Fostering Innovation in the Public Sector: The exemplary Case of Baden-Württemberg

Università degli Studi di Modena e Reggio Emilia D

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Fostering Innovation in the Public Sector:

The exemplary Case of Baden-Württemberg

Prova finale di:

Chiara Ricci Petitoni Relatore:

Eugenio Caperchione

Correlatore Antonie Hornung

Anno Accademico 2017-2018

Abstract

“Innovazione” non è più soltanto un termine alla moda, ma è oggi considerata una potenziale soluzione ai problemi che affliggono la società moderna ed è per questo diventata tema centrale nel settore privato e pubblico. Nel primo caso, l'impulso all'innovazione è guidato dalla necessità di reggere la concorrenza e offrire prodotti e servizi che portino all'aumento delle quote di mercato e incrementino il valore aziendale. Nel secondo caso invece è più difficile definire gli elementi che stimolano l'innovazione nel settore pubblico. Tuttavia, la sempre maggiore ricerca da parte di governi e istituzioni pubbliche di un equilibrio tra le priorità rende evidente la necessità di approcci innovativi, con l'obiettivo di semplificare la fornitura di servizi e ottenere miglioramenti in termini di processo, regolamenti e politiche. Perseguire scopi innovativi non è sicuramente un compito facile per il settore pubblico che è continuamente sottoposto al giudizio dei cittadini e dominato dalla tradizionale avversione al rischio dei governi. In questo contesto, il seguente lavoro si propone di illustrare come il settore pubblico può supportare l'innovazione per servire efficacemente i propri cittadini e quale impatto può avere l'adozione di politiche innovative sulla società. Il tema principale è quindi l'innovazione nel settore pubblico, in particolare i metodi e le misure utilizzate per

raggiungere questo scopo e il caso esemplare del Land tedesco Baden-Württemberg come leader europeo e mondiale in ambito innovativo.

Il metodo utilizzato si basa su una ricerca bibliografica che comprende saggi, articoli e libri sull'innovazione, la sua diffusione e l'importanza della tecnologia e delle organizzazioni per lo sviluppo innovativo e documenti digitali inerenti il supporto pubblico all'innovazione. Inoltre, per la descrizione della situazione in Baden-Württemberg sono stati utilizzati documenti dell' OECD, i siti del Land tedesco, in particolare del Ministero dell'Economia, Lavoro e Edilizia e del Ministero della Scienza, Arte e Ricerca e materiale fornito dai funzionari pubblici impiegati nel settore di ricerca e sviluppo del Land. In seguito all'analisi dettagliata delle fonti è stato dapprima introdotto

l'argomento generale dell'innovazione e la sua diffusione, per poi procedere ad una sua

contestualizzazione nel settore pubblico. Seguendo un approccio deduttivo sono stati analizzati il problema legato alle innovazioni nel settore pubblico, le diverse tipologie di innovazioni in questo ambito e le dimensioni in cui si sviluppano, per poi illustrare le misure adottate per supportare l'innovazione pubblica. Infine, le considerazioni teoriche e generali sono state dimostrate attraverso l'esemplificazione pratica del caso tedesco, rappresentato mediante il focus specifico sul Baden- Württemberg. Anche in questo caso l'approccio dal generale al particolare ha permesso dapprima di contestualizzare la situazione del Land all'interno del quadro più ampio di ricerca e innovazione tedesca e in seguito, grazie all'utilizzo di grafici, di descrivere dettagliatamente la strategia e le misure innovative che distinguono il Baden-Württemberg a livello nazionale e internazionale. In ultima analisi è stato illustrato il ruolo chiave che i servizi alle imprese ad alta intensità di conoscenza hanno storicamente svolto in Baden-Württemberg e l'importanza attribuita in questo contesto ai servizi tecnici. Sulla base di queste considerazioni è quindi stato possibile analizzare l'impatto innovativo, rappresentato soprattutto dalla digitalizzazione dei servizi ad alto coefficiente di conoscenze e fare previsioni sulle conseguenze future dello sviluppo innovativo in questo settore.

Lo scopo di questo studio è quello di sottolineare l'importanza dell'innovazione nel settore pubblico, per servire in modo sempre più efficace i bisogni di una società in continuo sviluppo e far fronte alle sfide future. Da questa ricerca è emerso come l'adozione da parte delle istituzioni pubbliche di misure specifiche e politiche strategiche volte al supporto crescente di ricerca e innovazione sia non solo necessaria ma anche urgente al fine di reggere la concorrenza internazionale e offrire soluzioni efficaci e durature ai problemi che affliggono la società moderna. Attraverso l'esempio del Baden- Württemberg è stato proposto un modello innovativo di successo, basato su elevati investimenti in ricerca e sviluppo e un approccio orientato al futuro. Questo caso concreto offre inoltre lo spunto

Di conseguenza, il seguente lavoro lascia aperta la questione se il modello del Land tedesco sia applicabile in un contesto italiano e se sì in quale/i regione/i sia più adatto. Infine, nel presente studio sono stati illustrati gli aspetti innovativi nel settore pubblico e dei servizi. Ulteriori spunti di ricerche future riguardano quindi l'approfondimento di queste tematiche nel settore privato e in aree come quella economica, industriale e tecnologica.

Parole chiave: innovazione nel settore pubblico, strategie e politiche innovative, ricerca e sviluppo, Baden-Württemberg, servizi ad alta intensità di conoscenza.

Abstract

“Innovation” is not just a term of the moment, but today it is considered a potential solution to the society's current problems and it has therefore become a central issue in both the private and public sector. In the first case, the driving force behind innovation is represented by the need to handle the competition and offer products and services that can increase market share and enhance corporate value. In the second case, on the contrary, it is more difficult to define the elements that stimulate innovation in public sector. However, the increasing attempt from governments and public institutions to find a balance between priorities underlines the need of innovative approaches that aim at simplifying the provision of services and obtaining improvements in terms of process, regulations and policies. Pursuing innovative goals is certainly not an easy task for the public sector, which is continuously placed before the judgement of the public opinion and characterized by the traditional risk-averse approach of governments. In this context, the present work aims to illustrate how the public sector can support innovation to serve the citizens efficiently and the influence that the adoption of innovation policies can have on the society. The main subject of this work is

therefore the innovation in the public sector, in particular the methods and measures implemented to reach this objective and the significant example of the German Land Baden-Württemberg as

European and global leader in innovation.

