Innovation Diffusion Processes: Concepts, Models, and Predictions

Innovation diffusion processes have attracted considerable research attention for their interdisciplinary character, which combines theories and concepts from disciplines such as mathematics, physics, statistics, social sciences, marketing, economics, and technological forecasting. The formal representation of innovation diffusion processes historically used epidemic models borrowed from biology, departing from the logistic equation, under the hypothesis that an innovation spreads in a social system through communication between people like an epidemic through contagion. This review integrates basic innovation diffusion models built upon the Bass model, primarily from the marketing literature, with a number of ideas from the epidemiological literature in order to offer a different perspective on innovation diffusion by focusing on critical diffusions, which are key for the progress of human communities. The article analyzes three key issues: barriers to diffusion, centrality of word-of-mouth, and the management of policy interventions to assist beneficial diffusions and to prevent harmful ones. We focus on deterministic innovation diffusion models described by ordinary differential equations.