This paper elaborates an integrated framework for understanding diffusion as a process of creative adoptions in the business
sector. Within the context of the economics of localized technological change, adoption is viewed as a complementary component
of a broader process of adjusting the technology when unexpected events in the product and factor markets push firms towards
a creative reaction. When the stock of adoptions exerts a suitable combined effect both on the gross profitability of adoption
and on the costs of adoption, such that the net profitability of adoption and hence the rates of new adoption follow a quadratic
path, the dynamics of creative adoption can engender a S-shaped diffusion process.
Keywords localized technological change - net profitability of adoption
JEL Classification O3 - L1