Diffusion of the Internet-of-Things (IoT): A framework based on smart retail technology

Abstract

Internet-of-Things (IoT) innovations are reconfiguring our societies and day-to-day lives. How do these new technologies enter our communities, and when they do, how do they complement or disrupt existing activity? This paper provides a framework for addressing these questions, building on a case study of the automated pizza vending machine that is proliferating in France. Relying on an exclusive and newly constructed database, we examine the diffusion of smart pizza vending machines across over 30,000 French communities. Contrary to our expectations, we find that neither the large, dense, and most connected urban centers nor the rural areas with limited access to food options are the first adopters of these machines. Instead, small but well-connected communities, with attractive consumer bases but which lack 24/7 amenities, are at the vanguard of the adoption of this "frugal" IoT innovation -- i.e., one that requires little capital investment but potentially meets widespread demand. Furthermore, we find that independent business owners and small entrepreneurs are the early adopters of the new technology, but they act as forerunners for larger corporate actors. Based on these findings, our proposed framework highlights the decentralized and bottom-up processes that give rise to the rapid penetration of frugal IoT technologies and their associated socio-economic effects.