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Technology Readiness for Innovative High-Tech Products: How

Consumers Perceive and Adopt New Technologies



Dr. Ahmet Emre Demirci, Anadolu University, Turkey
Dr. Nezihe Figen Ersoy, Anadolu University, Turkey


ABSTRACT

The products and services companies offer sometimes become commodities long before they are diffused and
adopted at desired levels by their target audiences. Shortening life cycles of products and services as well as
rapidly shrinking technology s-curves are forcing businesses to better structure their innovation efforts. While
these trends are vital to business sustainability and survival, understanding potential customers technology
readiness and their perceptions concerning certain products and services could provide businesses with a
leading-edge position in their domain. This study is a replication and an extension of Parasuramans study on the
Technology Readiness Index (TRI). Our research aims to uncover the possible differences between the number
and the structure of factors with regard to the technology readiness of potential customers.

INTRODUCTION

As the intensity of competition is rapidly increasing, more companies are offering technology-based products
and services to satisfy and exceed the ever-changing expectations of the customers. While the number of
innovative high-tech products and services is increasing as we speak, consumers experiences with these
products and services are becoming a focal point for companies striving to survive in todays digital world. Thus,
the question of why do certain individuals adopt new technologies, whereas others dont? is highly important
for companies offering technology-based products and services (Tsikriktsis, 2004). The answer to this question
has a direct relevance to the diffusion and adoption of innovative products. Because innovations that are
perceived by receivers as having greater relative advantage, trialability, compatibility, observability and less
complexity will be adopted more rapidly compared to other innovations without these qualities (Rogers, 1983).
Among many research streams that have dealt with this question, scholars and companies have increasingly been
giving the notion of technology readiness more attention recently. Before we extend our discussion, a framework
of what technology is ought to be given. The American Heritage Dictionary of the English Language (2000)
defines technology as:

1. Systematic treatment of an art or craft:
a. The application of science, especially to industrial or commercial objectives.
b. The scientific method and material used to achieve a commercial or industrial objective.
2. Electronic or digital products and systems considered as a group: a store specializing in office technology.

According to Bush (McOmber, 1999) Technology is a form of human cultural activity that applies the
principles of science and mechanics to the solution of problems. It includes the resources, tools, processes,
personnel, and systems developed to perform tasks and create immediate particular, and personal and/or
competitive advantages in a given ecological, economic, and social context.

From the perspective stressing the commercial value of technology, high technology products and services can
be considered as the output of a planned industrial approach, research and development, and ongoing innovation
efforts. While these innovative products and services are offered to targeted consumer groups, the relationship
between technology, innovation and consumers adoption processes should be underlined.

Diffusion of Innovations

Diffusion is a process whereby an innovation spreads across a population of potential adopters over time through
various channels (Fichman and Kemerer, 1999). Thus, diffusion of innovation refers to how, why, and at what
rate new ideas and technology spread through different cultures. Individuals within the cultures are not passive
recipients of innovations. Although it varies in terms of the extent, they seek innovations, experiment with them,
evaluate them, develop feelings about them, complain about them, and gain experience with them often through
dialogue with other users (Greenhalgh et al., 2004). Experiences of customers and the perceived value of
innovations are among the main factors causing some innovations to spread more quickly than others. Also the
characteristics of an innovation have a major impact on its rate of adoption among members of a social system
(Rogers, 2002). In addition to the above-mentioned factors, technology readiness of potential users is among the
factors affecting how fast and to what extent potential users adopt a technology.

Technology Readiness (TR) and Customer Readiness (CR)

Explaining and predicting user adoption of new technology has a long history of attention in both academia and
practice. TR construct can be viewed as an overall state of mind resulting from a gestalt of mental enablers and
inhibitors that collectively determine a persons predisposition toward using new technologies (Lin, Shih, Sher,
2007).

Parasuraman (2000) has tried to define what affects a customers choice to turn to SSTs (Self-Service
Technologies) and other technology-based services depending on marketing view. He found there are some
characteristics that comply with the acceptance of new technologies or services resulting in interaction through
technology. Thus, the term technology-readiness refers to people's propensity to embrace and use new
technologies for accomplishing goals in home life and at work (Parasuraman, 2000). Lin and Hsieh (2007) found
that it is critical for firms currently using, or considering using SSTs to address the TR of customers. Lin and
Hsiehs results show that the higher the technology readiness of customers, the higher the satisfaction and
behavioral intentions generated when using self-service technologies.

