Consumer in the innovation economy: sociocultural aspects of formation and functioning

Recently scientists have been actively discussing the formation of innovative personality. Psychologists have been trying to identify its main features, teachers –develop methods of its formation, sociologists – analyze the role of innovative personality in social processes and social causality of development of personal traits that promote effective innovation, politicians – emphasize the need to form of the above personality type. We can say that the formation of innovative personality becomes a social order of the modern society.

The issues of innovative personality formation are in focus due to the characteristics of modern economy development, aimed at producing innovative goods and services, as well as implementing and using innovative technological processes.

Large-scale innovation processes that characterize the modern stage of capitalist economy development are caused by the impossibility of extensive development of traditional industries and sectors and their functioning in terms of commodity overproduction and overconsumption. In these circumstances the creation of innovative products is not just the main competitive advantage of the manufacturer, but the condition of its survival on the market.

At the macroeconomic level the production of innovative products is considered as the main engine of economic growth and on the global market the issue of successful innovation is becoming one of the most important driving forces of the state competitiveness.

The need to constantly carry out innovation activities in the production imposes special requirements to the personal characteristics of the employment process participants. K. Marx wrote: “The nature of work in the capitalist production method determines the need for specialized educational training of the workforce. The main objective of such training is development of certain personal traits...” [12, p. 391].

Thus, on the one hand, the society is interested in the formation of innovative personality as a manufacturer of innovative products and, therefore, the research in innovative personality as the main subject of the innovation economy is usually focused on the issue of innovators, their personal qualities and motivation for innovation activity.

On the other hand, according K. Marx, capital can increase only through the growth of surplus value and “production of relative surplus value...requires production of new consumption... creation of new needs... the production of new needs” [9, p. 52].

Therefore, the effective functioning of the innovation economy demands creation of both new products and new needs, as produced innovative products should be consumed. It makes us consider qualitative characteristics of innovative personality in a different aspect, particularly: the innovative personality should require innovative products and act as a consumer of innovative products.

According to V.M. Nurkov, there is some asymmetry in the modern Russian innovation discourse – the problem of the innovator and the genesis of motivation in innovative practices are viewed as more relevant and little attention is paid to the urgent problems of adaptation to innovation and “consumption” (use) of innovation [15, p. 69].

However, foreign studies show that the role of the consumer in the innovation economy is becoming more decisive and even more influential than the role of the manufacturer.

For instance, Z. Bauman states that competitiveness, efficiency and profitability of capital depend on consumers, and its routes are determined by the presence or absence of consumers or the ability to produce consumers, create and then expand the grounds for the proposed ideas [3, pp. 164-165].

According to K. Nordstr о m and J Ridderstr a le, “in the society of overproduction the consumer is more than a king, the consumer is a mother of all dictators” [14, p. 98].

So, Carleton believes that “the scientific community has recently spoken not about “triple” but “quadruple” or “complex spiral”: the consumer, a citizen of the country, plays an important role, providing feedback, interacting and influencing directions of new technologies development [8, p. 24].

In addition, today the consumer for the manufacturer is a source of ideas for improvement of already produced goods (i.e. modifying innovation) and development of new products.

Intensive research in consumer innovativeness is being conducted abroad due to the increased role of the consumer in the innovation economy functioning. In particular, there are such types as “natural innovativeness” or “innovative predisposition”, manifested in the subject’s generalized orientation on the perception and acceptance of new brands and products and “specific innovativeness” in relation to a single product or a category of goods, defined as the subject’s orientation on the adoption of new products and services.

The studies of consumer innovativeness analyze not only individual, but also group characteristics. So, researches in family consumer innovativeness are devoted to each family member and the family system as a small group, especially to the pair “husband–wife”.

There is a special notion: “husband-wife innovativeness” (innovativeness in the system “husband-wife”) [19, p. 149]. As for other options of the innovation group analysis, they can be selected by the degree of readiness to consume innovative products of the following categories of consumers: innovators, early adopters, early majority, late majority, and “laggards” or conservatives.

Consumer-innovators are considered as a key consumer group for the manufacturers to focus their attention, as testing the advantages and disadvantages of innovative products, consumers-innovators become a source of information for other categories of consumers, and thus, influence their consumer preferences.

So, their perception of a new product influences its acceptance by other categories of consumers. The interest of producers in the customers-innovators’ positive reaction on innovative products leads to the study of the personal characteristics of innovators, their motivation and to the analysis of the consumption standard, which is understood as relatively stable preferences for goods and services, ways and methods to draw out practicability, reflecting the sociocultural and economic characteristics of consumer-innovators as a particular social group. E. Rogers, in particular, identifies the following characteristics of consumerinnovators.

