Diffusion and Adoption of Technological Innovation in the Energy Sector

221 Pages·2015·3.72 MB·English

by  Florian Naegele

ETH Library
Diffusion and Adoption of
Technological Innovation in the
Energy Sector - the Role of
Individuals and Firms
Doctoral Thesis
Author(s):
Nägele, Florian Karl
Publication date:
2015
Permanent link:
https://doi.org/10.3929/ethz-a-010449416
Rights / license:
In Copyright - Non-Commercial Use Permitted
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DISS. ETH NO. 22695

Diffusion and Adoption of Technological Innovation in the
Energy Sector—the Role of Individuals and Firms

A thesis submitted to attain the degree of
DOCTOR OF SCIENCES of ETH ZURICH
(Dr. sc. ETH Zurich)

presented by
Florian Karl Nägele

Dipl.-Wi.-Ing., Universität Karlsruhe (TH)
MBA, Union Graduate College

born on 02.04.1984
citizen of Austria and Germany

accepted on the recommendation of
Prof. Dr. Volker Hoffmann, examiner
Prof. Dr. Florian von Wangenheim, co-examiner

2015
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“If you always do
what you always did,
you will always get
what you always got.”

Albert Einstein

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Acknowledgements
I understand that this section can be and will remain an incomplete list only. It is impossible to
pay well-deserved tribute to each and every individual that has, directly or indirectly, influenced
my very personal dissertation journey. Knowing that the following lines will potentially be
among the only lines read by many adds to the challenge. At the same time, I happily take on
the much appreciated opportunity to express my heartfelt gratitude to a number of people I do
feel deeply indebted to:
 Volker Hoffmann, for providing me with the opportunity to embark on this academic
journey. Thank you for giving me the freedom to pursue my own ideas and for your
continued trust, patience and care.
 Florian von Wangenheim, for kindly agreeing to be on my examination committee and
for your valuable advice and support throughout my time at ETH. Your doors were
always open and I benefitted from and enjoyed each and every discussion we had.
 Paul Schönsleben for chairing my dissertation defense and for inspiring lectures during
my previous studies at ETH.
 Bastien Girod, for giving me guidance and invaluable support throughout my entire time
at SusTec—and for very enjoyable workout sessions. You exposed me to a number of
different ideologies and enriching perspectives, which I feel have contributed to my
professional development, shaped me as a person and will accompany me for the rest
of my life.
 Joern Hoppmann, for support when needed and for exciting discussion on various
occasions and topics. What started out as a research collaboration has, grown into
friendship and far beyond discussing organizational learning and strategy-related
issues.
 Tillmann Lang, for the pleasure to fight many of the academic and practical battles side-
by-side. You have not only supported me numerous times, but have also been an
inspiration and a true companion in professional settings as well as on slopes and
mountain ridges.
 Fanny Frei, for being the pleasant, supportive and encouraging colleague, office
neighbor and friend that you are and for the many inputs and the valuable feedback on
various topics.
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 Monica, for being the always welcoming, kind, helpful and superb-reliable person that
you are.
 All master students I had the honor to work with: Benedikt Deuchert, Thomas Kasper,
Verena Kontschieder, Sebastian Mayer, Michael Vormittag and Thomas Zumbühl. You
guys have proven to me more than once that you are not only gifted, smart, dedicated
and hardworking, but also a pleasure to work and spend time with.
 All current and former SusTec colleagues, for forming such a stimulating and truly
unique center of excellence. In particular David Ammann, Benedikt Battke, Catharina
Bening, Timo Busch, Sabine Erlinghagen, Sigfried Flohr, Erik Glöhrfeld, David
Grosspietsch, Jens Hamprecht, Aoife Brophy Haney, Jörn Hünteler, Julian Kölbl,
Alexander Langguth, Abishek Malhotra, Johannes Meuer, Christian Niebuhr, Jan
Ossenbrink, Falco Petzold, Tobias Schmidt, Annegret Stephan, Thomas Trautmann
and Geng Wu.
 My family and friends, for teaching me much about life, keeping me sane, believing in
me no matter the circumstances, and for providing me with never ending support which
was and still is inevitable for what I did and do. In particular, I want to thank my parents
Lydia and Karl Nägele, as well as Käthe and Manfred Diers.
 Above all, I want to thank Deike for her love and support. Despite the fact that without
your distraction, it would have taken significantly less time to finish this dissertation, I
am highly grateful for every moment and would not want to miss a second we spent
together. Many of the things I have done would not have been possible without you by
my side. Your emotional support gave me stability to keep going and you never stopped
believing that what I do is the right thing to do.