The method used is based on a literature research which includes essays, articles and books on innovation, its diffusion and the importance of technology and organizations for the innovation development and digital documents concerning public support to innovation. Additionally, the description of the situation in Baden-Württemberg relies on the OECD documents, the website of the German Land, in particular of the Ministry of Economic Affairs, Labour and Housing and of the Ministry of Science, Research and the Arts and the material provided by public officials, employed in the research and development area of the Land. After a detailed analysis of the bibliographic sources the general topic about innovation and its diffusion has been introduced and then

contextualized within the framework of the public sector. Through a deductive approach the focus has been moved to the problem linked with innovations in public sector, the different types of innovation in this field and the dimensions in which they develop, to describe then the public measures adopted to support public innovation. Then, theoretical and general considerations have been demonstrated in the practical illustration of the German case, especially through the specific focus on Baden-Württemberg. Also in this case, proceeding from the general to the particular has allowed firstly to contextualize the situation of the German Land within the wider framework of German research and development and then, through the use of graphs, to describe in detail the strategy and innovative measures for which Baden-Württemberg stands out at national and

international level. Finally, knowledge-intensive business oriented services in Baden-Württemberg have been illustrated, with particular attention to their historical role and to the importance of technical services. On the basis of these considerations it has been possible to analyse the

innovation impact, especially the one exerted by digitalisation of knowledge-intensive services and to predict the future consequences of the innovative development in this field.

The aim of this study is to emphasise the importance of innovation in the public sector, in order to satisfy the needs of a constantly changing society ever more efficiently and face future challenges.

This research has showed how the adoption by public institutions of specific measures and strategic policies for the growing support of research and innovation is not only necessary but also urgent, in order to withstand international competition and offer long-term effective solutions to the problems afflicting modern society. The example of Baden-Württemberg has been used to propose a

successful model, based on high investments in research and development and a future oriented approach. Furthermore, this specific case offers the opportunity for a comparison with the situation

In conclusion, this study illustrates the innovative aspects of the public sector and services.

Suggestions for future research therefore concern a further development of these issues in the private sector and in areas such as the economic, industrial and technological field.

Keywords: innovation in public sector, innovation strategies and policies, research and development, Baden-Württemberg, knowledge-intensive services.

Abstract

“Innovation” ist nicht nur ein Schlagwort, sondern sie ist als mögliche Lösung der aktuellen Probleme der Gesellschaft angesehen und ist deshalb zum Mittelpunkt sowohl im Privat- als auch im öffentlichen Sektor geworden. Im erstgenannten Fall ist der Motor der Innovation durch die Notwendigkeit dargestellt, wettbewerbsfähig zu sein und Produkte und Dienstleistungen

anzubieten, die den Marktanteil erhöhen und den Unternehmenswert steigern können. Im zweiten Fall ist es jedoch schwieriger, die Elemente zu definieren, die Innovation im öffentlichen Sektor anregen. Die zunehmende Suche der Regierungen und öffentlichen Einrichtungen nach einem Gleichgewicht zwischen Prioritäten unterstreicht allerdings den Bedarf an innovativen Ansätzen, die auf die Vereinfachung von Dienstleistungen und die Verbesserungen im Bereich der Verfahren, Bestimmungen und Richtlinien zielen. Die Verfolgung innovativer Ziele ist sicherlich keine leichte Aufgabe für den öffentlichen Sektor, der von der Öffentlichkeit ständig ausgewertet wird und durch den traditionellen risikoscheuen Ansatz gekennzeichnet ist. In diesem Zusammenhang zeigt die vorliegende Arbeit die Maßnahmen zur Förderung von Innovation, die der öffentliche Sektor ergreifen kann um seinen Bürgerinnen und Bürgern wirksam zu dienen und auch den Einfluss, den die Verabschiedung der Innovationspolitik ausüben kann. Das Hauptthema ist daher die Innovation im öffentlichen Sektor, insbesondere die implementierten Methoden und Maßnahmen zur

Innovationsförderung in diesem Bereich und das signifikante Beispiel des Bundeslandes Baden- Württemberg als europäischer und globaler Innovationsführer.

Die verwendete Methode beruht auf einer Literaturrecherche, die Essays, Artikel und Bücher über Innovation, ihre Diffusion und die Bedeutung der Technologie und Organisationen für

Innovationsentwicklung umfasst und auch digitale Dokumente über öffentliche Unterstützung für Innovation. Außerdem, basiert die Darstellung der Situation in Baden-Württemberg auf den Dokumenten von OECD, der Webseite des Bundeslandes, insbesondere vom Ministerium für Wirtschaft, Arbeit und Wohnungsbau und vom Ministerium für Wissenschaft, Forschung und Kunst und auf dem Material, das von den im Forschungs- und Entwicklungsbereich tätigen Beamten des Bundeslandes zur Bereitstellung wurde. Nach der detaillierten Analyse der bibliographischen Quellen wurde das Hauptthema der Innovation eingeführt und in den Zusammenhang des

öffentlichen Sektors eingeordnet. Danach, wurde der Schwerpunkt durch eine deduktive Methode auf das Problem verlagert, das im Verbindung mit den Innovationen im öffentlichen Sektor und den verschiedenen Arten von Innovation auf diesem Gebiet steht. Außerdem, wurde es analysiert, wie dieses Problem sich ausweiten kann und die staatlichen getroffenen Maßnahmen zur Förderung von Innovation im öffentlichen Sektor. Theoretische und allgemeine Überlegungen wurden dann im praktischen Beispiel von Deutschland nachgewiesen, mit besonderem Schwerpunkt auf Baden- Württemberg. Auch in diesem Fall erlaubte das vom Allgemeinen ins Einzelne Verfahren zunächst die Lage des Bundeslandes in den breiteren Rahmen der Forschung und Entwicklung Deutschlands einzuordnen. Zweiten ermöglichte dieser Vorgang, durch die Verwendung von Grafiken, die

Strategie und die innovativen Maßnahmen konkret zu beschreiben, für die Baden-Württemberg sich auf nationaler und internationaler Ebene zeichnet. Abschließend wurden wissensintensive

unternehmensorientierte Dienstleistungen im Innovationssystem von Baden-Württemberg erläutert, mit besonderem Augenmerk auf ihre historische Rolle und Schwerpunkt auf die Wichtigkeit von technischen Diensten. Auf der Grundlage dieser Erwägungen war es möglich, die Auswirkungen der Innovation zu analysieren, insbesondere diejenigen von der Digitalisierung der wissensintensiven Dienstleistungen, sowie die zukünftigen Folgen von der innovativen Entwicklung vorherzusagen.

Das Ziel dieser Arbeit ist, die Bedeutung von Innovation im öffentlichen Sektor zu unterstreichen, zur effizienteren Befriedigung der Bedürfnisse einer ständig verändernden Gesellschaft und um sich auf künftige Herausforderungen vorzubereiten.