From the perspective of sociodemographic characteristics of consumers, innovators and close to them early adopters are relatively young people with a high social status and a favorable financial position [10, pp. 414-415].

From the point of view of psychological characteristics, they are distinguished by their predisposition to risks, great and not always reasonable expenses; they are characterized by easy communications, consumer confidence and high speed of decision making. Innovators rely mostly on an emotional, but not rational component, as they seek to get a new experience (no matter if it is positive or negative, risky or safe) and enjoy new things.

They take pleasure not only in new things, but also in all risks associated with the purchase and use of an unknown commodity; however, variability is a reverse side of their commitment to innovation, as it complicates the formation of loyalty to a particular brand or material incentives.

Summing up the above, we can reveal the following basic points in the consumer behavior of innovators: perception of a new product as certainly valuable that has absolute advantages over an old one, domination of the emotional component and pursuit of risks.

The consumers-innovators’ behavior serves the interests of innovative products manufacturers, not only because consumers-innovators spread information and impressions about the new product to other categories of consumers.

Forced to act in the conditions of uncertainty about the prospects of markets development and consumers preferences, caused, in turn, by the economic situation instability, facing numerous risks associated with the adoption and implementation of new ideas, solutions and technologies, the enterprises are interested in reducing the uncertainty of the innovative activities results and, if possible, in minimizing the risks.

The behavior of consumers who are ready to buy a product just because it satisfies their need for new experiences, relying only on their emotions (the impact on which facilitates the process of promoting goods) and being driven by the word “innovation” or the definition of “innovative” added to the name of the product becomes the marker to stimulate consumption and provides quick and virtually guaranteed sales of new products without regard to real innovation of the product.

However, according to the already paradigmatic work of Everett Rogers called “Diffusion of innovations”, innovators make up approximately 2.5% of the total number of consumers; the early adopters – 13.5%, early majority – 34%, late majority – 34%; “laggards” – 16% [11, p. 532].

Thus, innovators and early adopters together, first responding to new products or services, make up only 16% or 1/6 of the total number of consumers.

Even researchers, who are critical of such calculations for excessive clarity of proportions, recognize the scarcity of these categories.

The insignificance of innovators and early adopters in quantitative terms relative to the total number of consumers results in the fact that their total budget is negligible for most industries.

Moreover, the product’s further promotion to other categories of consumers requires considerable effort, as these categories are guided by other considerations when purchasing goods and their motivation is fundamentally different from that of innovators and early adopters.

Meanwhile, according to the marketing analysts, the consumer behavior modeling, consisting in the formation of standard consumer behavior, is one of the ways to ensure effective commercialization of innovative technologies and innovative products [13].

According to O.U. Yuldasheva, entrepreneurship tends towards the purposeful creation and promotion of consumption standards in the society, because it guarantees long-term stability of demand; the obedient and friendly customer provides the company with a stable and growing consumer market in the long term [18].

In our opinion, the transformation of the innovation process into the critical element of success, associated with the constant production of innovative products and their reduced life cycle, encourages enterprises to promote and spread the consumers-innovators’ consumption standards in the society.

However, the consumption standard is adopted according to its impact on human consciousness, its transformation in the right direction and the formation of a certain lifestyle.

In turn, the change of individual and collective psychology due to the targeted promotion of innovative products consumption standards and the wide formation of the consumer-innovator can result in rather ambiguous consequences not only for the society as a whole.

Let us consider them in more detail.

Formation of people’s orientation on the absolute value of innovation was first observed in the culture of modernism that considers innovation as something original, new, independent from others [6, p. 227].

Having been widespread primarily in the arts, this value setting is now used in the economic relations and applied to innovative products. The modern society is just penetrated by the “race for innovation” and the Russian researchers works already contain statements such as “the population must perceive innovation not as a disaster but as an absolute value” [4].

On the one hand, the human desire for innovation and new experiences is evaluated by psychologists as one of the biological needs, caused by neuropsychological features. L.I. Bozovic notes that “the need for new impressions is generated by inclusion of the cerebral cortex into the life of a child, which requires irritants that cause its activities and thereby ensure its morphological and functional development. Satisfaction of this and other biological needs is gradually followed by pronounced positive emotions; and the need for innovation is beginning to acquire some specific features, characteristic of the spiritual needs of a person” [17].

Indeed, in the countries with a high level of life where basic needs are already satisfied, the consumption of new goods is a tool to not meet biological needs, but to fight boredom by means of irritants, such as innovation, change, inconsistency, uncertainty, risk, etc. [11, p. 130].

