high-level ICT users, including o Best Practice Profiles o Action Statements o Barriers to ICT use for low-level users o Action Statements The material contained in this Guide has been generated following a number of principles: o For a given situation there is not a single ‘right answer’, but a number of solutions that have to be evaluated using a range of relevant factors. o As there are as many solutions as there are ‘solvers’, factors for evaluation will ‘emerge’ from collective wisdom.

New insights into rebound effects : theory and empirical evidence

The main objective of the thesis is to seek insights into the theory, and provide empirical evidence of rebound effects. Rebound effects reduce the environmental benefits of environmental policies and household behaviour changes. In particular, win-win demand side measures, in the form of energy efficiency and household consumption pattern changes, are seen as ways for households and businesses to save money and the environment. However, these savings have environmental impacts when spent, which are known as rebound effects. This is an area that has been widely neglected by policy makers. This work extends the rebound effect literature in three important ways, (1) it incorporates the potential for variation of rebound effects with household income level, (2) it enables the isolation of direct and indirect effects for cases of energy efficient technology adoption, and examines the relationship between these two component effects, and (3) it expands the scope of rebound effect analysis to include government taxes and subsidies. MACROBUTTON HTMLDirect Using a case study approach it is found that the rebound effect from household consumption pattern changes targeted at electricity is between 5 and 10%. For consumption pattern changes with reduced vehicle fuel use, the rebound effect is in the order of 20 to 30%. Higher income households in general are found to have a lower total rebound effect; however the indirect effect becomes relatively more significant at higher household income levels. In the win-lose case of domestic photovoltaic electricity generation, it is demonstrated that negative rebound effects can occur, which can potentially amplify the environmental benefits of this action. The rebound effect from a carbon tax, which occurs due to the re-spending of raised revenues, was found to be in the range of 11-32%. Taxes and transfers between households of different income levels also have environmental implications. For example, a more progressive tax structure, with increased low income welfare payments is likely to increase greenhouse gas emissions. Subsidies aimed at encouraging environmentally friendly consumption habits are also subject to rebound effects, as they constitute a substitution of government expenditure for household expenditure. For policy makers, these findings point to the need to incorporate rebound effects in the environmental policy evaluation process.’

An in-depth study of a teacher engaged in an innovative primary science trial professional development project

The implementation of effective science programmes in primary schools is of continuing interest and concern for professional developers. As part of the Australian Academy of Science's approach to creating an awareness of Primary Investigations, a project team trialled a series of satellite television broadcasts of lessons related to two units of the curriculum for Year 3 and 4 children in 48 participating schools. The professional development project entitled Simply Science, included a focused component for the respective classroom teachers, which was also conducted by satellite. This paper reports the involvement of a Year 4 teacher in the project and describes her professional growth. Already an experienced and confident teacher, no quantitative changes in science teaching self efficacy were detected. However, her pedagogical content knowledge and confidence to teach science in the concept areas of matter and energy were enhanced. Changes in the teacher's views about the co-operative learning strategies espoused by Primary Investigations were also evident. Implications for the design of professional development programmes for primary science teachers are discussed.

The relationship between construction firm strategies and innovation outcomes

Survey results provide a preliminary assessment of the relative contribution of a range of tactical business strategies to innovation performance by firms in the Australian construction industry. Over 1,300 firms were surveyed in 2004, resulting in a response rate of 29%. Respondents were classified as high, medium or low innovators according to an innovation index based on the novelty and impact of their innovations and their adoption of listed technological and organizational advances. The relative significance of 23 business strategies concerning (1) employees, (2) marketing, (3) technology, (4) knowledge and (5) relationships was examined by determining the extent to which they distinguished high innovators from low innovators. The individual business strategies that most strongly distinguished high innovators were (1) ‘investing in R&D’, (2) ‘participating in partnering and alliances on projects’, (3) ‘ensuring project learnings are transferred into continuous business processes’, (4) ‘monitoring international best practice’, and (5) ‘recruiting new graduates’. Of the five types of strategies assessed, marketing strategies were the least significant in supporting innovation. The results provide practical guidance to managers in project-based industries wishing to improve their innovation performance.

Innovative Practices in the Australian Built Environment Sector : An Information Resource for Industry

PROJECT BRIEF Information provided by the Built Environment Industry Innovation Council as background to this project includes the following information on construction and innovation within the industry. • The construction industry contributes around $67 billion to GDP and employs around 970,000 and generates exports of nearly $150 million. • The industry has one of the lowest innovation rates of any industry in Australia, ranking third last across all Australian industries in terms of its proportion of business expenditure on innovation, and second last in terms of the proportion of income generated from innovation (ABS, 2006). • Key innovation challenges include addressing energy and water use efficiency, and housing costs in preparing for the implementation of the Carbon Pollution Reduction Scheme. The sector will need to build its capability and capacity to deliver the technical and operational expertise required.The broader Built Environment Innovation Project aims to address the following two objectives: 1. Identify current innovative practice across the Built Environment industry. 2. Develop a knowledge exchange strategy for this information to be disseminated to all industry stakeholders. Industry practice issues are critical to the built environment industry’s ability to innovate, and the BRITE project from the CRC for Construction Innovation has previously undertaken work to identify the key factors that drive innovation. Part 1 of the current project aims to extend this work by conducting a stocktake of current and emerging innovative practices within the built environment industry. Part 2 of the project addresses the second of these objectives, that is, to recommend a knowledge exchange strategy for promoting the wider uptake of innovative practices that makes the information identified in Part 1 of the study (on emerging innovative practices) accessible to Australian built environment industry stakeholders. The project brief was for the strategy to include a mechanism to enable this information resource to be updated as new initiatives/practices are developed. A better understanding of the built environment industry’s own knowledge infrastructure also has the potential to enhance innovation outcomes for the industry. This project will develop a coordinated knowledge exchange strategy, informed by the best available information on current innovation practices within the industry and suggest directions for gaining a better understanding of: the industry contexts that lead to innovative practices; the industry (including enterprise and individual) drivers for innovation; and appropriate knowledge exchange pathways for delivering future industry innovation. A deliverable of Part 2 will be a recommendation for a knowledge exchange strategy to accelerate adoption of innovative practices in the built environment industry, including resource implications and how such a recommendation could be taken forward as an ongoing resource.