Possible suboptimal diffusions of technological innovations in clustered scale-free networks

Abstract

Many inter-firm networks take a skewed power-law- or scale-free distribution in which one or a few central actors are connected to numerous peripheral actors. Research argues that central actors can act as early adopters and catalysts for the adoption of technological innovations, but studies are inconclusive regarding central actors’ de facto role in this matter. Peripheral actors in scale-free networks tend to cluster, which implies that they are structurally embedded and mutually dependent. A major thesis in this paper is that clustered peripheral actors in scale-free networks may restrict central actors’ propensity to adopt innovations, and as a result impede their diffusion. The paper discusses which implications this may have for stakeholders in the private and public sector domain and practitioners of strategic management.