Diffusion and adoption of innovation in "retro" industries

Citation

Castellano, S., Adnane, M., Safraou, I. and Schiavone, F. (2013), "Diffusion and adoption of innovation in "retro" industries", European Journal of Innovation Management, Vol. 16 No. 4. https://doi.org/10.1108/EJIM-07-2013-0070

Diffusion and adoption of innovation in "retro" industries

Article Type: Guest editorial From: European Journal of Innovation Management, Volume 16, Issue 4.

Innovation is a key concept in the analysis of industries. Numerous studies analysed the link between industry and innovation. Cross-sectional and longitudinal studies analyse the benefits of innovation within and between industries. Previous works largely emphasized the fundamental role of innovation as a determinant success factor on firm and industry level. According to the Economist, innovation has become the industrial religion of the late twentieth century.

However, recent trends in the literature focus on the “path not taken”. On one side, they question why new technological innovations are not always adopted and that older technologies are still in use, even though they compete with newer ones. They also investigate why and how firms decide to go back in time and/or bring back the past into their present and future strategies. Overall, they question the traditional model of innovation adoption and diffusion.

If innovation represents one side of the coin, it is worth investigating the other side of the coin, which we name “retro”. Retro-industries those industries that introduce elements from the past into current products, processes, etc. Retro implies how to connect the past to the present for the future.

The retro-industry context is of particular interest for several reasons:

Retro is not a recent trend, it has been used in numerous industries. In the music industry, referring to the 1960s influences today's biggest hits. Designers of fashion houses frequently refer to the heritage of the brand in their collections. The wine industry is also characterized with tradition-based practices that are transmitted from generation to generation for more than 2,000 years.

Retro-industries contribute to a better understanding of industry evolution and industry life cycle; and therefore offer alternative explanations of innovation diffusion and adoption. When most models focus on a linear approach to innovation, retro-industries adopt a circular one. Options that were explored but not exploited at one point in time can be considered again later on in the future. For instance, this is the case of electric vehicles which represented a competing but not adopted standard at the early times of the car industry.

Retro-based industries turn out to be successful. On the demand side, they offer some benefits that are valued and appreciated by consumer. On the supply side, they represent an opportunity that can lead to competitive advantage.

However, considering retro-industries raises several questions:

*Retro is a multi-disciplinary concept that has been used in marketing, strategy, design and entrepreneurship among others. Retro-industries have so far not been conceptualized.

In addition, previous studies did not identify the emergence of retro-industries, neither did they analyse their evolution. Therefore, there is a need to investigate the factors that not only explain the roots but also the stability and growth of such industries; i.e. how they evolve, and how they develop on local and broader levels.

*Retro-industries mix the past and the present. Therefore, finding the right balance between the old and the new represents a whole new research agenda. More precisely, the challenge lies in explaining whether retro and innovation are mutually exclusive and are the two extreme of a continuum; or the extent to which they overlap.

This special issue aims at providing both theoretical insight and empirical evidence towards a better understanding of such industries as they offer new or alternative explanations of industry evolution, which can alter the diffusion and adoption of innovation. The first article is conceptual and aims at conceptualizing retro-industries, their emergence and how they evolve. The second article analyses retro from a firms’ network approach throughout a multiple case study. The next two articles combine both the firms’ and the consumers’ lenses. The third article examines the collaborative process of value co-creation by companies and consumers in the development of nostalgic new products. The fourth article explains that the interest in retro pop-rock emerges from the confluence of demand and supply factors. The final article adopts a consumer perception and analyses the product design perspective in the retro processes.

The opening paper “Back to the future: adoption and diffusion of innovation in retro-industries” by Sylvaine Castellano, Olga Ivanova, Adnane Maalaoui, Imen Safraou and Francesco Schiavone analyses the adoption and diffusion of innovation in retro-industries from evolution perspective. In this article, the authors first define retro-industries as those industries that introduce elements from the past into current products, processes, etc. Retro involves the mix between the old and the new. Finding the right balance between the past and the present represents a new research opportunity.

