Demand Side Innovation Hypothesis in the Complex Consumer Network

This research examines a new hypothesis of technological diffusion process in the social network structure among consumers, based on an empirical survey and a complex network simulation. In our hypothesis, the social value of a new technology can be changed by a particular consumer community of the early adopters during the diffusion process, and the competition to win a technological standard in a product category can be highly affected by the early adopter communities, instead of the innovators themselves. This phenomenon has been observed in a variety of high-tech products, such as latest mobile phone handsets or automobiles in the Japanese consumer market. This phenomenon implies that the innovation can emerge in the demand side as well as in the supply side, in certain types of product markets, even though the consumers themselves cannot produce or improve products. Translating the value of a new technology is a key issue in the hypothesis, and the process of the translation among consumers can be simulated by a complex network model. In this research, we built a complex network simulation model based on an empirical consumer survey in Japan, and explored the general patterns of a technological diffusion under a variety of settings