Diese Studie zeigt, wie die Annahme spezifischer Maßnahmen und Strategien zur verstärkten Unterstützung von Forschung und Entwicklung nicht nur notwendig ist, sondern auch dringlich, um im internationalen Wettbewerb zu bestehen und wirksame Langzeitlösungen für die Probleme der modernen Gesellschaft zu bieten. Das hier verwendete Beispiel von Baden-Württemberg stellt ein Modell dar, das auf hohen Investitionen in Forschung und Entwicklung und einem

zukunftsorientierten Ansatz beruht. Darüber hinaus bietet dieses konkrete Beispiel auch die Möglichkeit, einen Vergleich mit der italienischen Situation zu ziehen und insbesondere mit den innovativen Maßnahmen, die die italienischen öffentlichen Einrichtungen ergreifen, um sich mit den Problemen der Zukunftssektoren der Wirtschaft zu befassen. Die vorliegende Arbeit lässt daher die Frage offen, ob das Modell des Bundeslandes im italienischen Kontext angewendet werden kann und wenn ja, für welche Region/en es am besten geeignet ist.

Zusammenfassend kann es gesagt werden, dass diese Arbeit die innovativen Aspekte des öffentlichen Sektors und der Dienstleistungen veranschaulicht. Richtungen für die zukünftige Forschung betreffen daher die Weiterentwicklung dieser Themen im Privatsektor und in Bereichen wie Wirtschaft, Industrie und Technologie.

Schlüsselwörter: Innovation im öffentlichen Sektor, Innovations- Strategien und Politik, Forschung und Entwicklung, Baden-Württemberg, wissensintensive Dienstleistungen.

TABLE OF CONTENTS

INTRODUCTION …... 1

CHAPTER 1. THE CREATIONI OF INNOVATIONS …... 3

1.1 Introduction …... 3

1.2 The Development of Innovation Theories …... 4

1.3 The Process of Innovation-Development …... 6

1.4 The Process of Innovation-Decision …... 9

1.5 The Attributes of Innovations …... 15

Compatibility …... 17

Complexity …... 18

Trialability …... 19

Observability …... 19

Fuzzy boundaries …... 19

Risk …... 19

Task issues …... 19

Knowledge required to use it …... 19

Augmentation/support …... 20

1.6 Rate of Adoption …... 20

1.7 Diffusion of Innovations …... 22

Innovation …... 24

Communication Channels …... 24

Time …... 25

Social System …... 28

1.8 Conclusions …... 32

CHAPTER 2. TECHNOLOGICAL DEVELOPMENT, ORGANIZATIONS AND INNOVATION IN THE PUBLIC SECTOR …... 34

2.1 Introduction …... 34

2.2 Technology Definition …... 34

2.4 Diffusion of Technology …... 39

2.5 Organizations …... 42

Agenda-setting …... 44

Matching …... 44

Redefining/Restructuring …... 44

Clarifying …... 45

Routinizing …... 45

2.5.1 Companies Categories and Innovation Strategies …... 45

2.6 Innovation in the Public Sector …... 50

2.6.1 Reasons for Innovation in Public Sector …... 51

2.6.2 Types of Innovation in the Public Sector …... 53

2.6.3 Supporting Innovation in the Public Sector …... 57

2.6.4 Context Antecedents for Innovation's Assimilation …... 60

2.6.5 The Openness of Firm's Innovation Activities …... 62

2.6.6 Public Support to Innovation …... 63

2.7 Conclusions …... 65

CHAPTER 3. THE INNOVATION LEADERSHIP OF BADEN-WÜRTTEMBERG ... 67

3.1 Introduction …... 67

3.2 Public Administration Reform in Germany …... 68

3.3 The Importance of Research and Innovation in Germany …... 72

3.4 The Case Study of Baden-Württemberg …... 74

3.4.1 Baden-Württemberg's Primacy in Scientific Research …... 76

3.4.2 The Innovation Strategy of Baden-Württemberg …... 79

The Key to Success …... 83 „Wirtschaft 4.0“ …... 83

Cluster Policy …... 84

3.4.3 Consequences of the Innovation Policy and Future Challenges …... 85

3.4.4 Innovation Awards in Baden-Württemberg: „Innovationspreis“ and „Innovationsgutscheine“ …... 91

Innovationspreis Baden-Württemberg – Dr.-Rudolf-Eberle-Preis …... 91

Innovationsgutscheine …... 91

3.5 Conclusions …... 103

CONCLUDING REMARKS AND FUTURE PERSPECTIVES …... 105

BIBLIOGRAPHY …... 112

INTERNET SOURCES …... 125

INTRODUCTION

Innovation skills and the ability to develop and implement new ideas in economic fields have increasingly become fundamental elements to ensure economic success and long-term growth. In this context, there is growing evidence that innovation represents a crucial factor to withstand competition and stand out at national and international level. The increasing interest on the role of innovation as a growth engine in contemporary knowledge-based economies (OECD, 1996; Quah, 1998) has highlighted the importance of innovation policies, but the measures considered to be the most suitable depend on the theory of innovation that is adopted (Rossi et al., 2009). In this context, the more recent literature on innovation theories focuses on systems thinking. This perspective goes further than the traditional linear model of innovation, that focused only on the support to R & D as the key driver for the creation of new products and services. It also identifies barriers to innovation not simply in terms of a „market failure , in which an expensive innovation is difficult to be ‟ adopted because it is associated with social instead of private benefits. On the contrary, the more recent perspective extends the rationale to include the idea of a broader „systems failure of the ‟ overall innovation environment, that can comprise institutional, regime and infrastructural failures (OECD, 2002). Systems approach does not underestimate the function of R & D for the

development of innovation, however it depicts a wider and more complex scenario of the key factors and barriers to innovation. According to this recent line of thinking, the innovation process is represented by the interplay of different actors, through market systems and flows of knowledge within a pro-innovation institutional framework. This highlights the need for an effective policy that can support innovation by improving the institutional context and the interaction possibilities (OECD, 2002). In this respect, not only the discourse on innovation has progressed, but also the issue related to innovation policies, especially in Europe (Mytelka and Smith, 2002). In accordance with a systemic approach, the European Commission has established the need for innovation policies that support not only basic scientific research and its results, but also firms activities and the social and institutional framework in which they are active (EC, 2003). The increasing focus on social relationships as a driver for innovation has resulted in the growing support to aggregations of organizations or clusters and cooperation networks among different actors (Audretsch, 2002; EC, 2003; European Council, 2000).

Although a growing concern for this subject and the strong incentives to foster innovation policies, elaborating measures that reflect a systemic approach to innovation in many cases still remains a challenge (Russo and Rossi, 2009). It is true that converting general theories into practical strategies is a difficult task and since innovation is by its nature a complex process it can not be supported without considering its surrounding environment. Therefore, innovation theories should not result in general polices, but rather help policymakers in developing measures that fit their social, economic and institutional contexts (Russo and Rossi, 2009). This stresses the need for a local character to ensure the success of innovation policies, that should therefore be "rooted in localities identified by sets of relations within specific communities of people, firms and institutions" (Bellandi and Di Tommaso, 2006). However, it is not always easy to gain insight into intricate, multifaceted

innovation processes, which often include a wide range of different actors. The first step to be taken is therefore to clearly understand both theoretically and empirically the dynamics of these processes and the context in which they occur. The issue is even more complicated when dealing with

innovation in the public sector, since governments are often characterized by a traditional risk- averse approach and public institutions are constantly subject to the public opinion. Hence, the present work aims at answering the question on how the public sector can support innovation to ensure an efficient service to citizens and what are the essential elements of successful innovation policies that can benefit the society as a whole.