In addition, by considering an industry evolution perspective, the article posits that looking to the past can also represent a way of looking forward: “looking backward to look forward” means that bringing elements from the past might prove to be a successful move for some industries. Hence, while other industries might face difficulties in reinventing themselves, retro-industries will develop the capacity to look back and bring from the past elements that foster innovation, creativity and flexibility. The industry evolution and industry life cycle perspectives help in understanding the emergence of retro-industries.

Finally, the paper identifies factors that explain how the past and the present are connected: tradition, heritage explains how the past is brought into the present; the present is brought to the past through the concept of nostalgia; and vintage shows how the past is created.

Overall, the article provides a model that explains the emergence and evolution of retro-industries, and enriches the diffusion of innovation literature by offering a circular approach that explains how and why industries go back in time.

The second article “Innovation in tradition-based firms: dynamic knowledge for international competitiveness” by Valentina Della Corte, Giuseppina Zamparelli and Roberto Micera builds on the retro approach through the concept of tradition. The authors analyse how tradition-based SMEs – from the artistic-craft sector – that are characterized with activities and products reflecting their territory's cultural identity, namely the Neapolitan region, achieve a sustainable competitive advantage on international level.

The article analyses how dynamic capabilities can be strategic for traditional productions, such as artistic craft, to face a hypercompetitive environment and to protect local resources and traditions in an innovative key. The paper provides a connection between RBT, dynamic capabilities and internationalization theories applied to tradition-based sectors, in terms of the style, culture and tradition of a specific territory, searching innovation in order to compete globally.

Artistic craft firms are an expression of territorial identity. It is built not only on a region, but also on traditions, which are transferred from generation to generation. In this article, retro relates to the concept “cultural traceability”. If not managed in an innovative way, this historical traceability can hinder the process of internationalization.

Throughout a multiple case study approach, the authors identify and analyse the resources that are critical to the success of the internationalization process. They particularly study 12 firms from the Neapolitan artistic-craft sector. Without a well-planned strategy of innovation, the tradition can become a limit for artistic craft-sector's evolution, limiting its competitiveness on global market. Result highlights that the only internationalization path is cooperation, from networking perspective.

From retro perspective, this article shows that specific industries combine innovation in respect of tradition. The firm's history represents an anchor point for entrepreneurial dynamic capabilities, which are able to propose tradition in an innovative way. Creativity is often accompanied by innovation capability, defined as “the capability to interpret the tradition in a modern and innovative perspective”.

The third article, “The co-creation process in the development of nostalgic new products” by Karim Errajaa, Judith Partouche and Vincent Dutot identifies the role of value co-creation in the development of new products with nostalgic content. By using social media platforms, the authors highlight the role of consumer nostalgic experiences and their impact on innovative offers by companies.

Building on the concepts of nostalgia and nostalgic memory, companies can use nostalgic emotions generated by the individuals in order to create their strategies in a value co-creation process. Nostalgia can enhance social CRM for two reasons: companies may answer consumers’ expectations by adding nostalgic elements in their specific offers such as innovative ones; and nostalgia could generate a feeling of belonging to a consumers’community that shares memories.

The article combines two methods: a netnographic approach (both participative and non-participative), and 12 semi-directed interviews.

The results show that consumers are receptive towards nostalgia, they appreciate that past experiences are used for the development of new products and services, and nostalgic consumers’ experiences represent a relevant source of creativity and inspiration for companies. Finally, they also value the combination of nostalgia, modernity and innovation in the creation of products, services and outlets.

The fourth article of the special issue is entitled “Nostalgia and technology innovation driving retro music consumption” by Philippe Cartwright, Ekaterina Besson and Laurent Maubisson. This article aims at understanding why retro pop-rock is so prevalent today and what technology innovation has to do with the relative importance of the genre.

As the authors explain, the literature related to retro music and nostalgia suggests that the music tends to evoke favourable memories of past times. In the retro context, there is always an audience for yesterday's hits, which is coined “retromania”.

“Retro-pop-rock” is considered as residing in the past and influencing the cultural development as it pertains to popular music. A combination of demand-side and supply-side factors drives the popularity of retro pop-rock music. In addition, technological innovation and creativity characterize the history of pop-rock. The article hypothesizes significant correlations between nostalgia (psychological factors) and the innovation (technological factors) related to the distribution and consumption of music.

