Commentary: A glass half full

Commentary: A glass half full

By Jed Kolko, Principal Analyst

Technology optimism peaked during 2000--just like the stock market. Optimism has since fallen, despite the spread of consumer technologies and their wider adoption by the mainstream. But in the past few years, the ranks of the technophobes have shrunk.

Since the inception of its Technographics--a comprehensive quantitative research program available for determining how technology is considered, bought and used by consumers and businesses--Forrester has found "technology optimism" to be the best predictor of technology adoption. As a rule, optimism should increase over time as consumers become more tech-savvy, but the reality is not so simple. Analyzing data from Forrester's Consumer Technographics North American Benchmark Studies from 1998 to 2003, we found that optimism:

• Rose steadily through 2000. Technology optimism rose steadily until the end of 2000, when 51 percent of consumers were optimists, compared with 47 percent at the end of 1997. The largest increase was during 2000--the year that the stock market peaked--although each year saw significant growth in the share of optimists. Growing optimism reflected the diffusion of online activities and new devices throughout society, and it mirrored the excitement in the press and pop culture about technology making our lives easier and more enjoyable.

• But has fallen since 2001. Optimism is now higher than it was at the dawn of Technographics. But starting in 2001, optimism went into slow reverse, inching down from 51 percent to 50 percent at the end of 2002. How do we explain the paradox of ebbing optimism while technologies like broadband, digital cameras and DVD players boomed? Tumbling stock prices and layoffs undercut consumers' enthusiasm for technology companies, even while people kept buying the products.

Finding a middle ground
Even though technology optimism is off from its earlier highs, consumers are not reverting to the attitudes that they held in late 1997. Instead, they've been demonstrating a new moderation.

• The extremes yield to the center. The share of moderate optimists has grown from 55 percent to 60 percent and shows no sign of turning back. At the same time, both extremes have declined since late

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• Optimism has grown most among older consumers. The older you are, the less technology optimistic you are. That edict was especially true five years ago and still holds today. But consumers 55 and older have become dramatically more optimistic, while the optimism of other age groups has held relatively constant. In fact, the optimism gap between those younger than 25 and those who are 65 and older has shrunk by one-fifth. And with new retirees--unlike previous generations--comfortable with using the Internet from their working years, the optimism age gap will continue to melt as retiring baby boomers take their place in the sun.