Leveraging Hype to Predict Adoption Cycle of Emerging Technologies

ByTheo Stratopoulos

University of Waterloo (CS - Big Data Seminar)

November 2016https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2695858

Background - Technology Adoption

Technology adoption cycle (Rogers)

Background - Hype

Gartner Hype Cycle (Technology life cycle)

Objective● Develop a framework for predicting diffusion, specifically the temporal

adoption rate, of an emerging technology by leveraging the hype that

tends to be created with the introduction of a new technology.

Motivation● Number of emerging technologies

○ 236 from 2003-2015

● Implications for stakeholders

○ Adopting firms - duration of competitive advantage

○ Suppliers/vendors and startups - market maturity

○ Investors and venture capitalists - timing of investments

○ Consultants, employees, talent acquisition.

Sources/proxies for Hype● General public or non-interest specific stakeholders e.g.,

○ Web search index (Google trends); magazine and newspaper articles

(LexisNexis), academic articles (Google Scholar)

● Interest specific stakeholders, e.g.,

○ Published books in business and economics as well as technical

(WorldCat); Startups over time (Crunchbase); Patents filed (US

Patent Office); rounds and amount of investments/venture capital

directed towards startups (Crunchbase); Firms implementing (News

releases)

From Hype to Adoption Cycle - PropositionsHype based on non-interest specific stakeholders

● From commencement to peak of hype of the emerging

technology, we have approximately 1 s.d in adoption cycle.

● When adoption is related to external events - e.g., tech or

market bubble - commencement to peak of hype reflects 2 s.d.

Hype based on interest specific stakeholders

● From commencement to peak of hype of the emerging

technology, we have approximately 2 s.d in adoption cycle.

Implementation: Cloud Computing

Cloud Computing: Google Trends & LexisNexis

Cloud Computing: Book Titles

Predictions: Cloud Computing

Years Adopters Cumulative Adoption Competitive Implications Expected Duration

2006-2010 Innovators 2.50% Competitive advantage ~ 12 years

2010-2014 Early Adopters 16% Competitive advantage ~ 8 years

2014-2018 Early Majority 50% Competitive advantage ~ 4 years

2018-2022 Late Majority 84% Parity NA

2022-2030 Laggards 100% Parity NA

The Perfect Storm of Emerging Technologies1. Analytics

2. Big Data

○ Given: Cloud Computing)

3. Internet of Things

○ Given: RFID

4. Blockchain

5. Machine/Deep Learning

From Analytics to Big Data Analytics

While the data analytics hype has peaked the big data hype is still growing.

Big Data and Internet of Things (IoT)

When the IoT reaches mainstream adoption, Big Data will likely grow by several orders of magnitude

Big Data and Blockchain

Blockchain when combined IoT and smart contracts will generate even more data

Big Data and Machine Learning

Dealing with the avalanche of data will motivate the development and adoption of machine learning.

Prepare to ride the perfect storm

It's tough to make predictions, especially about the future

Yogi Berra

Predictions: Blockchain● Gartner Hype Cycle

● Google Trends

● Using Book Titles to Compare ERP and Blockchain

● Startups

● Rounds of Funding

Gartner Hype Cycle: Blockchain is at the Peak

http://www.forbes.com/sites/gartnergroup/2016/08/29/track-three-trends-in-the-2016-gartner-hype-cycle-for-emerging-technologies/#3f4e72e47286

Worldwide Google Search Interest in Blockchain. Have we reached the top yet?

Spring 2013

Fall 2013 Winter 2014

Summer 2016

Hype in Google Searches

De Javu● Compare blockchain statement with ERP statement

○ Anderson et al. (2003): In the late 1990s companies treated the ERP

implementation as an opportunity to deal with Y2K and replace

outdated IT systems.

○ Wild et al. 2015 - Financial Times : “ … For big banks, scrambling to

modernise their often outdated IT systems in the face of pressure

from regulators, digital challengers and cyber criminals, blockchain

represents an opportunity to rethink much of what they do.”

ERP: Book Count

Blockchain: Book Count

Startups count (new)

Cryptocurrency Cryptocurrency & Blockchain Blockchain

Funding Rounds for Cryptocurrency Startups

Seed Series A Series B

Funding Rounds for Crypto & Blockchain Start’s

Seed Series A Series B

Funding Rounds for Blockchain Startups

Seed Series A Series B

Predictions: Big Data● Google Trends

● Using Book Titles

Big Data: Google Trends

Big Data: Book Titles in WorldCat

Limitations“. . . In that Empire, the Art of Cartography attained such Perfection that ... the Cartographers Guilds struck a Map of the Empire whose size was that of the Empire, and which coincided point for point with it. The following Generations, who were not so fond of the Study of Cartography as their Forebears had been, saw that that vast map was Useless, and not without some Pitilessness was it, that they delivered it up to the Inclemencies of Sun and Winters. In the Deserts of the West, still today, there are Tattered Ruins of that Map, …” (Borges 1972)