Generation Y, the first group to come of age in the Internet era, is all grown up and ready to launch the next wave of multibillion-dollar tech companies. And investors are ready to help them do it.
“If you’re 20-something and have an idea of what you want to build, you can go out and build it,” Harj Taggar, a partner at the Silicon Valley incubator Y Combinator, told the Financial Times in a recent story, echoing the tech boom of the late 1990s.
But after a dizzying decade that ushered in everything from Google’s search engines to touch-screen tablets—and plenty of flops in between—how much more technology are consumers willing to adopt?
It’s a critical question that Mark Ratchford, Assistant Professor of Marketing at the Owen School, is helping companies explore with a new tool called the Technology Adoption Propensity (TAP) index.
“Effectively segmenting and targeting customers based on their likelihood to purchase and use new technologies could help firms better capitalize on their high-tech investments,” Ratchford writes in a recent paper for the Journal of Business Research that introduced the TAP index. The study was co-authored by Michelle Barnhart, Assistant Professor of Marketing at Oregon State University.
Similar psychological measurements have been developed previously to gauge a consumer’s willingness to use new technologies. For example, the Technology Acceptance Model (TAM) was introduced in 1986 to explore user acceptance of—or resistance to—various technology-based systems, including email, word processors and the Internet.
Another stream of technology-related marketing research led to the creation in 2000 of the Technology Readiness Index (TRI), which focused primarily on a person’s likelihood of adopting service-based technologies, often related to e-commerce.
The problem with the TRI, according to Ratchford, is that its questions depend on specific technologies, making it increasingly obsolescent since this once narrow area has grown to cover everything from social media to smartphones.
“References to specific technologies grounds the TRI in a particular technological era and limits its usefulness as a measure of overall technological readiness,” Ratchford writes. “Hence, a new scale that measures consumers’ attitudes toward a varied and flexible concept of technology that seamlessly incorporates the specific technologies of each new era would be useful to researchers and marketers.”
The research team developed an initial 47-item psychological battery, based on 17 items included in the TRI and 30 new ones. To make the TAP index shorter without compromising its effectiveness, Ratchford and his co-author winnowed the items down to 14. Those were then aligned with traits that contribute to technology adoption (“optimism” and “proficiency”) or that inhibit adoption (“dependence” and “vulnerability”).
To validate the TAP index, the study asked more than 1,300 survey respondents to answer a series of yes-or-no questions designed to assess their current use of technology products and services. The results were then matched up against findings from the TAP index itself, showing that those who scored highly on the TAP index were the same ones already using technology. Conversely, those with low TAP scores were not likely to be heavy technology users.
“We show that the TAP index can predict consumers’ technology usage behaviors across a range of high-tech products and services,” Ratchford writes. “We expect that, as a more succinct and timeless measurement tool than prior scales designed for a similar purpose, the TAP index will prove to be a robust and useful scale for academics and practitioners alike.”
A version of this article originally appeared in VB Intelligence on Sept. 30, 2011.