In other words, is innovation easy to be implemented in the public sector? To answer this question, this study considers multiple factors that can influence public service innovation and it tries to illustrate the favourable framework conditions to provide innovative solutions in public places. In this regard, an interesting question was raised By Partson in 2007, who wondered if innovation- oriented policies could be afforded only by politically mature and economically developed countries (Partson, 2007). Through a detailed analysis of the subject it will be sought to give an answer to this question.

The choice of this subject comes from the increasing relevance it has been given in recent years.

Within a framework of constant change, innovation in public sector has with no doubt become a core issue of public management research and the growing challenges of the present and the future highlights the increasing need to focus on innovative solutions. Innovation has thus turned out to be the successful recipe to ensure long-term economic growth and face national and international competition. The main subject of the present work is therefore the support to innovation in the public sector, with a particular focus on the measures adopted for this purpose and the case of the German Land Baden-Württemberg as European and global leader in innovation. The objective is to emphasise the importance for public institutions to adopt specific policies that are targeted to the support of research and innovation. This objective is pursued through the description of the reasons for innovation in the public sector and the different methods that governments can implement to develop innovative solutions. The example of Baden-Württemberg aims at providing a successful innovation model based on high investments in research and development and a future oriented approach.

The method used is based on a literature research that includes essays, articles and books on innovation, its diffusion and the role of technology and organizations for the development of innovations. The section dedicated to innovation in the public sector relies on digital documents concerning the strategies of public support to innovation. Additionally, the situation of Baden- Württemberg has been described with the help of OECD documents, the website of the German Land, in particular of the web portals of the Ministry of Economic Affairs, Labour and Housing and of the Ministry of Science, Research and the Arts and on the basis of the material provided by public officials employed in the research and development area of the Land.

In the first chapter an overview of the literature on the evolution of innovation theories is provided, then the concept of innovation is introduced and its development process and diffusion are

illustrated following Rogers' analysis. In the second chapter, through a deductive approach the focus is moved to the central subject and innovation is contextualized within the framework of the public sector. The different types of innovation in this field and the dimensions in which they develop are presented to describe then the measures adopted to foster public innovation. In the third chapter, the theoretical guidelines on how to support innovation in public sector are exemplified in the German context and especially in the innovative attitude of Baden-Württemberg. By proceeding from the general to the particular, the situation of the German Land is firstly analysed within the wider framework of the German research and development and then its specific innovative strategy and measures to support innovation are described to show its success at national and international level.

Finally, the attention is focused on knowledge-intensive business oriented services and on their historical role in Baden-Württemberg and particularly on the importance of technical services. In this context, the effects of innovation of knowledge-intensive services are illustrated by outlining the impact of digitalisation and the future implications of an innovative approach in this field.

The present study has thus allowed to illustrate how innovation can be supported and implemented in the public sector. The presentation of Baden-Württemberg as innovation leader has enabled to emphasize the importance of efficient innovation policies and the effects they can have at national and international level. Future directions of Baden-Württemberg's innovation policy together with

CHAPTER 1

THE CREATION OF INNOVATIONS

1.1 Introduction

The definition of innovation has raised many debates and problems and still today it is difficult for many organizations not only to define it but also to find strategies to create, adopt and diffuse new ideas. What is sure and commonly shared by the scholars is that innovation is the capability of making difficult things easy. As pointed out in Kaderdina and Palmer, innovation is indeed "a collaborative, structured process that involves different parts of the organization and outside partners creating and exploiting new opportunities and finding new ways to solve complex

problems" (Kaderdina and Palmer, 2017). From the nature of the innovation process it appears that the simple creation of new ideas can not be considered innovation. Innovations in fact require the practical application of new ideas in a way that generates value. Additionally, the diffusion of innovations has been subject to several studies that analyse it on the basis of different dimensions, such as the historical, sociological, economic and network theoretical (Hall, 2004). The adoption of an approach rather than another depends on the field of research in which the analysis will be used, however it is clear that the different research areas can interact with each other and findings in one field can be useful also in other sectors.

For the purpose of the present work the overall literature on innovation theories will be only briefly outlined and then the main concepts related to innovations will be explained following the analysis of Rogers. Since the central theme of this study concerns the support of innovation in public sector organizations, the approach adopted limits to the definition of innovation from a sociological and organizational perspective, which is most represented by Rogers' book “Diffusion of Innovations”.

In this book he adopts indeed a sociological approach, but he also considers the role played by economic factors and the strategies adopted to implement innovations.

Therefore, on the basis of Rogers' key ideas this chapter aims at giving a clear understanding of innovations and defining their role and function in the modern society. The chapter starts with a brief outline of the development of innovation theories, that provides an historical overview of the several studies and contrasting approaches to the subject. Secondly, the concept of innovation is introduced through the description of the processes that lead to its the development and decision, then its main features are illustrated and finally the focus is put on the process of diffusion of innovations and the essential elements that allow new ideas to diffuse. In this context, different categories have been identified on the basis of the time of adoption and social factors that can influence diffusion have been described. Finally, the consequences of innovations are briefly explained in order to underline the effects that new ideas can have on individuals or social systems.

This chapter aims therefore at introducing the subject of the present study by contextualising it within the general framework of innovations. It provides indeed the essential background information concerning the creation, development and diffusion of innovations, thus giving introductory concepts and a general overview of the importance of innovations.

1.2 The development of Innovation theories

Innovation theory can not be ascribed to one single research area or discipline, but it is rather subject of research of several different academic fields. The earliest studies on innovation date back to the 1930s, when the first theoretical approaches identified the concept within a linear, simple and one-way process represented by the subsequent steps of basic and applied research, technology development and finally diffusion.

This perspective has been defined “linear model” and it assumes that the course and success of an innovation is determined essentially by science progress, thus focusing on an increasing

concentration of resources on R & D, with the aim of promoting the creation of innovations and new technologies (Greenacre, Gross and Speirs, 2012). This model was largely used to give reason to public investments in science and R & D and it starts from the assumption that innovation is applied science. Hence, science comes first, then development and in the end it is the turn of production and marketing (Fagerberg, 2004).

This approach, also defined supply-push, was replaced by a new model which started to spread in the 1950s and promoted innovation activity by focusing on the importance of demand for products and services rather than on science progress. This perspective, which is known also as demand-pull, and the supply-push one have been acknowledged for their contribution to the study of innovation.

