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Horizon of absorption as a key factor in the diffusion of innovations

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  • Trushin, I.

  • Kovalenko, A.

Abstract

This article discusses the reasons for the slow pace of implementation of high-tech innovation by traditional industries enterprises. Authors consider the lack of awareness of the level of technological innovation as the main reasons for the slow implementation and usage of innovation by representatives of traditional industries.Authors adapt the well-known model of Aghion «distance to the frontier» so, that it can be applicable to inter-sectoral and inter-firm level of decision-making. The resulting model allows in each case (industry or firm) to answer the question: what is more effectively - to develop our own innovation or to implement and use previously developed innovations.The closer a company (or industry) is to the «frontier» of technological development, the more benefits it will receive from the development of its own innovation. The greater the distance to the technology “frontier”, the greater the innovation potential of the company (or industry), and the more effective will be implementation and use of previously developed innovations.

Suggested Citation

  • Trushin, I. & Kovalenko, A., 2015. "Horizon of absorption as a key factor in the diffusion of innovations," Journal of Modern Competition, Synergy University, vol. 9(4), pages 100-116.
    • Handle: RePEc:snr:mdrcmp:v:9:y:2015:i:4:p:100-116
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