Why new technologies take hold more quickly in some regions

Why do innovations spread more quickly in some regions than in others? Innovation research has traditionally focused on economic conditions, education and technological infrastructure. A new study in the academic journal Research Policy highlights another factor: the psychological openness of the population, which can act as an invisible social infrastructure in the context of innovation. In this interview, Tobias Ebert, assistant professor at the University of St.Gallen, explains what this means for regions’ capacity for innovation.

Professor Ebert, why do groundbreaking innovations emerge in certain places in particular? Or to put it another way: why do innovations flourish better in some places than in others?

Prof. Dr. Tobias Ebert: One of the most robust findings in innovation research is that innovation is distributed very unevenly across geographical areas. And this is despite the fact that information can now be sent around the world in a matter of seconds. However, new knowledge in particular is often not yet fully codified. It is passed on through people, personal contacts and sometimes simply through chance encounters.

That is why regions benefit when universities, innovative companies, skilled workers, capital and other stakeholders are physically located together. However, the mere presence of these stakeholders is not the only decisive factor. Successful regions develop networks, trust, specialised knowledge and a shared culture over a long period of time. Innovation is therefore not just a technological process, but also a social and evolutionary one.

When we think of innovation, we often think of the inventors rather than the people who are the first to use a new technology. Do we underestimate the importance of the population in determining whether innovations take hold in a region?

Yes, because an innovation does not automatically have an economic or social impact simply because it has been developed. It must also be used and adopted. This is particularly crucial in the case of digital platforms: Airbnb needs people to offer their homes, Uber needs people to provide rides, and social media needs people to share content. Success therefore depends not only on the technology, but also on whether enough people are willing to use it.

Your study introduces the concept of psychological openness to explain this. What exactly do you mean by that?

Openness is a personality trait. It describes how curious people are and how open-minded they are towards new ideas and experiences. Such differences exist not only between individuals, but also between regions, when the personality traits of their populations are considered in aggregate.

For our study, we analysed personality data from more than 3.2 million people in the US. This enabled us to compare openness across around 350 US metropolitan areas. We linked this data with novel information on the early adoption of three platform technologies: Airbnb for accommodation booking, Uber for ride-hailing, and Flickr as an early social media platform. Specifically, we used tax data showing where people earn income from the sharing economy, as well as geocoded photo uploads on Flickr. This enabled us to trace when and where these technologies spread across the US.

And what does the comparison reveal?

For all three platforms, we find the same correlation: in regions with a psychologically more open population, the services were adopted earlier. This finding held true even after we had taken into account numerous differences between the regions. These included demographic and economic characteristics, educational attainment, internet access, transport infrastructure and geographical factors.

Although openness was one of the most important factors overall, this does not mean that openness alone determines the success of an innovation.

Rather, openness adds a psychological dimension to the established explanations. We therefore speak of a kind of “invisible social infrastructure”: a regional prerequisite for people to try out new opportunities and for others to follow suit.

Can this correlation be illustrated with specific examples?

Take San Diego, for example: the population there is psychologically more open than in Minneapolis, for instance. In line with this, digital platforms were adopted much earlier and more widely in San Diego: the early uptake of Airbnb was more than four times higher, and that of Uber more than twice as high, as in Minneapolis. This example illustrates the correlation we observe across hundreds of American metropolitan areas.

You are not only investigating where innovations are adopted, but also where new companies emerge and what role regional clusters play. Which three factors are particularly important for the emergence of an innovative ecosystem?

Firstly: knowledge and talent. Universities and skilled professionals generate new knowledge and bring together people who can translate this knowledge into practical applications.

Secondly: connections. It is not just a question of which stakeholders are present, but whether companies, universities, investors and founders work together. Research refers to this as networks or “local buzz”. At the same time, successful regions need links to the outside world – so-called “global pipelines”. Without such connections, a region risks becoming trapped within its own networks and knowledge.

Thirdly, and this is influenced somewhat by our own research, there needs to be an open culture that enables experimentation. New companies emerge amidst uncertainty. This requires capital, but also people who recognise opportunities, take risks and are open to new ideas.

Let’s take another look at our region: with its universities, industry, SMEs and start-ups, Eastern Switzerland has many of the ingredients for innovation. What drives innovation, and where do you see untapped potential?

Geographical proximity is particularly valuable when it actually leads to academic exchange. In my view, the potential therefore lies primarily in connecting existing players with one another: universities with established companies, SMEs with start-ups, research with capital, and regional players with international networks.

What I would tend to advise against is the vision of trying to replicate Silicon Valley on a smaller scale. Successful innovation regions develop their strengths over a long period of time. For Eastern Switzerland, the question therefore arises as to which combination of industrial know-how, universities, entrepreneurship and regional culture it would best like to develop further, taking its own strengths into account.

Prof. Dr. Tobias Ebert is an assistant professor of Behavioural Science & Technology at the Institute of Behavioural Science and Technology (IBT-HSG) at the University of St.Gallen.