In addition, the consumption of new goods becomes part of self-esteem and selfactualization [16, pp. 72, 188]. In our opinion, the consumers’ desire to buy new products only contributes to the spread of the consumer standards of innovators in the public consciousness.

On the other hand, the widely encouraged pursuit of innovation and its consolidation in the public consciousness as an absolute value single out several problematic aspects.

First, according to the psychologists, the need for innovation is insatiable.

Second, according to M.S. Kagan, high abundance of innovations provides people and, especially, children with the sense of naturalness of continuous changes, renewal of environment, living conditions and assimilated knowledge, norms of behavior and speech.

Thus, traditional beliefs about the existence of some constants of thinking and behavior, caused by certain stability of human existence in the world, are disappearing from the public consciousness finally and completely; now everything seems to be unstable, relative, endangered and, therefore, deprived of any real value [6, p. 272].

There is another problematic issue. According to A.I. Sosland, commitment to innovation can be manifested in three ways: in the perception of new things, that is pursuit of passive new experiences; in the pursuit to change people’s own life and in the pursuit to create new things, that is, produce new values and meanings [17]. Can people be satisfied with their selfdevelopment and production of new things by only striving for passive new experiences and constantly consuming new products? In this case, the society, having numerous consumers of innovative products, risks losing their creators.

Pursuit of risk is another feature of consumer-innovators’ behavior. Though it is frequently used, the concept of risk is quite hard to define.

However, many definitions of risk presuppose the adverse outcome of an action, act or activity. So, in the “Dictionary of the Russian language” by S.I. Ozhegov risk is understood as a possible danger (threat) [5, p. 13]. In our opinion, the consumers-innovators’ behavior is appropriately characterized by the definition of risk given in the “Psychological dictionary”.

So, risk is an action directed at the attractive goal, which achievement is associated with the element of danger, threat of loss, failure [5, p. 13]. The modern society is characterized by risky behavior (on the one hand, considered as dangerous, including for life, and, on the other hand, attractive for those who implement these form), the variety of risks and their intensity, increasing at a rapid pace.

Thus, the society can be identified as risky. The increase in the number of risky behavior is a response to objective changes in public life, such as aggravation of the crisis, growth of chaos, uncertainty, massive introduction of insufficiently tested and high-risky innovation.

At the same time, the society with innovative economy is interested in promoting risky behavior and securing these forms as socio-cultural norms.

So, the readiness to risk is considered in the psychology of entrepreneurship and management as an important personal property that determines the success of economic and management activity, while creating innovative products.

Consumption of innovative products is also associated with a high degree of risk, especially in the case of radical innovation, as the product is unique, not familiar to consumers, and, therefore, they risk losing money, with no guarantee of satisfying needs. The combination of objectively determined trends of the society’s development and the demands of the innovation economy leads to the fact that risky behavior is formalized as a standard of conduct.

Thus, constant risk becomes an important component of the mass culture character; extreme behavior is cultivated in the public consciousness as a way of life. Risk becomes an object of social mythology, determines social goals and objectives of the individual. It is perceived (consumed) uncritically [1].

Risk institutionalizing, becomes a factor in self-realization and socialization.

In our opinion, the negative consequences are the following: the realization of the risky behavior, considered as a sociocultural standard, apparently, can not be limited only by the production and consumption of innovative products. The psychologists believe that people who seek to risk in one situation will seek to take risks in other situations, thus increasing the number of risky behavior forms in the society.

There is a vivid example: more than 30 extreme sports have appeared for the last 20 years. These sports are highly risky as people can be easily injured. The emergence of new types of risks in the society makes it highly risky, unstable and prone to selfdestruction.

What is more, the spread of such risky behavior in other spheres of life can result in the proliferation of adventurism, voluntarism and subjectivism, which, in turn, can lead to the slowdown of social progress and various socio-economic and moral costs.

However, the person likely to engage in risky behavior is characterized by the depreciation of basic existential values and the dominance of biological needs, particularly, needs for psychoactive substance stimulation. The increase in the number of persons with such characteristics can have a negative impact on the society as a whole.

As for the third aspect of the consumers-innovators’ consumption standards, the promotion of the emotional component in consumption is also a characteristic feature of modern economic relations.

The fact that consumption is becoming less rational and more emotional is, on the one hand, objectively determined by the following factors.

First, the reduced rationality in consumer behavior is caused by the high degree of uncertainty due to active innovation activity.