However they were criticised as highly simplistic models and were overcome in the second half of the 20^th century by three new approaches, which in their turn have the merit of introducing essential concepts that are still relevant nowadays. The first two are the evolutionary and path-dependent models, which focus on the influence of past decisions on the present innovation. With the

evolutionary model the concept of “uncertainty” was firstly introduced in the process of innovation and the lack of skills of decision makers in collecting and dealing with information was firstly theorized through the idea of “bounded rationality”. With the introduction of these two terms the evolutionary model stressed the general tendency to support gradual changes to already existing products or processes instead of drastic and radical ones (Greenacre, Gross and Speirs, 2012).

The path-dependent model was based on the assumption that innovation was more likely to be further implemented if it was firstly adopted by the users or by a well-established institution. This perspective associated therefore increasing returns with adoption and resulted in cost reductions and gradual improvements. However, this process could lead to overestimate technology at the expense of institutional activity and produce a “lock-in” effect of technologies and systems and a following

“lock-out” effect of innovations which could be more useful.

The third model which characterized the second half of the 20^th century is represented by the induced innovation model, that views changes in relative prices as the driving force behind innovation.

Alternatives to these three models were developed in the last years of the 20^th century and they were characterized by a shift from a linear to a “systems perspective”, with the aim of describing more precisely the complex nature of the innovation process. Also the systems model has been

represented by several different approaches that however share some common features, including the flows of knowledge between actors, predictions about future developments of technology, market and policy, the risk associated with politics and regulation and the influence of institutional structures (Greenacre, Gross and Speirs, 2012). Generally, the systems perspective focuses on the importance of not only the creation of an innovation, but also of its diffusion and use (Geels, 2004).

One of the most representative theories of the systems perspective is the Technological Innovations Systems approach, whose main focus is not limited to the structural elements involved in a system and its framework but it extends to the dynamic relationships between the components of that system and with the transfer of knowledge.

Another step forward in the evolution of innovation theories has been represented by the development of research into a new perception of technological change, seen no longer as incremental and progressive, but as a dramatic, impactful and sometimes drastic alteration of products and services. In this context, technological and market niches become significantly relevant to develop an innovation and protect it from the forces of the normal market (Greenacre, Gross and Speirs, 2012).

The progress of innovation theories has lead to the conception of innovation not only as result of the support and investment in technological R & D, but rather as the interplay of different actors in fostering new ideas within an institutional context where policy plays a key role. As stated before, the systemic perspective of innovation theories has been characterized over the last twenty years by several connected approaches, that even if different in the details, share a common perception of innovation as a dynamic, complex process marked by the interactions between actors and

institutions, market relations and flows of knowledge within a framework of uncertainty. According to this approach, individual knowledge or the knowledge of a firm is affected by external conditions and it is created not only from a firm's activities, but also from its relationships with suppliers and research institutions such as universities. Lundvall (1988) introduced the relevant concept of learning by interactions to represent the complex interconnections that characterised the system approach and which has become fundamental to understand innovation in networks. To support the idea of interactions between actors, Beije (1998) highlighted that in the system perspective the success of an innovation is strictly connected with the actions of other firms and organizations (Beije, 1998).

In this context, it is not surprising that one of the recurrent subjects of modern studies on innovation is the assumption of a well-articulated system of interconnections between a firm and the external circumstances, rather than a single, independent decision-making unit limited to the firm itself.

Kemp classifies the environment with which the firm interacts into two different levels: the first one is represented by the relationships between the firm and its close network of customers and

suppliers. The second level is associated with a wider system of interactions that influence the firm's attitude. This level is associated with the socio-cultural context, the institutional and organizational conditions, infrastructures, the transfer of knowledge, etc. (Kemp, 2000).

As a result, the modern approaches on innovation tend to stress its systemic nature, thus explaining why technological shift is usually a slow process that can hardly be influenced (Hekkert et al., 2006). According to the modern theories, technological change depends therefore not only on the competition between different technologies, but also between whole innovation systems (Greenacre, Gross and Speirs, 2012).

As stated in the introduction, the first chapter of this work will present the concept of innovation and its related concepts by following the perspective of Rogers, thus focusing mainly on a sociological and organizational analysis of the theme. The choice to illustrate innovation through the ideas exposed in Rogers' book “Diffusion of Innovations” is dictated mainly by the fact that his theory represented a touchstone in the studies on innovation and, although its limits, it has

represented a reference point and a solid basis for many scholars and the development of research.

Innovation is daily bread of modern times, today it is part of everyday life and it will continue to permeate all sectors. This explains why the Diffusion of Innovation theory has still great relevance at the present time and will not lose it in the future. It is commonly accepted that this theory has the advantage of collecting thousands studies. Rogers indeed reviewed a large number of empirical data and starting from them he was able to develop existing generalizations into a deep, consistent summarised theory. As agreed by many researchers who followed him and took him as inspiration for their studies, Rogers' findings were perfectly in line with the results of concrete surveys and persuasion experiments and his perspective was characterized by its practicability. This explains

Despite the strengths of Rogers' theory, it is possible to identify some of the weaknesses that made it necessary to further develop it. First of all, the Diffusion of Innovation theory represents a linear and source dominated model, in which communication is perceived only through the eyes of a decision-making elite who decided to diffuse an innovation.

Furthermore, Rogers overlooked the role played by media and simply affirmed that they can influence innovators who influence opinion leaders, who in their turn influence potential adopters.

Thus, he did not consider the power of media as promoters of group discussions conducted by change agents. He also took for granted that innovation was accepted by all groups, thus including in his research also groups who actually were not favourable to it (Afolayan, 2012).

However, Rogers' theory still remains one of the most referred to within the framework of sociology and organizational literature and communication studies. His model is one of the most frequently cited and it is indeed possible to find reference to Rogers in almost all further research studies on innovation, by both scholars who followed his model such as Nutley et al. (2002) and Greenhalgh et al. (2004), but also by those who criticized his approach, such as Botha and Aktins (2005) and Smith et. al (2008). Since the main goal of the present work is not to discuss about innovation theories, but rather to explain how to successfully foster innovation in the public sector, this first chapter will focus mainly on one approach and namely on the one which is considered the most useful to the further development of the theme within a social and public framework. For this reason, Rogers' analysis has been followed.

1.3 The Process of Innovation-Development

The process of innovation-development starts from the identification of a need or problem and it is based on decisions and measures taken to solve it through research and development of an

innovation. Then it is followed by the spread of the innovation, its adoption by users and finally by the consequences of its diffusion (Rogers, 1983). In the following paragraph the main phases of the innovation-development process will be discussed on the basis of Rogers' analysis.

As stated above, the first stage of the process of development of an innovation is represented by the recognition and identification of a problem or need, which encourages research and development in order to find out an innovation that can solve it (Rogers, 1983). In some cases scientists can start research as a response to a particular problem; in other cases an issue may be raised as a social problem of national priority and in this case it is dealt with by political activity (Rogers, 1983).

The second stage in the innovation-development is characterized by basic and applied research.

