Living Behind the Curve – Technology Adoption in Alabama

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I’d like to preface this article by saying that it isn’t intended to bash Alabama.  I’ve lived most of my life here, and despite leaving several times to pursue job and educational opportunities, I keep coming back.  I love the south, and I want it to succeed.

These days I’m pretty hot on Birmingham.  We have a growing, passionate tech scene, the city center has sprung back to life and thanks to UAB there is a diverse influx of smart people moving here every day.  There’s a lot to like about living in Birmingham.  The cost of living remains low, the people are friendly, the weather is great and the food is expanding my waistline without draining my wallet.  However, Birmingham is a bit of a bubble.  It’s easy to get swept up in the spirit and energy of the city and forget about the context in which it exists.

Life Behind the Curve

Anecdotal evidence suggests that states like Alabama have systemic features that delay the adoption of innovations.  We look to other states and see things like ride sharing, solar power, deep broadband penetration, fiber networks or municipal wifi, open data / eGovernment initiatives, mobile payments, smart cities projects, technology startups and many other innovations and we wonder “Why not here?”.  It can probably be explained by several factors.

Everett Rogers originally proposed the “diffusion of innovations” theory, and along with it the notion that the diffusion of innovations roughly followed a bell curve distribution.  New ideas (or technology, in this case) follow a curve in which innovators and early adopters pick it up first, followed by early and late majorities, and finally by the laggards.

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Rogers describes the five groups thusly (Diffusion of Innovation, Rogers, 1962) :

Adopter category Definition
Innovators “Innovators are willing to take risks, have the highest social status, have financial liquidity, are social and have closest contact to scientific sources and interaction with other innovators. Their risk tolerance allows them to adopt technologies that may ultimately fail. Financial resources help absorb these failures.”
Early adopters “These individuals have the highest degree of opinion leadership among the adopter categories. Early adopters have a higher social status, financial liquidity, advanced education and are more socially forward than late adopters. They are more discreet in adoption choices than innovators. They use judicious choice of adoption to help them maintain a central communication position.”
Early Majority “They adopt an innovation after a varying degree of time that is significantly longer than the innovators and early adopters. Early Majority have above average social status, contact with early adopters and seldom hold positions of opinion leadership in a system.”
Late Majority “They adopt an innovation after the average participant. These individuals approach an innovation with a high degree of skepticism and after the majority of society has adopted the innovation. Late Majority are typically skeptical about an innovation, have below average social status, little financial liquidity, in contact with others in late majority and early majority and little opinion leadership.”
Laggards “They are the last to adopt an innovation. Unlike some of the previous categories, individuals in this category show little to no opinion leadership. These individuals typically have an aversion to change-agents. Laggards typically tend to be focused on “traditions”, lowest social status, lowest financial liquidity, oldest among adopters, and in contact with only family and close friends.”

Take a look at the words used to describe the innovators and early adopters.  Things like “financial resources”, “closest contact to scientific sources”, “advanced education” and “opinion leadership”.  Now look at the statistics about Alabama.  Alabama consistently sits near the bottom of rankings for educational quality and attainment.  We are one of the poorest states in America, ranking near the middle for GSP (Gross State Product) but close to the bottom for GSP per capita.  Our unemployment rate remains stubbornly high at 6.2% (3rd worst in the country) at the time this was written.  Alabama also has one of the highest income equality gaps (as measured by the Gini coefficient) in the United States.  Perhaps most worrisome is the fact that Alabama is one of the states that consistently loses college graduates year over year.  Statistically, one would expect to see fewer people that fit into the innovators or early adopter category in a state with Alabama’s economic and educational profile.

We can see similar trends in the way late adopters and laggards are described.  Words like “traditional”, “little financial liquidity” and “older” are used to describe folks on the trailing edge of the adoption curve.  Tradition and heritage are a big part of the culture in Alabama and according to the 2010 census Alabama ranks in the bottom 10 in terms of the percentage of the population that lives in urban areas.  Population density means more opportunity to be exposed to new ideas and to have a larger social circle.  Age also plays a role.  Alabama isn’t the oldest state in the union, but it is in the bottom half by average age.  Culturally and demographically, Alabama exhibits many characteristics that lean toward later adoption of innovation.

It seems that the Rogers’ theory explains in large part why we don’t see faster and deeper technology adoption in this state, but it doesn’t tell the whole story.

The Effect of Policy

The effect of public policy on innovation adoption is profound.  Several categories of adopter in Rogers’ model indirectly reference cost, usually in terms of an adopter’s financial resources.  It stands to reason that if the cost is higher for a given innovation then the financial resources required to adopt it will also be higher, thus reducing the pool of people that could fall into the innovators or early adopters category even if they were otherwise inclined to pick up a new innovation.  Policy can directly influence adoption cost by driving it down through subsidy, favorable tax treatment and streamlined regulation.   It can also go the other way and drive cost up by making adoption more complex, favoring competing legacy technologies with tax breaks or implementing regulatory hurdles for new competitors.

Unfortunately Alabama’s leadership hasn’t, well, led.  Take solar power as an example.  This innovation is seeing broad adoption across the US, helping to offset power usage during daytime peak periods and providing good paying technical employment.  Some states have taken steps to accelerate solar rollout, implementing net metering requirements, tax credits and other policies to drive down the cost and make it accessible to more adopters.  Alabama, despite having ample sun as a resource and needing the extra power during sunny hot days to offset the peak loads created by air conditioning has not only taken almost no meaningful steps toward making solar more affordable but has in fact implemented unnecessary regulatory hurdles.  Ride sharing provides another example.  The Birmingham City Council fought to keep ride sharing services from launching in the city, asking for onerous regulation that almost kept this innovation out entirely.  Now Alabama is proposing mandatory content filters on all mobile devices, with a fee to remove it.  This sort of thinking absolutely drives down adoption by reducing choice and increasing costs.  I’m not going to speculate about the reasons for all of these artificial barriers, but the outcomes are clear.

Automation, Adoption and Jobs

Why do we need to be concerned about technology adoption in Alabama?  In a word:  Jobs.  Right now a lot of job growth (especially automotive) in Alabama is driven by low cost labor, which is in turn enabled by the low cost of living in the state.  The massive tax breaks the state gives to large employers don’t hurt either.  Other large employment categories in the state include retail and cashiers, material handlers, agriculture and truck drivers.  All of these jobs are ripe for disruption by automation.  As soon as the price of automation drops below the cost of labor, these workers will begin to be replaced.  This is, in my opinion, the best case scenario.  The worst case is that our lack of technology adoption will lead us to resist automation, which will ultimately make us uncompetitive and lead to the current influx of economic activity turning quickly into an exodus.  If we don’t solve the adoption problem, not only will we lose the economic growth we have fought so hard to gain, but we won’t be able to ride the next wave of jobs that will come from automation.

What do we need?

It’s a lot to ask, but what we need are massive investments in all levels of education, restructuring of our tax system to put the means for adoption into the hands of more people and more innovation friendly regulation all coordinated in a single large push to prepare us for the future.  We have an opportunity to use our currently improving economic situation to make the kind of strategic investments that will prepare Alabama for the next century, but we need to start now.  Will our leaders answer the call?