What Sparks Tech Adoption? Learning Competitors Are Ahead

Firms start their own tech upgrades after learning peers had done their own, study finds

The U.S. and its nation peers forgo a lot of revenue every year by giving tax breaks to companies that invest in technology upgrades. These financial incentives — for example, allowing a factory to immediately deduct the full cost of installing better robots or, say, subsidies for green energy projects — help fund productivity advancements that lead to larger, wealthier tax bases.

A paper suggests a cheaper way to encourage such investment. Simply giving companies information about how much their competitors use a target technology appears to spur laggards to action, according to preliminary findings by Harvard’s Zoe B. Cullen, Goethe University Frankfurt’s Ester Faia, Banca d’Italia’s Elisa Guglielminetti, UCLA Anderson’s Ricardo Perez-Truglia and Banca d’Italia’s Concetta Rondinelli.

Using the Bank of Italy’s long-running INVIND survey, the researchers asked about 3,000 Italian firms to estimate the share of firms, similar in sector and size to its own, that in 2025 were using two technologies: robotics and AI. They used responses from previous years to understand how many and what kinds of companies actually have adopted, or had immediate plans to adopt, each technology.

Italy is one of the world’s largest exporters of industrial machinery and factory automation systems, including robots and the tools and parts they require. As the second-largest manufacturing base in the EU, it’s also a major user of robotics within its borders. However, Italian industry, generally, like other factory-heavy economies, has adopted AI more slowly than those more reliant on service industries.

Some 93% of survey respondents underestimated, often wildly, competitor adoption rates for one or both technologies, the researchers report. On average, they were about 25 percentage points short of correct answers. Overestimations were rare.

The researchers revealed actual adoption rates of peers to a random half of the respondents and compared their future plans with matched control groups that got no new information. About 44.3% of firms from the treatment group subsequently reported plans to adopt robotics by 2027, compared with 37.6% in the control group, according to the findings. These effects were concentrated among firms that most underestimated competitors’ technology adoption. Among this group, intended robotics adoption was about 11 percentage points higher than the control group. Actual adoption data had little or no effect on firms that got close to correct answers in their estimates, the findings suggest. 

The findings suggest that fear of falling behind competitors, or enabling new competition, was a strong motivator for spending on robotics. Firms with large markups — typically, they can charge a lot because direct competition is limited — were most likely to instigate their own tech plans when given correct information about adoption rates, according to the study. Small firms responded strongly too, perhaps as a matter of survival.

A Change in Plans?

On the other hand, plans for AI adoption changed little throughout the experiment, the researchers report. About half of the firms surveyed already expected to adopt AI by 2027. In the control groups, 48% had plans for predictive AI and 52% for generative AI. They generally got closer to the mark when asked to estimate AI adoption rates than robotics rates.

The researchers note that these circumstances may have obscured a larger effect from learning actual adoption rates. Information about the competition’s technology appears especially effective at jump-starting projects when the technology in question is already in place at many competitors, but not yet universally used, the research suggests.

The researchers did not follow up with firms to find out if they implemented their professed upgrade plans. However, they note that a future iteration of this study could uncover this information in following years by re-surveying these firms, perhaps adding tax  and customs data for the analysis.

The authors note that the EU has invested hundreds of billions of euros in recent years on advancing technology in both public and private sectors. Information campaigns aimed at highlighting the competition’s technology, they suggest, is an inexpensive add-on to any financial incentive. Learning that your company is a luddite in its own field appears to be a great motivator for tech adoption.