When people talk about the diffusion of innovation they are talking about how the innovation spreads across a social network in terms of people adopting (accepting) that innovation.
The social network could be a particular department in which the innovation was introduced or it could be an entire company or other organization, it could be a country or it could be global. Also it could refer to a group of people related to a particular market, profession or industry
(Photo Credit: Mark Skipper)
The diffusion of innovation process is often closely related to marketing. You might have implemented an idea and created the most useful, valuable, interesting product ever however if nobody knows about it then it will be very unlikely that it will be successful.
The word diffusion itself is in fact a scientific word related to how particles randomly move about or (“diffuse”) in a liquid or a gas. Over time the particles become distributed randomly and uniformly with diffusion continuing to occur. The random motion of the particles spreads from areas with high concentration to areas of lower concentration. Having read this you can no doubt visualize how this can be thought of as similar to the spread of innovative ideas.
People who use your innovative product or service are referred to as adopters. To increase your number of adopters and spread (diffuse) your innovation faster you need to determine who your potential adopters are.
Think of the market that your product or service is aimed at. Is it a small niche market in which there is a limited number of potential adopters or is it something that most people would be able to afford / want to use (specialized versus generalized) or is it in fact geared more towards business use? Also think about what your product or service competes with if anything?
Asking such questions can help you determine the size of your potential market. Once you have determined the size and category of your potential adopters you then have to start thinking of ways to increase the rate of adoption of your product or service.
To learn more about the natural rate of adoption for an innovation see adoption curve or diffusion curve.