The Adoption of Radical and Incremental Innovations: An Empirical Analysis

TLDR

Technical process innovation adoption is less affected by decision‑making centralization, managerial attitudes, or external information than other innovation types. The study tests whether distinct predictive models are required for radical versus incremental technical process innovations. Using a sample of 40 footwear manufacturers, the authors empirically evaluate adoption models for both radical and incremental innovations. Across the sample, extensive technical specialist depth predicts adoption of both innovation types, larger firms are more likely to adopt radical innovations, and decentralization, managerial attitudes, and external information show no association with adoption.

Abstract

This paper proposes and empirically tests whether different models are needed to predict the adoption of technical process innovations that contain a high degree of new knowledge (radical innovations) and a low degree of new knowledge (incremental innovations). Results from a sample of 40 footwear manufacturers suggest that extensive knowledge depth (measured by the number of technical specialists) is important for the adoption of both innovation types. Larger firms are likely to have both more technical specialists and to adopt radical innovations. The study did not find associations between the adoption of either innovation type and decentralized decision making, managerial attitudes toward change, and exposure to external information. By implication, managers trying to encourage technical process innovation adoption need not be as concerned about modifying centralization of decision making, managerial attitudes and exposure to external information as would managers trying to encourage other types of innovation adoption, e.g., innovations in social services where these factors have been found to be important. Instead, investment in human capital in the form of technical specialists appears to be a major facilitator of technical process innovation adoption.