How do technology-inherent characteristics affect valuation processes in innovation systems?

Abstract

Technology valuation processes describe how the value of an innovation is created, embedded and changed for society. They are therefore crucial to understanding a technology's speed of diffusion. Recent literature has highlighted the importance of technology-inherent characteristics for innovation processes, i.e. the creation of new technologies. However, the role of these characteristics in shaping the valuation processes and thereby the diffusion of new technologies remains unclear. To address this gap, we compare valuation processes for two competing technologies - Mini-grids and Solar Home Systems for rural electrification in Rwanda using an inductive case study. We derive three technology-inherent characteristics to explain differences in valuation between the two technologies: (i)the need for customization of technologies; (ii)the networked nature of technologies; and (iii)technological complementarity with mature technologies, which implies a greater valuation effort if the technology is characterized by organizational and institutional non-complementarities. We discuss the implications of our results for decision makers and future research.