Tools of spatial and temporal spread of innovations

Model of Table 4 demonstrates the temporal and spatial spread process generally and relatively simply. Three axis’s (variables) of model are the following: time (t), distance (d) and the acceptors, that are owners of analysed innovation (P). The outstanding point of model is the start point of spread, the innovation centre (O), since it overlaps the temporal start point of spread (O). It means that the simplifier condition of the model is that it contains only one spread centre.

The spreading curves can be defined mathematically as well, since the spreading processes could be – in majority of the cases –described by logarithm:

W(t): rate of owner certain innovation, t: time,

c, a: constants

e: basis of naural logaritm (Nemes Nagy, 1998)

Figure 4:Model of spatial production Source: Nemes Nagy 1998)

Innovations are determined by spatial and temporal connection of social and economic processes. Also diffusion of innovation could be analysed in time and space. The temporal aspect of diffusion of innovation could be demonstrated by product life cycle (Figure 5.).

Figure 5. Certain periods of product life cycle Source: Kozári, 2009)

1. In introduction stage the connection is close between innovator, producer and consumer for the sake of successful innovation. Sale is low, price elasticity is enough low as well – since the new product is not known in the market – the unit cost of product is high. In this state the profitability is negative maybe slightly positive – due to low turnover and high distributional and promotional costs. Prices are high.

2. The growth is characterized by increasing (slow or fast) of turnover of product. Volume of sale and price elasticity are growing, the early copiers appear. Since new competitors enter to competition – who consider attractive the wider, profitable market – the market becomes oligopoly. Competitors introduce new product characteristics, more distributional channel appears, more differ consumer demand segments are emerged.

Prices remain on previous level or decrease softly. This phase is characterized by exponential growing incomes and high profit.

3. In the maturity stage the demand on product is growing, while the market is saturated. Competitors do not find profitable segments; also they are pressured to give discount. Optimization and introduction of product characteristics are quickened (more efficient R&D). Volume of sale reaches the maximum; the price elasticity is the strongest. Unit cost reaches the maximum due to mass-production; in addition the greatest profit is realized in this phase. Creation of direct sale-network is carried out in sale. Product development focuses on longer life cycle; it could be achieved partly by alternative products (creating a new product) and partly by market expansion (new consumers and consumption habits appear).

4. The decline state is where the market share is decreasing; the volume of sale is falling back. Decline could happen quickly or slowly, but the low degree of sale could be remained for years. Market is characterised by capacity superfluous, depressed prices, decreasing profitability as result of declining demand. Unit cost is increasing, the production capacity fitting to maturity stage has not utilized and production becomes progressively lossmaking. Emphasise focuses on service-supply, manufacturing spare parts, utilization of formed distributional channels is recommended. The run-out has to be addressed in product-policy; it is worth strengthening the new product development started in maturity stage.

According to Nikodémus (1991) four typical stages could be distinguished in spatial diffusion of innovation:

• In introduction stage the innovation has impact only in the core area. The level of acceptance is low;

phenomenon has not effect places that are far from core area.

• In the diffusion stage the actual diffusion process begins. Centrifugal forces generate innovation centres far from the starting point; regional differences decline.

• In densification stage novelty is present everywhere in space due to space former effect of innovation.

• In maturity phase innovation is known everywhere, spatial diffusion is getting slowly.

„The propagation of innovation waves‖ of Hägerstrand was published in 1952, which gave primarily model-like explanation for geographical diffusion of technical, social, institutional innovations from innovative centrums to acceptor or interfering areas. Hägerstrand established that the innovation ability of novelty applier is different.

Probability of obtaining information even decreases away from the place of innovation-exhaust. Modelling phenomenon Hägerstrand established that diffusion of novelties can be described by increasing number of applier who are following a logistic curve (named acceptance curve), which has a normal distribution (Figure 6.) (Kozári, 2009).

Figure 6. Temporal run of diffusion of novelties Source: Kozári, 2009)

Diffusion of innovation can be:

1. Expansion diffusion – according to neighbourhood impacts

Innovation diffuses through personal relations; the diffusion mark is passed by direct or indirect touch to each other.

• by t1 time: concentrically around centrum

• by t2 time: expansion

• t3 time: decline

Social diffusion process carrying out by indirect touch is double, since innovation has an individual carrier: the information. Before any individual or social group would have any innovation, it is preceded by diffusion of information (news) relating to the innovation. That follows the actual ownership if its conditions are given.

Marketing, advertisement is based on recognizing this double character. This type of diffusion could be considered as a temporary type among the social and natural diffusion processes.

2. Hierarchikus terjedés

It is univocally the part of social systems. Such processes belong to here, where the starting point (the innovation centrum) is generally a larger centre, city; the process moves down the stairs of settlement hierarchy.

It is about diffusion of neighbourhood not in geographical space, but in internal social space, where settlement classes are next to, close to each other; the weight and proportion of social groups, that are able to accept novelties vary in each hierarchy levels. Hierarchy can be manifested in the mentioned process of decreasing function of settlements: process is bottom-up, it starts with the smallest villages to up.

Diffusion processes are typically realised in combination of neighbourhood and hierarchy type. (Nemes Nagy, 1998).

3. Relocation diffusion

Persons carrying innovations, information are separated in space.

• t1 time on first place

• t2 time on second place

• t3 time they appear in a third place with different decreasing intensity.

(For instance the black population of USA, industrial corn production etc.) 4. Combination diffusion

It is the interlacement of expansion and combination diffusion. Diffusion areas slip on each other.

• t1 ne is the core area, which has a common boundary with

• t2 a moderate zone,

• t3 a decreasing diffusion index.

Novelties build on each other (for instance the Hungarian diffusion of abroad investments). The investments settled primarily in Győr-Budapest axis, in Budapest, later along the main transport roads, in the end in the regional centrums.

Another dimension of spatial diffusion of innovation is the way it follows the hierarchy of urban network.

Innovation appears in places with centrum functions, from where it diffuses toward settlements in lower hierarchy. (Four-stairs hierarchy model of Christaller).

Studying diffusion processes alternative directions of innovation oriented regional development policy could be considered. More characteristic direction of development (which improve the faster diffusion of innovation – could be worded according to the model:

• One of the directions wants to quicken spread by creating local innovation centres. The placement of new innovation cores could be a dynamic factor in underdeveloped districts, but the results depend on several other factors.

• Another development direction tries to fasten the diffusion by developing the relationships (communication, transport etc.) between the spontaneously formed economic core areas relating to innovation centrums and theirs closer, peripheral areas.

• A conception could be considered as a separated development direction, which realises the acceleration of innovation diffusion not by decreasing the ―distance friction‖, but by increasing the adaptation ability. For instance when acceptors are tried to be made open-minded through education, development of cultural fields,