Abstract
The paper presents an automated framework for forecasting the diffusion
of innovations. The framework utilizes existing diffusion information
from any market areas or similar products introduced to the markets
earlier. The existing data, be it little, enormous, or not present
at all, defines a corresponding decision path in the model, and following
the path generates a forecast by maximizing the available information.
An information-processing technique called a self-organizing map,
SOM, was used to generate a map of the economic, technological and
social market characteristics that have been found to affect diffusion.
This map is used as a basis for finding suitable analogies for predicting
the diffusion of an innovation in a specific market. The framework
is applied in the context of predicting the diffusion of cellular
subscriptions and Internet use worldwide and, separately, in the
European Union, including the new member states. In the experiments
the model yielded significantly better results than a regression
using the Bass model. The method allows analysts to concentrate on
more qualitative issues and the system to perform complicated computing
operations. Furthermore, the system is self-refining since its accuracy
continuously improves when new and more up-to-date information is
added to the database. The proposed framework and methods aim to
move present theory toward more practical and automatic prediction
tools for company analysts and diffusion researchers.
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