Determinants of takoff and slowdown of innovation in a situation of uncertainty regarding environmental and health risks
Résumé
Uncertainty is immanent in every innovation. Apart from innovation performance, uncertainty in the field of nanotechnology is mainly associated with environmental and health risks. Due in part to a lack of consistent data, there is a limited empirical literature on determinants of diffusion of nanotechnology. While recent studies [1, 6] have identified some patterns of the diffusion of innovation in a situation of uncertainty, they have not fully explored it. This research aims to define determinants of takeoff and slowdown of a new product in a situation of uncertainty about environmental and health risks. Specifically, this presentation has two goals. The first one is to provide better understanding of the diffusion process of an intermediate good which is in the transition phase between the growth and the maturity stages. We choose a chemical (bisphenol A (BPA)) as a possible model for a nano-based intermediate good because of the lack of historical data on nanomaterials. The second goal is to compare these results to nanosilver which can be considered as an intermediate good at the introduction stage. Side-effects of new products might be unknown in the early stages of product life cycle. Moreover, safety aspects do not appear to be often integrated from the design stage of (nano)products. Increasing scientific evidence of potential undesirable effects of a new product might have an important effect on the rise of public concerns which might lead to serious consequences for the diffusion of this new product. New perspective will help managers to better understand the stages of diffusion of a new product in a situation of uncertainty. Besides, very little research is available regarding the adoption of innovation under these conditions [7]. For this research, data on BPA consumption and explanatory variables, which potentially affect consumption of bisphenol A, have been collected from different sources. Before applying the Feasible Generalized Least Squares to estimate a model, a principal component approach has been applied to choose a subset of predictors among multiple proxies to construct a parsimonious model. Drawing on the study of Ghimire and Woodward (2013), we have constructed a measure of “over-“ and “underconsumption” of bisphenol A. “Under-consumption” can be an alternative indicator of rejection, discontinuance of innovation or slowdown of product’s sales growth at international level. Prior literature suggests that the factors which influence the entire diffusion process, produce different effects in the various phases of product’s life cycle [2, 4, 5]. Additionally, one of our results suggests that certain factors might have different effects at the same stage in the absence of uncertainty and in its presence. For example, Golder & Tellis (2004) have found that a decrease in income can be associated with an increase in probability of slowdown. Contrary to these findings, we have found that higher income might be associated with a decrease in consumption of a product in a situation of uncertainty about environmental and health risks. We propose that at higher level of income, people could become more concerned about health and the environment and as a result generation of potential side-effects could be reduced by the risk-averse consumer choices. The second part of this presentation is devoted to a comparison of these findings to nanosilver which provides us with additional insights into the determinants of its takeoff.