Using an online survey on 190 participants, the results show that the popularity of retro pop-rock music is driven by a confluence of demand-side and supply-side factors. Nostalgia emphasizes intangible considerations such as security, comfort, pleasant memories. Respondents feel positive towards retro pop-rock music. Technology exhibits similar overall behaviour to those for nostalgia. More interestingly, the results show a connection between a nostalgic attraction to retro pop-rock music and technology as a means to consume music.

The product design perspective in the retro processes is presented in the fifth and last article entitled “Consumer innovativeness, perceived innovation and attitude towards ‘neo-retro’ product design” by Laurence Fort-Rioche and Claire-Lise Ackermann. A central objective of the article is to analyse the relationship between consumer innovativeness, perceived innovation and attitude towards retro design.

Retro strategies require further investigation, especially in a context where the strategic role of innovation is no longer doubted. Since the retro concept possesses both a negative meaning (the past belongs to the past) and a positive one (novelty, originality and innovativeness could be brought from the past), the article examines consumer responses towards neo-retro design.

The article builds on the retro-marketing literature and product design. First, retro-marketing describes marketing strategies drawing on the past to sell up-to-date products and services. It can apply to all the marketing-related activities such as communication, distribution and products. Second, in order to differentiate themselves and create a competitive advantage, firms can use product design. Product design conveys novelty, and plays a strategic role in communicating product innovativeness.

Hence, the article analyse if retro-product design can also convey novelty in a similar way to other new products, and if consumer perceive such innovativeness. Hypotheses test the impact of perceived newness and individual adoption orientation on consumer responses towards neo-retro design.

The authors used product design as a between-subjects factor, with two independent groups, one group of 96 participants being assigned to, first, the neo-retro product design condition and the other group of 98 participants being assigned to, second, the contemporary design condition.

The results show that:

With equal technology, consumers perceive more newness in a neo-retro product design than in a contemporary product design.

Consumer innovativeness has a positive effect on attitude towards the neo-retro product design.

Retro design is well perceived even for consumers who look for innovativeness.

Product design based on the reinterpretation of visual codes from the past (i.e. neo-retro product design) is not inconsistent with perceived newness. It still conveys some creativity.

Throughout their quantitative analysis, the two authors find that consumers perceive more newness in a neo-retro product design than in a contemporary product design. The “neo-retro” approach shows that looking backward does not prevent from looking forward, and connects the past with the present. Product that are the reinterpretation of past product design can paradoxically convey innovativeness.

The papers included in this special issue provide some elements contributing to a better understanding of the retro-industry concept.

First, the findings of the different studies emphasize the fact that retro and innovation are not mutually exclusive, hence a balance does exist between the past and the present. Such balance involves the interpretation of the past in a modern key, which therefore facilitates the process of innovation. Retro design conveys innovativeness and creativity. Retro-industries can also be innovative industries and/or creative industries.

However, the articles also identified negative influences of the retro phenomena. On one side, the burden of heritage and history can hamper the benefits deriving from retro processes. On the other side, the reference to the past needs some connection to the present such as retro-design combined with innovative technology. Stuck in the past is not well perceived by consumer and does not bring value to the firm or the industry.

Second, the different articles point the role of tradition and nostalgia in innovative projects. These findings have implications on different levels. Creative teams in firms and industries can initiative and sustain the permanent reinvention. Value creation does not only involve articulating knowledge from diverse discipline but also to articulate past and present knowledge. Looking backward creates value.

Finally, the balance between the old and the new depends on the demand side – consumer characteristics, perceived innovativeness and on the supply side – product design, technology, social CRM. These factors greatly contribute to the diffusion and adoption if the innovation.

The guest editors would like to thank the authors of the papers greatly contributed to the quality of this special issue. We are also very grateful to the reviewers for their commitment. We also want to thank Christos Kalantaridis the Editor-in-Chief who provided great guidance, support and expertise throughout the process.

Sylvaine Castellano, Maâlaoui Adnane and Imen Safraou
ESG Management School, Paris, France, and
Francesco Schiavone
University Parthenope, Naples, Italy