At the measurement level, the Technology Readiness Index (TRI) was developed to measure peoples general
beliefs and some thinking on technology. TR construct comprises four sub-dimensions: optimism,
innovativeness, discomfort, and insecurity. According to Tsikritis, explanations of these dimensions are
(Tsikritis, 2004):

Optimism: A positive view of technology and a belief that it offers people increased control, flexibility,
and efficiency in their lives.
You like the idea of doing business via computers because you are not limited to regular
business hours.
Technology gives people more control over their daily lives.
Technology makes you more efficient in your occupation.(Tsikritis, 2004)

Innovativeness: A tendency to be a technology pioneer and thought leader. Innovativeness measures
the extent to which an individual believes he or she is at the forefront of trying out new technology-
based products and/or services and is considered by others as an opinion leader on technology-related
issues.
You can usually figure out new high-tech products and services without the help of others.
In general, you are among the first in your circle of friends to acquire new technology when it
appears.

Discomfort: A perceived lack of control over technology and a feeling of being overwhelmed
by it. This represents the extent to which people have a general paranoia about technology-based
products and services, believing that they tend to be exclusionary rather than inclusive for all kinds of
people. The following statements illustrate the types of beliefs contributing to discomfort:
Sometimes you think that technology systems are not designed for use by ordinary people.
When you get technical support from a provider of a hi-tech product or service, you sometimes
feel as if you are being taken advantage of by someone who knows more than you do.

Insecurity: Distrust of technology and skepticism about its ability to work properly. Although somewhat
related to discomfort, this dimension focuses on specific aspects of technology-based transactions,
rather than on a lack of comfort with technology in general. The following statements illustrate the
types of beliefs contributing to insecurity:
You do not consider doing business with a place that can only be reached online.
If you provide information to a machine or over the Internet, you can never be sure if it really
gets to the right place.

Massey, Khatri, and Montoya-Weiss (2007) stress that TR encompasses more than the degree to which an
individual is relatively earlier in adopting an innovation. Parasuraman (2000) further explains it is possible for
the customer to have both positive and negative feelings about technology, especially high technology products
and services. His study also found that even technological optimists and innovators experience anxiety in the
same way as less technology-enthusiastic customers. As noted earlier, technology readiness (TR) refers to the
propensity of consumers to embrace and use new technologies for accomplishing goals. He also said that the
technology readiness construct refers to peoples propensity to embrace and use new technologies for
accomplishing goals in home life and work. The key contribution of this index, which seeks to identify a
consumers propensity to adopt and use new technologies, is in the finding that a consumers level of readiness
to adopt is positively affected by both the consumers level of optimism regarding the products ability to
provide substantial benefits and his/her level of innovativeness with reference to the tendency to pioneer new
ideas (Parasuraman, 2000).

In describing TR, Parasuraman and Colby (2001) identify five distinct groups: Explorers, Pioneers, Skeptics,
Paranoids, and Laggards. Explorers score higher on the contributors (optimism, innovativeness) and lower on
inhibitors (discomfort, insecurity) than the other segments. Explorers are a relatively easy group to attract when
a new technology-based product or service is introduced and represent the first wave of customers. Laggards are
the opposite of Explorers, ranking lower on the contributor factors and higher on the inhibitor factors than all the
groups as a whole. Laggards are also typically the last group to adopt a new technology-based product or service.
The middle three segments (Pioneers, Skeptics, and Paranoids) have more complicated beliefs about technology.
Pioneers share the optimism and innovative beliefs of Explorers, but they simultaneously feel some discomfort
and insecurity. They desire the benefits of technology, but are more practical about the difficulties and
challenges. Skeptics tend to be dispassionate about technology, but also have few inhibitions; thus, they need to
be convinced of the benefits. Paranoids may find technology interesting, but they are also concerned about risks,
and exhibit high degrees of discomfort and insecurity (Massey, Khatri and Montoya-Weiss, 2007). According to
Parasumans results, Table 1 shows the characteristics of technology segments (Jaafar et al., 2007).

