What triggers innovation diffusion? Intermediary organizations and geography in cultural and science-based industries

Abstract

This paper argues that innovation diffusion is not a rational implementation process, but more accurately portrayed as a highly social process, involving sets of intermediate organizations that contribute to a product’s reputation. Empirically it builds on two case studies, one cultural and one science-based, to demonstrate there are industry differences in where innovations get validated: validating intermediaries are centralized in few global nodes in the case of theatre, and decentralized in each marketplace in the case of pharmaceutical vaccines. This pattern is counterintuitive, because it is different from what we would expect based on the spatial organization of their production activities. These findings have implications for policy: can we assume innovations will readily diffuse (and export) outside their region of origin?