Most innovations are related to technology, therefore we can define them as technological innovations. Technological innovations are created mainly from the combination of scientific research and practical activities. The scientific research consists in the surveys that are not carried out to solve practical problems but have science progress as main purpose. This kind of research is defined as basic research and it differs from applied research, that on the contrary is used with the aim of solving practical problems. The two different types of research are usually combined, so that an invention¹ can occur as a sequential process based on basic research and applied research that finally lead to development (Rogers, 1983).

The third stage of the process is represented by development. Development usually occurs in the acronym R & D and this explains the close link between research and development. Development indeed is always preceded by research and these two phases are closely related in the process of innovation-development. However, in order to better illustrate it, development will be considered as a separate stage from research. In this regard, development can be expressed as the process through which an idea is shaped into an innovation in order to meet the needs of a target of potential users (Rogers, 1983). This stage follows research but comes before the innovation that results from research. The creator and developer of a new idea has to deal with a high degree of uncertainty, since he/she has to face not only the problems related with the development of an innovation, but also the problems of other individuals or organizations that might be the potential final adopters of the innovation he/she is creating (Rogers, 1983).

Moreover, there are many other factors which influence the final outcome of an innovation, such as the behaviour of the other members of the R & D team, competitors and government policies.

This explains why the innovation-development process is driven by the exchange of information.

Many are indeed the information needed in the R & D stage, for example data about the

performance of the innovation that is being developed and launched into the market, details about the components and materials used in the innovation, information about the projects of competitors, the possibility to protect the new coming innovation and the problems of potential adopters that are expected to be solved with its development (Rogers, 1983). Thus the importance of information exchange in a process characterized by an high level of uncertainty.

Baker and Sweeney analysed the development stage applied to high-technology industries and further divide this phase into 4 steps:

• Innovation: the period characterized by an high level of uncertainty where experiments, research and problem-solving lead to the creation of the innovation.

• Imitation: the step in which the innovation is refined through R & D and marketing. Many new firms in the same field develop their own versions of the innovation and this leads to decreasing uncertainty.

• Technological competition: during this step the innovation is further improved by the R & D departments creating competition among firms. As a consequence, firms which are not able to make progress on the existing innovation are forced out of the market by the competition.

• Standardization: the process through which the optimal product is finally obtained and the focus shifts towards the improvement of its production and the extension of its life cycle.

The technological competition therefore becomes a price competition (Baker and Sweeney, 1977).

The fourth step of innovation-development consists in commercialization. Rogers defines commercialization as the production, manufacturing, packaging, marketing and distribution of a product which incorporates an innovation (Rogers, 1983).

Commercialization is usually the result of a process of technology-development based on research activities that lead to a scientific/technological innovation. However, there are also innovations which result from the attempt to put into practice new solutions to solve particular needs or problems. Medical innovations for example are usually the result of research and development activities, but it can happen that they come from the experts effort to implement new solutions.

Other examples of innovations arising from practice are to be found in agriculture, public

Commercialization is followed by diffusion and adoption. According to Rogers, diffusion represents the most important phase in the process of innovation-development. Diffusing the innovation within a short time may be necessary in order to solve urgent problems/needs of social relevance. It can happen indeed that the research activities to create the innovation have been covered by public funds, hence the urgency to make the innovation adopted by the public of users.

On the other hand the institutions that release the innovation have to take into consideration that their positive reputation is based on solutions which will bring benefits to their adopters. For this reason, the translation of scientific research into the final result and its diffusion is a process that requires time and effort and scientists are aware of the difficulties that this involves (Rogers, 1983).

Diffusion will be discussed more in detail later in this chapter. The innovation-development can not be described simply as the result of scientific research that is created to solve a particular

problem/need and then diffused to users and adopted by them in an unchanged way.

A more faithful picture of this process is the one given by Braun and MacDonald, according to which "A technological innovation is like a river—its growth and development depending on its tributaries and on the conditions it encounters on its way" (Braun and MacDonald, 1978). This means that an innovation is often reinvented by its users and some of its distinctive features such as price, size and functioning are defined by the researchers on the basis of the requests made by the adopters. For this reason, it would be wrong to consider the R & D phase and the diffusion/adoption phase as two separate stages (Rogers, 1983).

As stated before, diffusion is one of the essential moments in the process of developing an

innovation and that is also because in this stage there should be a close relationship between the R

& D department and the agencies responsible for the diffusion of the innovation. Researchers and diffusers may have different points of view on the innovation and this can lead to possible conflicts on the decision to diffuse a new idea (Rogers, 1983). Organizational problems may arise, for example when the diffusion of an innovation starts even before all the research has been

accomplished, or the research and diffusion of a new idea are supported by an organization in one country but not by a branch organization in another country. In order to avoid these troubles the connection between the research and the diffusion phase is of the utmost importance, but it is also necessary to create cooperation and collaboration between different state's systems and between private firms and public organizations (Rogers, 1983). This explains why the diffusion of an

innovation is not just a stage that automatically follows commercialization, but it is rather the result of a decision that can often be problematic and difficult.

The last phase in the innovation-development process is represented by the consequences, namely its final result. At this stage the problem/need which has made the process start is either solved or not solved by the innovation. During the process of development there may be obstacles caused by the innovation itself and this makes a new development process begin.

The six major phases in the innovation-development process have been analysed following a progressive order. However, there are cases in which some of the described phases may not occur in the process or they follow a different order (Rogers, 1983).

The process of innovation-development by Rogers has been widely accepted and followed by many researchers and despite the differences in the several theories on innovation, it is possible to identify some stages of the process of development of new ideas, that even if defined differently are shared among the theories. These stages include basic and applied R & D, followed by a demonstration stage, where prototypes are often developed and financed through R & D incentives. Then, there is a pre-commercial stage of development in which the first technological prototypes start to be applied or are implemented on a larger scale. This is followed by a commercial stage, where innovation is progressively marketed through financing measures and if it passes this test innovation can go through a final commercial stage, where it can be diffused and fall within the broad regulatory framework (Foxon et al., 2005). Rogers' analysis of the innovation-development process is a clear representation of these stages. However, these stages nowadays are no longer perceived as a one direction, linear model, but the development of innovation theories has lead to the common agreement that knowledge flows in both ways. This explains that the traditional incentives of technology-push coming from R & D and of market-pull from customer demand can be affected by feedbacks between the different stages of the process and by the context, represented for example by government policy and risk capital (Greenacre, Gross and Speirs, 2012).

1.4 The Process of Innovation-Decision

Wolfe (1994) identified a series of models to describe the innovation-decision process, that differed in the number of stages, but were overlapping for what concerns the content. The five-stage model developed by Rogers (1995) has been the most adopted (Nutley et al., 2002) and it is represented by the measures taken by individuals or organizations in order to assess an innovation and by the following decision to put it into practice or not and to diffuse it. It involves therefore different steps from the research of an innovation, through its evaluation and choice to adopt it or not, to the final decision to implement it and the confirmation of this last step (Rogers, 1995). Uncertainty is a fundamental aspect of this process, since it always occurs when deciding to introduce a new idea. It is exactly the uncertainty inherent in the novelty of the proposed idea that distinguishes the

innovation-decision process from other kinds of decision making.

