Examining the adoption of blockchain technology in the diamond industry : Benefits and challenges of embracing disruptive innovation in conservative sectors

Abstract: Industries with conservative mindsets are known for being reluctant toward adoption of new technologies and resistant to change. The diamond business is one of those examples that encounter challenges in implementing disruptive innovations like blockchain technology despite its potential benefits. The purpose of this thesis is to explore the antecedents influencing adoption of disruptive innovations in conservative industries, with a particular emphasis on benefits and challenges of embracing blockchain technology in the diamond industry. Employing a qualitative research approach, this thesis utilizes semi-structured interviews with the four industry experts from different companies. The empirical data is analyzed using the Technology Acceptance Model, the Innovation Diffusion Theory frameworks, and contextual data.Findings reveal that most of the antecedents are not favorable to the adoption of disruptive innovations in traditional sectors. Competition was found to enhance the adoption process, while resistance to change, industry heritage, uncertainty, and dependency on industry leaders have unfavorable effects. Transparency, customer trust/pressure were found to have both positive and negative impacts. Findings show that benefits of blockchain technology implementation outweigh its challenges for the diamond industry, however, its observability, and complexity, hinder the adoption due to the fact blockchain is a relatively new technology that is still hard to grasp for most industry professionals. This thesis contributes to the body of knowledge by linking findings to the Technology Acceptance Model and Innovation Diffusion Theory frameworks, exploring deeply conservatism within industries, and identifying antecedents as obstacles and opportunities to widespread blockchain acceptance. Additionally, the researchers provide a solution for observability in the form of an in-depth marketing strategy, which aims at creating a differentiation between ‘blockchain diamonds’ and naturally mined diamonds.