Zurich, March 2015

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Abstract
Most people now accept that we must reduce carbon emissions if we are to avoid serious,
presumably irreversible harm to the biosphere in which we live. Technologies concerned with
the conversion, transportation, storage, and use of energy are a critical part of the problem,
and also of the solution. We have seen the development and commercialization of numerous
novel technologies aimed at reducing carbon emissions, resulting in the emergence of new
industries (e.g. photovoltaic, smart home, and electric vehicles, to name just three).
Nonetheless, while many ambitious “clean technologies” were widely seen as technically and
even economically attractive at the outset, they ultimately failed to reach the expected levels
of diffusion. The technical and economic performance of a technology has been identified as
a key determinant of its adoption, but neither individuals nor firms decide to adopt technology
based on this criterion alone. This thesis explores in more detail how firms and individuals
decide to adopt novel, technological innovation.
I examine selected drivers that influence individual and firm technology adoption, and thus
moderate the link between technology performance and diffusion. In doing so, I combine and
build upon insights from different theories across disciplines, including innovation diffusion
theory, technology adoption theory, and organizational learning theory. The thesis comprises
four individual papers, each addressing a specific gap in the extant literature. Paper I conducts
a technical, quantitative assessment of the performance of a novel, consumer energy
technology undergoing commercialization (intelligent, automated heating control). Paper II
compares and evaluates two fundamentally different approaches (utility-based versus belief-
based) to investigating the adoption determinants of technologies. Paper III extends existing
adoption theory to experiential technologies, an increasingly prevalent technology category,
and conceptualizes key determinants of individual adoption. Finally, Paper IV scrutinizes
adoption-related decision-making mechanisms within firms, with a particular focus on the role
of the board of directors.
All four papers are situated within the broader frame of the energy sector. Automated heating
control, assessed in Paper I, is a technology directly relevant for, and the individuals and firms
assessed in Papers II–IV represent key actors of the sector. However, whereas Paper I is
purely technology-focused, Papers II and III both focus on potential adopters of novel smart
home technologies to advance our understanding of individual behavior. Paper IV takes a
different perspective and focuses on firm behavior by investigating a sample of Switzerland’s
largest utility firms. The mounting pressure on Swiss utility incumbents to shift their strategic
orientation from exploiting existing technologies to exploring new ones makes this sector an
ideal case to study firm adoption behavior.
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This thesis applies a mix of quantitative and qualitative methods, reflecting the diverse
phenomena investigated. Methods range from quantitative, simulation-supported thermal
modeling to quantitative, statistical assessment of survey data with structural equation
modeling, as well as qualitative, inductive case-study research.
This thesis makes four major contributions. First, I present empirical evidence that shows that
novel intelligent heating control in residential buildings can significantly reduce energy
consumption without compromising comfort. This underlines the importance of technology
innovation as an enabler of low-carbon energy systems, and points directly to related building-
efficiency potential. Second, by testing and comparing utility-based versus belief-based
individual adoption models using the same empirical data, I show that belief-based models are
far better suited for investigating technology adoption determinants—perception is more
important than objective performance. This explains controversial findings in the extant
literature, and provides guidance for the avoidance of omitted-variable bias in future studies.
Third, I illustrate the importance of “everyday practices” for individual experiential technology
adoption. This contributes to extant adoption theory by highlighting a previously unheeded
construct that is more influential for early-stage adoption than commonly accepted beliefs such
as usefulness or price value. Fourth, I conceptualize in detail the role of the board of directors
in organizational exploration, a widely investigated concept that encompasses firms’
technology-adoption behavior and is well suited for studying it. This adds to the literature on