Table 1. The Characteristics of Technology Segments
Technology segments Optimism Innovativeness Discomfort Insecurity
Explorers High High Low Low
Pioneers High High High High
Skeptics Low Low Low Low
Paranoids High Low High High
Laggards Low Low High High
Source: http://www.arl.org/libqual/events/oct2000msq/slides/parasuraman

Although new technology is proliferating in modern times, people may not easily accept it. Technology cannot
be accepted if consumers are not ready. As we said before, much previous research has discussed the relationship
between CR and SST (Liljander et al., 2006; Lin and Hsieh, 2006; Meuter et al., 2005; Parasuraman, 2000;
Tsikritis, 2004). The concept of Customer Readiness (CR) (Ho and Ko, 2008) is a state of mind a persons
predisposition toward using new technologies (Liljander et al., 2006). Meuter et al. (2005) referred to CR as a
condition or state in which a consumer is prepared and likely to try new technology services; it can be
conceptualized as role clarity, motivation, and ability. According to Parasuraman (2000), technology readiness
defined as being peoples propensity to embrace and use new technologies for accomplishing tasks in home life
and at work is composed of optimism, innovativeness, discomfort, and insecurity

Ho and Kos study (2008) uses role clarity, motivation, ability, and optimism to measure the effects of CR on the
acceptance of Internet banking (Meuter et al., 2005; Parasuraman, 2000). Role clarity occurs when a customer
understands and has knowledge of what to do. Motivation both intrinsic and extrinsic is the customers desire
to receive the rewards. Ability is the required processing skills and confidence to complete the task. Finally,
optimism claims that people have a positive view of technology and believe that SST offers them flexibility,
efficiency, freedom, and benefits in their lives (Ho and Ko, 2008). Companies should understand all the motives
and perceptions that may have an effect on customers technology readiness as these factors could be an integral
part of new product development strategies.

Method

Research and questionnaire design

Survey form
The Technology Readiness Index (TRI) was used in the study. TRI is a multiple-item scale developed to
measure consumers readiness to embrace new technologies (Parasumaran, 2000). TRI consists of 36 statements
that put forward the drivers and inhibitors of technology readiness. The statements were evaluated by survey
participants according to a five-point Likert scale (-2 strongly disagree and 2 strongly agree).

Sample
Academic staff of Anadolu University forms the universe for this study. The survey instrument was distributed
through a Web-based surveying application. The Web link to the survey, along with the explanations, was
distributed to all academic staff. All the statements in the survey instrument were mandatory. The statements
appeared on the Web site one by one. As the survey instrument was designed originally in English, a pilot study
was carried out with 30 people to test the clarity of the statements translated into Turkish. The final shape was
given after the necessary corrections were made.

Answering all the questions in the survey took the participants 7-8 minutes. The Web link for the survey was
sent to 1,500 academic staff. Seventy one forms were not taken into consideration as the answers were not
complete or statistically unusable. Three hundred and twenty four survey forms were returned as suitable for
statistical analysis. The rate of return in this study is 22%.

Findings and results

Characteristics of the sample

Of the 324 survey participants, 51.2% were female and 48.8% were male. 23.1% were under 29 years old, 23.8%
were 30-34, 21.9% were 35-39, 13.6% were 40-44 and finally 17.6% were over 45 years old. In terms of
monthly income, 21.3% of the participants earned less than 1000 TRL, while 42.9% were earning 1500-2000
TRL, 18.2% were earning 2000-2500 TRL, and 17.6% were earning 2500 TRL and above. The majority of the
participants were held a doctoral degree (56.2%), while 15.1% held a bachelors degree and 28.4% held a
masters degree.

Table 2. Characteristics of the Sample
Frequency Percentage
Gender
Female 166 51.2
Male 158 48.8
Age
29 and less 75 23.1
30-34 77 23.8
35-39 71 21.9
40-44 44 13.6
45 and above 57 17.6
Income
(Average monthly)
1001 TRL and less 69 21.3
1501-2000 TRL 139 42.9
2001-2500 TRL 59 18.2
2501 TRL and above 57 17.6
Education
Bachelors 49 15.1
Masters 92 28.4
Doctorate 182 56.2

Factors in technological readiness
There are 36 items in total which may drive or inhibit technology readiness in the TRI measurement scale of
Parasuraman. To classify and sort out the variables, two-level principal component factor analysis was used in
this study. Eleven items with factor loadings of less than 0.40 were excluded from the original scale after the first
pass, and the final analysis was performed on 25 items. In concordance with Kaisers (1974) criteria, only the
factors with eigenvalues greater than 1 were retained; and only the items with factor loadings and communalities
greater than 0.40 were included in the final factor structure. Cronbachs alpha values for each dimension were
computed to confirm the factors internal consistency.