As explained above, the innovation-decision process is not natural and immediate, but on the contrary it is composed by sequential steps and rational evaluations. The five progressive phases identified in Rogers' model to describe the innovation-decision process are:

1. Knowledge represents the first moment when the individual or the organization becomes acquainted of the existence of the innovation and starts gaining insight into its functioning.

2. Persuasion is the stage of formation of a particular attitude toward the innovation by the individual or the organization. The opinion formed can be positive or negative.

3. Decision is represented by all the evaluations made by the individual or the organization in order to make a choice: adopt or reject the innovation.

4. Implementation is the stage in which the innovation is put into practice.

5. Confirmation is the attempt by an individual or an organization to get support and obtain agreement on a decision about an innovation which has already been made. If the previously taken decision is criticized and gets a negative feedback it can happen that the decision-

In the following section the stages of the innovation-decision and the attitude adopted by the decision-making unit in every phase of this process will be described more in detail.

Figure 1.2. The process of innovation-decision (Rogers, 1983)

As stated above, knowledge represents the first phase of the model. There are different types of knowledge that are needed by the individual to decrease uncertainty of an innovation. Once aware of the existence of an innovation, the first questions an individual asks him/herself are: “What is the innovation?” “How does it work?” and “Why does it work?”. For this reason Rogers identifies firstly an awareness-knowledge that leads to how-to knowledge. How-to knowledge is represented by the search for information about the proper use of an innovation, since the adopters have to know how to deal with it in a proper way. The more complex the innovation the more how-to knowledge is needed in order to better understand how to use it properly. Furthermore, this kind of knowledge is fundamental for the following stages and if a good level of how-to knowledge is not reached before the start of the procedure interruptions and rejections are likely to happen.

Another type of knowledge mentioned by Rogers is the principles knowledge, namely the data concerning the rules of functioning of the innovation. This kind of knowledge is not fundamental in order to adopt an innovation, however the lack of understanding of the principles which underpin an innovation can lead to problems with its use and cause obstacles in the overall process (Rogers, 1983).

The second stage of the model of innovation-decision is represented by persuasion². As explained before, in this phase the decision-making unit forms a positive or negative attitude³ concerning the innovation. Rogers underlines that this stage is defined by higher psychological involvement, since he/she tries to find information about the new idea, interprets and selects them in order to develop his/her perception of the innovation. For this reason the persuasion stage is characterized by feelings and the mental activity which prevails is affective. The knowledge stage on the contrary is mainly represented by a cognitive/knowing way of thinking (Rogers, 1983).

2 Rogers uses the term persuasion to mean the attitude formation and change by an individual, but not necessarily

During this phase the individual projects the new idea into the future in order to see if it can be applied and this helps him/her in developing a favourable or unfavourable attitude toward the innovation. This explains why future thinking is a skill needed at this stage in order to face uncertainty and unexpected results. In this respect, the individual looks for evaluation of his/her attitude by his/her peers in order to be sure he/she is proceeding in the right way.

He/she therefore tries to obtain social support to the new idea, so that it can be easier to confirm his/her position toward it and to reduce the uncertainty related to its consequences. One of the main questions that is being asked at this stage is indeed “What are the innovation's consequences?”

(Rogers, 1983) and if the answer comes from a peer who evaluates the proposed new idea, then this influences the individual in the formation of the attitude toward the innovation.

The result of persuasion is a favourable or unfavourable attitude which leads respectively to

adoption or rejection of the new idea. However, attitudes and actions in many circumstances do not match and a positive attitude toward an innovation for example does not always reflect in its adoption. For this reason, Rogers stresses that creating an attitude does not automatically imply taking the decision to adopt or reject the new idea, but attitudes and following actions should in principle be consistent (Rogers, 1983).

Persuasion is followed by the decision phase. This stage is represented by all the actions taken by the individual or the organization in order to take a position on the new idea: adopt or reject it.

Adoption is the approval of the innovation and the choice to use it and support it as the best thing to do. Rejection, on the contrary, refers to the choice not to approve the innovation. The majority of people prefer to try the innovation before deciding to adapt or reject it, since testing it can represent an useful method to try to reduce the uncertainty of its consequences.

Rogers defines it as a “small-scale trial” which in most cases leads to the adoption of the new idea and it is fundamental to prove the usefulness of the new-born creation and make the adopters feel confident with it. The possibility to try an innovation before the decision, for example through the distribution of free samples of the new creation usually allows to adopt it more rapidly. The trial before decision aims at promoting the new idea in the society and this method is proved to be quite effective in speeding up the adoption of the innovation, especially if the new idea is sponsored by an opinion leader (Magill and Rogers, 1981). However, there are situations in which the innovation can not be tested before, so it has to be adopted or rejected as a whole.

In this respect it must not be forgotten that the decision to adopt or reject the new idea can occur at each stage of the process. An innovation for example can be rejected soon after becoming aware of it because it has been forgotten during the knowledge stage, or after it has been decided to adopt it during the confirmation stage (Rogers, 1983).

Eveland identifies two different types of rejection which correspond to two different kinds of behaviour:

1. Active rejection, in which the adoption of the innovation (and also its trial) is initially taken into account but later it is abandoned.

2. Passive rejection (or non-adoption), in which the decision to adopt the innovation is actually never taken into consideration (Eveland, 1979).

There is often the tendency to present the first three stages of the innovation process in sequence.

However, Rogers points out that the process does not always follow the order knowledge-

persuasion-decision and in social systems for instance the decision stage can precede persuasion. As he stresses, the culture may influence the order in which then stages occur in the innovation process (Rogers, 1983).

The fourth phase of the model is implementation. At this stage the innovation is finally put into practice and while the stages before implementation are mainly characterized by a mental approach, this involves a change of behaviour, since the new idea is eventually implemented.

This phase usually occurs after the decision stage in the innovation process, however it can be hindered by some problems in terms of use of the innovation. The decision to adopt a new idea is indeed different from putting it into practice and the individual should always consider the uncertainty of the innovation consequences, a fundamental aspect that still remains even after the decision to adopt has already been made. Difficulties in implementing the new idea are more likely to occur when an organization rather than an individual is involved in the adoption of the new idea.

In organizational systems more subjects take part in the decision-making process and the persons in charge for the decision are usually different from the group responsible for the implementation of the new idea. Moreover, the structure underlying the organization may be opposed to putting the innovation into practice.

The main questions that the decision making unit wants to answer at the implementation stage are

“Where do I obtain the innovation?”, “How do I use it?” and “What operational problems am I likely to encounter and how can I solve them?” (Rogers, 1983). For this reason, the search for information is more concentrated on the implementation phase. The length of the implementation stage varies depending on the type of innovation. In any case the implementation continues until the new idea loses its separate identity and becomes part of the daily routine of the adopters. At this point the innovation distinctive features are institutionalized and turn into general rules, whose application becomes common among users.