organizational learning by highlighting the importance of a set of board-internal learning
capabilities for strategic reorientation, and by showing how boards can come to cause
organizational inertia.
These insights allow me to derive several recommendations for policymakers, managers, and
shareholders. Policymakers should consider novel, experiential technologies more directly
when drafting directives for building emission reduction. Moreover, when designing policy
measures intended to spur technology diffusion, they should recognize compatibility with
everyday practices and hedonic motivation as key drivers of early-stage adoption. According
to our results, measures that focus on price value (e.g. subsidies) or address environmental
norms (e.g. information campaigns) might suffer from low influence. Additionally, managers,
and particularly shareholders, are well advised to facilitate and institutionalize continuous
board-internal learning to prevent strategic inertia, notably when firms need to shift toward
more exploration. This is particularly relevant in times of increased environmental dynamism,
such as liberalization, regulatory changes, or increased competition. Lastly, managers who are
concerned with the commercialization of technologies should pay attention to key adoption
determinants and understand that they can be more influential than technical performance.
Compatibility with everyday practices, for example, is more important for early adopters than
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usefulness or price value, and should ideally be considered and integrated as early as possible
during product development.
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Zusammenfassung
Es ist weitläufig akzeptiert, dass die CO -Emissionenauf der Erde drastisch verringert werden
2
müssen, um schwerwiegende und höchstwahrscheinlich irreversible Umweltschäden zu
verhindern. Technologien zu Umwandlung, Transport, Speicherung und nicht zuletzt Nutzung
verschiedenster Energieformen stehen im Zentrum dieser Herausforderung. Sie sind nicht nur
wesentlicher Verursacher des Problems, sondern auch essenzieller Bestandteil seiner
Lösung. Unzählige neue Technologien mit dem Ziel, die Freisetzung von Treibhausgasen
einzudämmen, wurden (und werden) entwickelt und kommerzialisiert. In einigen Fällen führt(e)
dies sogar zur Entstehung neuer Industriesektoren (z.B. der Photovoltaikindustrie, der Smart-
Home-Industrie oder dem Elektromobilitätssektor). Dennoch: Viele sogenannte „Clean
Technologies“, die zunächst nicht nur als technisch ausgereift, sondern auch als ökonomisch
attraktiv für den Endkunden eingestuft wurden, diffundierten nicht wie erwartet. Die
Leistungsfähigkeit einer Technologie ist zwar nachweislich einer der Haupttreiber für deren
Adoption durch Kunden und Nutzer. Trotzdem ist offensichtlich, dass weder Firmen noch
Einzelpersonen sich allein auf Basis der technischen Leistungsfähigkeit bzw. der
ökonomischen Attraktivität für oder gegen den Einsatz einer neuen Technologie entscheiden.
Die vorliegende Arbeit untersuchte daher, auf Basis welcher Beweggründe und wie Firmen
und Einzelpersonen sich für die Adoption technologischer Innovationen entscheiden.
Untersucht wurden ausgewählte Einflussfaktoren, die das Adoptionsverhalten von Individuen
und Firmen beeinflussen und dadurch die Wechselwirkung zwischen der Leistungsfähigkeit
einer Technologie und ihrer Diffusion moderieren. Um diese näher zu beleuchten, baut diese
Dissertation auf Erkenntnissen aus den Bereichen der Innovations- und Diffusionsforschung,
der Informationssystem- und Adoptionsforschung sowie der Organisationstheorie auf.
Insgesamt umfasst die Arbeit vier wissenschaftliche Artikel. Jeder dieser Artikel ist
eigenständig und adressiert eine spezifische Forschungslücke in der bestehenden Literatur.
Artikel I untersucht und quantifiziert die technische Leistungsfähigkeit einer neuen
Energietechnologie für Endkunden. Diese befand sich zum Zeitpunkt der Arbeit im frühen
Stadium der Kommerzialisierung (intelligente, automatisierte Steuerung von Heizungsanlagen
in Privathaushalten). Artikel II vergleicht und bewertet zwei unterschiedliche theoretische
Ansätze zur Untersuchung der Adoptionstreiber neuer Technologien. Artikel III untersucht
sogenannte „Experiential Technologies“, die im Alltag eine immer größere Rolle spielen. Dabei
werden – durch das Konzeptualisieren der wesentlichen Adoptionstreiber – existierende
adoptionstheoretische Ansätze um einen wichtigen Technologiekontext erweitert. Artikel IV
untersucht firmeninterne Entscheidungsfindungsprozesse, die im Rahmen von
Technologieadoption in Unternehmen ablaufen. Hauptaugenmerk liegt dabei auf der
Einflussnahme des Verwaltungsrates.
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