It is necessary to test the Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy (Zhang et al. 2003) in
order to apply factor analysis on the statements included in TRI. The Kaiser-Meyer-Olkin (KMO) was 0.850,
indicating that the sample was adequate for factor analysis (Kaiser, 1974).

According to principal component analysis, five factors had an eigenvalue equal to or greater than 1, explaining
a total of 58.11% of the variance. These factors are called Innovativeness, Insecurity, Optimism,
Discomfort and Interaction. In factor analysis, the percentage of the variance explained by each factor
indicates the relative significance of the factors.

Accordingly, the first factor, labelled as innovativeness, explained the largest part (24,55%) of the total variance,
having a greater significance than the other four factors. The innovativeness factor consists of seven statements
related to the innovation readiness of the people. The second factor, labelled as optimism, explained 14,50% of
the variance. This factor consists of eight statements related to technological optimism. The third factor, labelled
as insecurity, explained 8,45% of the variance. This factor consists of four statements related to the feeling of
insecurity. The fourth factor, labelled as discomfort, explained 5,90% of total variance. This factor consists of
four statements related to technological discomfort. And, finally, the fifth factor, labelled as interaction,
explained 4,72% of the variance. This factor consists of two statements related to the users perceived
importance of human interaction in technology-related services. All factor loadings are greater than 0.40 and the
cronbach alphas are greater than 0.69, while the total scale reliability is 0.85. All factors have a relatively high
coefficient score (see Table 3).

Table 2. Factors and Items on Technologic Readiness
Factors Factor Loadings Mean S.D.
Eigenvalues
(% of
variance)
Alpha
Factor 1: Innovativeness (7 items)
OPTIMISM6 .59 4.15 0.88
6.136
(24,55%)
.89
INNOVATIVENESS11 .77 3.45 1.14
INNOVATIVENESS13 .82 3.19 1.07
INNOVATIVENESS14 .79 3.76 1.06
INNOVATIVENESS15 .69 4.17 0.82
INNOVATIVENESS16 .82 3.65 1.10
INNOVATIVENESS17 .79 3.60 1.04
Factor 2: Optimism (8 items)
OPTIMISM1 .68 4.61 0.60
3.626
(14.50%)
.80
OPTIMISM2 .60 4.18 0.96
OPTIMISM3 .58 4.00 0.85
OPTIMISM5 .50 3.93 0.92
OPTIMISM7 .66 4.62 0.68
OPTIMISM8 .51 4.28 0.86
OPTIMISM9 .68 4.04 0.93
OPTIMISM10 .62 4.41 0.77
Factor 3: Insecurity (4 items)
INSECURITY28 .88 3.20 1.34
2.112
(8.45%)
.82
INSECURITY29 .87 3.09 1.30
INSECURITY31 .69 3.37 1.20
INSECURITY32 .60 3.45 1.31
Factor 4: Discomfort (4 items)
DISCOMFORT19 .59 3.43 1.06
1.476
(5.90%)
.69
DISCOMFORT25 .66 3.41 1.14
DISCOMFORT26 .78 3.89 0.97
DISCOMFORT27 .71 4.16 0.87
Factor 5: Interaction (2 items)
INSECURITY34 .82 3.91 1.04 1.179
(4.72%)
.78
INSECURITY35 .78 4.25 0.94

ANOVA and t-tests were applied to assess the demographic differentiations of the factors of technological
readiness (Table 4). With regards to the gender variable, innovativeness was found to be significantly different
compared to the other variables. According to the t-test results for the innovativeness factor, male respondent
values were assessed as higher than those of female respondents. According to Shashaani (1997), males are more
interested in computers and related technologies than are females and have more self-confidence in working with
computers. Also Venkatesh et al.s (2000) investigation of the determinants of technology adoption and usage
behavior confirmed that attitude toward using technology was more salient to men. With regards to age,
insecurity and discomfort were found to be significantly different compared to the other variables. Morris et al.
(2000) suggests that there are clear differences with age in the importance of various factors in technology
adoption and usage. According to their study, older workers feel less comfortable with using a new technology
compared to younger workers. Also Schumacher et al.s (2001) research reveals that elder users are less
comfortable and/or competent with computers and related technologies. None of the factors of technological
readiness were statistically different according to educational level and average income.