For this reason, this point is identified as the implementation end and it can be defined also as routinization or institutionalization (Rogers 1983). As Rogers specifies, the end of the

implementation may also coincide with the end of the innovation-decision process, but in other cases this stage is followed by confirmation.

In some cases the adoption of an innovation implies copying exactly an innovation and replicating the way in which it had been used in a different context. However, innovation in many other cases does not diffuse in a static and unchangeable way and this explains the concept or re-invention, namely the change or modification of an innovation on the part of an user at the adoption and implementation stage (Rogers, 1983). There are different positions on re-invention. Research and development agencies do not see it in a positive light and judge it a distorted version of their original project. They are usually against re-invention also because they consider themselves to be the only ones who have the best knowledge about the innovation and its functioning and they find difficulties in checking its effectiveness if it constantly changes.

Adopters, on the contrary are in favour of re-invention and can see the benefits of it. Changes during the adoption of an innovation indeed can reduce errors and promote customization in order to make the innovation more suitable for the local needs. Thus re-invention may contribute to shaping the innovation according to the specific systems problems and be more adequate for problems that emerge during the process. The final innovation that is implemented is the result of the decision of individuals and organizations with different needs and situations.

These differences explain why the original innovation, or „mainline“ innovation can be adopted as a whole, but in most cases it is modified in many of its elements (Rogers, 1983).

Re-invention can be caused by many factors. As Rogers explains indeed, there are several reasons that lead to re-invention; some of them are to be found in the innovation itself, while others come from the individual or organization that is responsible for the adoption of the new idea.

Here the main reasons for re-invention provided by Rogers are presented:

1. Innovations which are more difficult to figure out tend to be more frequently re-invented (Larsen and Agarwala-Rogers, 1977a, 1977b).

2. The lack of specific knowledge about the innovation on the part of the adapter can be a cause for re-invention.

This can happen for instance when there is a limited direct contact between the adapter and previous adopters or change agents (Rogers et al, 1977a; Eveland et al, 1977; Larsen and Agarwala-Rogers, 1977a,). Thus inadequate learning and little contact can lead to re- invention.

3. Innovations which consist in tools with different applications (such as a computer) are more likely to be re-invented (Rogers, 1978). The degree of re-invention of these innovations is directly influenced by their manufacturer or designer, who can link the elements of an innovation more or less closely together, thus making the innovation easier or more difficult to re-invent (von Hippel and Finkelstein, 1979).

4. Innovation that are created in order to solve a wide variety of users' problems tend to be re- invented more frequently. In this case, the level of re-invention is higher if the problems of the individual or organization that the innovation should solve are of a great variety

(Rogers, 1983).

5. Another reason for re-invention can be the local pride of ownership of an innovation. It can happen indeed that an innovation is slightly modified in order to make it appear as a local product. This is mainly due to the desire of the adapter to obtain a status or to shape the innovation to the local system. Sometimes for instance the innovation is only given a new name without changing its substance (Rogers, 1983).

6. The last cause of re-invention identified by Rogers is a change agency which can affect the clients decision related to the innovation. Change agencies normally are against re-

invention, however decentralized diffusion systems may support it because this would imply a different attitude on the part of the clients. Through re-invention indeed potential adopters do not just have to accept or reject a new idea but become active participants in the process of adoption and diffusion and make their own contribution to the innovation that is applied to their local system (Rogers, 1983).

The last phase of the innovation-decision model is represented by confirmation. At this stage the individual or the organization tries to reinforce the innovation decision made previously but it can happen that the decision-making unit changes what has been chosen because of contrary opinions about the innovation.

The confirmation stage follows the final decision to adopt or reject the innovation and it goes on for an indeterminate period of time. During this stage the decision-making unit tries to prevent a condition of dissonance or, if this is inevitable, it tries to reduce it (Rogers, 1983).

Dissonance is described by Rogers as a mentally unstable condition that is responsible for the change in the human behaviour. In order to face this unpleasant state of mind the individual modifies his or her knowledge, attitudes and actions and tries to reduce this internal disequlibrium (Rogers, 1983).

As regards innovation, Rogers identifies three different situations in which the individual seeks to reduce dissonance:

1. When there is awareness of a need or problem on the part of an individual and the following attempt to solve it through the search for an innovation. Therefore, seeking of information about an innovation is facilitated by the individual's awareness of a need and he or she usually realizes this need at the knowledge stage in the innovation-decision process.

2. When the innovation has not been adopted yet, however there is awareness of it on the part of the individual and willingness to adopt it.

For this reason, the discrepancy between what he or she thinks and what he or she is doing drives the individual to adopt the innovation. This attitude usually appears at the decision and implementation stages of the process of innovation-decision.

3. When the individual obtains new information which convince him or her that adopting the innovation has not been a good decision. This may turn into a discontinuance of the innovation. In the opposite situation, if the individual had initially decided to reject the innovation, then he or she may come across favourable attitudes towards it and in this case the dissonance may be reduced through the adoption of the innovation. The two described situations (discontinuance or later adoption) to reduce dissonance appear at the confirmation stage in the process of innovation-decision.

Rogers points out that these three cases of dissonance reduction represent situations in which the individual changes his or her behaviour in order that attitudes are consistent with actions.

However, it is not easy to change the original decision during the process, also because a series of actions have already been taken which tend to support the initial decision. This explains why in most of the cases the individual tries to prevent dissonance from happening and on the contrary looks for only the information that reinforce the decision already made. Despite the attempt to avoid dissonance sometimes some new information may emerge and call into question the adoption or rejection decision already made during the innovation-decision process. Change agents play a key role at the confirmation stage, since they have to provide supportive messages to the individuals who have decided to adopt the innovation, in order to prevent dissonance from occurring.

Another risk that the decision-making unit may have to face is discontinuance. Without a sustained effort to support the adoption negative messages may in fact occur and cause discontinuance.

Discontinuance is the decision to reject an innovation after its previous adoption. It usually indicates that the idea has not been completely institutionalized and routinized into the current system and lifestyle of the adopter at the implementation stage. This phenomenon is more likely to occur when the characteristics of the innovation do not match with the adopter's ideas and previous experiences.

Rogers identifies two types of discontinuance: replacement and disenchantment. A replacement discontinuance is the rejection of an idea which is substituted by a better one. Pocket calculators that replaced slide rules are an example of replacement discontinuance, but there are many others in almost every field, since there are always new ideas that replace other ideas that, in turn, had been innovations.

A disenchantment discontinuance is the rejection of an idea because of discontent with its

performance. The reason for this negative feeling may be the unsuitability of the innovation on the eyes of the adopter so that it does not emerge as an advantage compared to alternative practice.