The psychologists D. Kahneman and A. Tversky’s studies of person’s decisionmaking on the market reveal that in the conditions of uncertainty people use simplified strategies for solving complex problems, namely: they rely on the solution availability (the solution that comes to mind first), the precedent (their own or other people’s experiences), the consolidation and adaptation (i.e. the use of a consistent approach to achieve the goal, even if the environment shows the change of recent trends) [18]. Therefore, in the conditions of uncertainty, people tend to behave irrationally, follow intuition and show inconsistency.

Second, in the conditions of innovative economy the consumer can not simply adhere to the rational approach when buying a fundamentally new product, as there is no similar item.

Therefore, it is impossible to compare the quality, price and competitive advantages. The appearance of new modifications of familiar consumer goods, constant complication of the product composition, its technical characteristics and creation of products with high consumer properties lead to the fact that the buyer can not compare the change in quality and price due to the lack of special knowledge.

Thus, the ordinary buyer can evaluate only a very limited range of simple products rationally; the main comparison indicator is external characteristics of the product.

In addition, it is difficult to rely on personal experience due to the constant updating of the models; that is why the possibility to make rational decisions also decreases.

In turn, the lack of information for conscious actions and the insufficient fund of conscious behavior lead to the use of emotions in the behavior. The emotional and impulsive actions are caused by the low level of conscious regulation.

Thus, the lack of rationality in the purchase of innovative products is compensated by the increased role of the emotional component. If the product belongs to the highest level in the hierarchy of the consumer’s needs, the emotions gained from the purchase become increasingly important [16, p. 188].

Z. Bauman characterized this type of consumerism in the following way: “Today the consumer game is not only called as greed, interest and ownership, not only accumulation of wealth in its material, tangible sense, but passion to new, hitherto unexperienced sensations.

Consumers are, primarily, collectors of sensations; they collect things only secondarily, as a consequence...” [2, p. 120].

The manufacturer is interested in increasing the emotional component of the consumption process, as affecting the emotions the enterprises have the opportunity to attract customers’ attention and program them for the purchase, ensuring the potential demand. According to the innovative business researchers K. Nordstrom and J Ridderstrale, “the real competition should be based on the fact that is rarely discussed in the business world: emotions and imagination.

To cope with abundance, it is not necessary to produce the same thing in a greater number, it is necessary to introduce the elements of sensationalism and sentimentality into production. The age of abundance is gradually turning into the era of emotional attachment” [14, p. 16].

Meanwhile, emotions represent an evolutionarily earlier mechanism of behavior regulation than mind and, therefore, the emotional reaction leaves behind the process of man’s realization of the situation.

The emotional level of reality reflection is characterized by more rapid, immediate and impulsive reactions on the outside world pressures.

What is more, under the influence of emotions people tend to choose more simple solutions to life situations and can be easily influenced by other people. Disraeli said, “If you need to convince the masses in something, this process can be started only with the impact on emotions – on the development of logical reasoning the masses will not spend any effort or time”. U. Gavin had a similar opinion: “Mind requires the highest degree of discipline, concentration. Ordinary impression is much easier. Mind repels the viewer, the logic bothers him/her. Emotions stir, they are closer to the surface, are easier forged” [7, p. 204].

These features allow some researchers to consider the emotional impact as a prerequisite for the consciousness manipulation. It should be also noted that modern psychologists tend to equate emotions with imbalance, instability, high anxiety and, therefore, the formation of emotional consumers meets the interests of innovative products manufacturers fully.

Modern innovative economy is characterized by the reduced life cycle of an innovative product, and that is why its consumption by a maximum number of people in a relatively short time determines the highest profit.

According to Z. Bauman, “the necessary time reduction is best achieved if consumers can not focus on a concrete subject, they are impatient, impulsive and restless, and most importantly, become excited easily and lose interest the same way” [2, p. 118].

It can be assumed that the habit to follow the emotional impulse when making decisions (first of all, concerning the purchase of goods, and then in other spheres of life), which is a consequence of constant use of the emotional attitude to reality and which is consciously produced by the innovative product manufacturers, can cause the consumers’ reluctance to use rational mechanisms, in principle. So, not only innovative products producers, but all interested parties can manipulate consciousness of such people.

Thus, the consumers’ role in the innovation economy and the specifics of its functioning at the present stage encourage innovative products manufacturers to model consumers’ behavior by disseminating certain consumer standards, in particular, consumers-innovators’ standards. These processes are associated with the changes in individual and collective psychology in the direction of forming the orientation on the absolute value of the new, encouraging risky behaviors, reinforcing them as socio-cultural norms and preferring the emotional component in consumption to the rational. The consequences of such processes are ambiguous and can have negative consequences for the innovation economy and for society as a whole.