Table 4. Aspect Differentiation According to Demographics
Factors Gender Age Education Income
t P F P F P F P
Innovativeness -3.986 .000** 2.602 .036 1.555 .200 0.274 .844
Optimism -0.034 .973 1.843 .120 2.558 .055 0.285 .836
Insecurity 2.115 .035 5.441 .000** 0.604 .613 1.366 .253
Discomfort 0.075 .941 4.485 .002** 0.386 .763 1.091 .353
Interaction 0.209 .835 1.738 .141 0.571 .634 0.010 .999
* p <0.05 ; ** p <0.01

Conclusion

As mentioned at the beginning of the article, this study was performed to replicate the technology readiness
taxonomy Parasuraman and Colby developed. The idea behind this replication study was to test the technology
readiness index within Turkish culture. Although the results have provided strong support for their taxonomy, we
found another dimension that differs from the original configuration. We found that two statements included in
the original index was separately grouped by the Turkish respondents. Both statements were about the
customers preferences in the way the company interacts with them. Although these two statements were
grouped under the Insecurity dimension in Parasumarans study, Turkish respondents positioned the statements
as a seperate group. As both statements deal with company-customer interaction, we labelled the new factor
found in our study as Interaction.

We found this result meaningful as we considered the cultural differences. According to Hofstede (1983),
individualism and collectivism is one of the dimensions he put forward to explain national cultural differences.
Although both individualist and collectivist societies are integrated wholes, individualist society is loosely
integrated while collectivist society is tightly integrated. In other words, the ties between individuals are tighter
in collectivist cultures compared to individualist cultures. In contrast with the U.S., Turkey has a low
individualism score. Tan et al. (1998) found that people in collectivist cultures may be less willing to use
computer-mediated communication tools compared to people in individualist cultures. Another point is that
individualist societies are generally low-context cultures, where people have a lesser need for nonverbal cues,
and people communicate in an open and direct way. Conversely, collectivist societies are generally high-context
cultures where people communicate in a less open and direct way. Thus, gestures, allusions, and nonverbal cues
are sometimes important for the mutual communication of messages. Ross (2001) suggests that low-context
cultures may experience greater comfort with the use of electronic communications media because fewer
nonverbal cues are required than those from higher context cultures. On the other hand, high-context cultures
require many non-verbal cues for communication which could hardly be satisfied through electronic
communication.

In concordance with studies on cultural differences and communication, Turkish respondents, who, as a group,
belong to a collectivist and high-context culture, perceived the above mentioned questions in a different way and
separated them from their original group while stressing the relative importance of human touch in company-
customer interaction in a society having tight relationships between individuals. Our study reveals that cultural
factors can also have an effect on the technology readiness of people, therefore the rate of diffusion and adoption
of new technologies vary from culture to culture. While 70% of our respondents stated that human touch is very
important when doing business with a company, 80.5% of our respondents clearly stated that they prefer to
interact with a person instead of a computer. Thus, we believe that adding a new dimension stressing the cultural
differences affecting technology readiness would be beneficial to better explain the rate of diffusion and
adoption of new technologies.

Limitations and Future Research

The most important limitation in our study is that the study was done on a group with a strong educational
background. Above-avarage income level and high educational background may affect the level our group
exposes to new technologies. Thus, our respondents may have a higher technology readiness profile compared to
other parts of society. Further research on a more diversified sample could generate a more detailed insight into
the technology readiness of Turkish customers.

Although we excluded some questions, original scale was used in the study. However, the results of our study
revealed that the cultural differences may affect the technology readiness of people in a society. In further
studies which might be performed in various societies with major differences from U.S. culture, an extended
scale could be developed to cover some more statements to better measure the effect of cultural factors in
technology readiness.

Finally, characteristics of technology segments could be analysed for different cultures to identify if there are
any shifts between the groups derived from the cultural differences. Especially, a research on a society with
collectivist qualities could have a potential to reveal the shifts between the segments.














































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