ECO 301: Risk, Innovation, and Technology Adoption Analysis Assignment

This assignment delves into economic concepts of risk, innovation, and technology adoption. It begins by defining and providing examples of performance, reliability, and fit risks. The assignment then explores strategies to mitigate these risks, particularly fit risk, through marketing tools such as demonstrations. Further, the assignment examines the theory of induced innovation, emphasizing the role of public sector investment in technology diffusion and infrastructure development. It also discusses the factors influencing technology adoption, such as infrastructure and population density, and explores the relationship between innovation users and the perceived value of innovation. The assignment concludes with a case study of South Korea, analyzing its attraction of supply chains and investors, the strategies used to mitigate risks, and its market promotion techniques.

1a). Reliability-This risk refers to failure by a product to operate well. A scenario where this can
occur is when an equipment has bought for farming are not able to perform their task as
expected.
Performance. This is the unease in the mind of the buyer that the item being contemplated for
buying will not operate efficiently. A scenario where this can occur is when purchasing a
software for use in an organization.
Fit. This risk deals with whether the item works for the user. A scenario where a consumer
experiences such a risk is when he purchases some sunglasses without being sure if they will
work for him.
b). A user can purchase eyeglasses without being sure if they will work for him or not. To
prevent this from happening the user can undertake a demonstration when purchasing the
product. This tool minimizes fit risk by eradicating the probability of a buyer not being able to
use the product or regretting their decision.
2c). The theory of induced innovation denotes the procedure by which the public sector
investment in diffusion and adaptation of technology, in research and in the institutional
infrastructure that is supportive of development, is focused toward producing the constrains on
production the enacted by the factors depicted by a comparatively inelastic supply.
d). Large countries should invest in agricultural research, diffusion and adaptation of agricultural
technology and in the institutional infrastructure that is supportive of agricultural development.
This is because such countries possess large labor pool and the amount of capital available to the

average farmer is moderate. Technologies such as wheat harvester machine should be used to
ensure high production and improvement in the process of harvesting wheat.
e). Reduced diffusion. This is caused by low population in the developing country. It is difficult
for a technology to diffuse faster when there are less people to make it spread out to other areas.
Poor public infrastructure. When there is poor public infrastructure such as road, it becomes hard
for such a country to acquire the new technology due to challenges in accessing the
impoverished rural sectors.
3f). A positive relationship is expected since the number of innovation users can influence the
valuableness of the innovation. When more people continue to adopt innovation, the innovation
becomes more appealing, resulting to more people adopting the technology. We might expect a
negative relationship since people are heterogeneous, therefore during the adoption of the
innovation some people may choose not to adopt it.
g.) Divisible technologies. New seeds, for instance are slowly adopted as farmers undertake
experiments on them. Capital technologies are usually rented initially, and bought only after a
body of experience has been established. Farmers who are old are less probable to adopt
innovations that need more learning (Bandiera & Rasul. 2006). This is the reason why
technologies of conservation are adopted slowly. Yes, this is what I would expect according to
what we have learnt in class. Intensified input utilization efficiency could result to enlargement
in production, which can really aggravate damage on environment.

4). My region is South Korea. The region attracts supply chains or investors reduced regulatory
burden and with low labor costs. This started in the year 19 78, after South Korea was named an
industrial hub. The reason behind South Korea attraction of supply chains and investors is
because it has a high population and the government of South Korea has set good policies for
regulation of industries.
South Korea markets this product through online advertising and trade fairs, which informs
potential investors from other countries to come and invest. Apart from competition, here is no
risk involved for investors and supply chains in South Korea. This risk is mitigated by
enforcement of fair competition policies that ensure the competitions between organizations are
fair. South Korea uses joint investment for businesses or tax breaks and policies that are business
friendly for businesses that relocate.

References
Bandiera, O., & Rasul, I. (2006). Social networks and technology adoption in northern
Mozambique. The Economic Journal, 116(514), 869-902.