Francis Pereira, Ph.D.Director, Industry Research

Institute for Communication Technology Management (CTM)

Maslow’s Hierarchy of Needs and ICT: Challenges of End-User

Adoption of Digital Life

47th European Congress of FITCELondon, United Kingdom

September 23, 2008

2

Hierarchy of NeedsWhy We Do the Things We do

Maslow’s Hierarchy of Needs

Individuals must satisfy lower level of needs before higher levels.

Requires sufficient income to satisfy lower needs.

Once threshold point is attained, consumption levels remain constant or decrease.

3

Hierarchy of NeedsWhy We Do the Things We do

Maslow’s Hierarchy of Needs

What is the empirical evidence (U.S.)?

What are the implications for infocomm technologies?

Can infocomm technologies address Maslowian needs?

Why is this important?

What does CTM’s research show?

4

Consumer Spending Trends

0

10

20

30

40

50

60

70

80

90

100

1984 1996 2002 2005

Per

cent

age

of A

nnua

l Exp

endi

ture

s

All Other

Education

Entertainment

Healthcare

Transportation

Apparel & Services

Telephone

Housing

Food

U.S. Bureau of Labor Statistics, 2006

Addressing Maslowian Needs

Consumer spendingpatterns have been

stable for householdtypes (ethnicity, age, income, occupation)

across time

5

Hierarchy of NeedsRole of InfoComm Technologies

Maslow’s Hierarchy of Needs

Interactive Multimedia Messaging, Conferencing

Tele-Education Multimedia

Virtual Work Outsourcing

Tele-Health, Electronic Health Records, etc

Multimedia Education

Monitoring E-government service

Tele-Work

6

Mode WORK SOCIAL HOME

Interactive Communication

Education

Labor

Sustenance

Health & Maintenance

Commute-time

Down-time & Leisure

Rejuvenation

Entertainment

Other

Less than 1% 1% to 10% 11% to 20% 21% to 50% 51% to 75%

Use of information communication technologies on the “Grid” (percentage use”)

Defining Life-Segments

BASIC LIFE

BASIC COMMUNITY

DIGITAL HOME-LIFE

DIGITAL WORK-LIFE

DIGITAL LIVING

DIGITAL COMMUNITY

Inten

sity o

f ICT

Us

eL

OW

HIG

H

7

Basic

Lif

e

Digital Community

Digi

tal

Wor

kDi

gita

l Liv

ing

Digi

tal

Hom

e

Basic

Co

mm

unity

Mapping Key Consumer Life-Segments to Maslow

The Internet

Personal computer

Pay TV(cable, satellite, fiber optic)

Broadcast AM/FM radio

Newspapers

Video game consoles

Satellite radio7 17 72 3

14 25 60 1

14 25 59 2

16 44 39 1

21 41 37 1

26 45 27 2

36 31 31 3

36 39 22 2

41 31 25 2

62 28 7 4

64 27 5 4

0% 20% 40% 60% 80% 100%

8-10

3-7

0-2

Don't know

Cell phones/smartphones

Magazines

Broadcast TV

Portable media devices

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Sources of Entertainment

• The Internet is equally important to all demographics.

• The Internet is more important to those starting a business in the last 12 months, first generation citizens, and those not born in the United States.

• Cell phones and smart-phones are more important to parents, those living in urban areas, first generation citizens, and those not born in the United States.

• Pay TV is more important to those with higher incomes.

9

Online banking

Online bill payment

Online shopping

Online health informationWeb sites

Instant Messaging

Social networking sites

Online photo sharingWeb sites

25 34 28 14

25 26 35 14

29 31 28 13

35 30 26 10

37 38 17 8

38 21 25 16

42 34 17 6

54 18 18 10

58 17 16 9

0% 20% 40% 60% 80% 100%

8-10

3-7

0-2

Don't know

Online credit cardmanagement

Online job search sites

Casual online gaming

Music stores

Remote desktop connections

Online documents sharing

Blogs

Virtual private networks9 18 39 34

10 23 47 20

11 17 48 24

15 26 35 24

16 20 40 25

19 25 33 24

20 27 37 17

24 33 31 12

0% 20% 40% 60% 80% 100%

8-10

3-7

0-2

Don't know

Peer-to-peer applications(eMonkey, Kazaa, LimeWire)

Multiplayer onlinegaming MMOs

Value of Internet Technologies

Bill payment, banking services and money management are viewed as valuable

Remote desktop connections and VPNs are not viewed as valuable

Q. 10 How valuable are the following technologies to you?(1=Not valuable at all; 10=Very valuable

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Hierarchy of Needs and ICT

Comfort With Use of Online Technologies

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

12-17 18-24 25-44 45-64 65+ Total

Agree Neutral Disagree

As many of younger respondents as older respondents are comfortable with use of online technologies.

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0% 20% 40% 60% 80% 100%

I am generally comfortable with using online technologies such as the Internet

I find online applications and technologies easy to access and use

I find that current online applications are useful in addressing the important

challenges/issues in my everyday life

I would be more likely to use online technologies if they addressed the most

important challenges/issues in my …

Agree Neutral Disagree

Hierarchy of Needs and ICT

Use of Online Technologies

12

Hierarchy of Needs and ICT

Usefulness of Online Technologies in Addressing Challenges of Everyday Life

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

12-17 18-24 25-44 45-64 65+ Total

Agree Neutral Disagree

Only about 30% of all respondents across all age groups see online technologies as useful in addressing the daily challenges they face

13

Hierarchy of Needs and ICTRanking of Top 5 Concerns

0 10 20 30 40 50

Major environmental disaster

Major health catastrophe

Major terrorist attack

Maintain my fitness levels

Child's health

Manage friendships

Ability to pay/invest for retirement

Having/finding personal happiness

Manage my weight

Relationship with spouse

Ability to pay/manage bills

14

Respondents View on Importance of Issues

0% 20% 40% 60% 80% 100%

Concerned about the cost of education

Concerned about the quality of education

Concerned about paying my bills

Concerned about the quality of healthcare system

Concerend about the health of my family members

Concerned about the cost of healthcare

Agree Neutral Disagree

Hierarchy of Needs and ICT

15

US: How important are the following as goals in your life?

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Material wealth and possessions

Having artistic ability

Being good looking

Having athletic ability

An active social life

Having as much formal education as possible

Having lots of leisure time

A high income

Having a rich religious or spiritual life

Having children

Having the respect and admiration of others

Having an active, fulfilling sex life

Success in a job or career

Having close friends

A happy marriage

Having excellent physical/mental health

Having a good relationship with my family

High Medium Low

Hierarchy of Needs

16

Importance of family relationships - by age

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

12-17 18-24 25-44 45-64 65+ Total

High Medium Low

Importance of excellent health - by age

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

12-17 18-24 25-44 45-64 65+

High Medium Low

Hierarchy of NeedsImportance of Life-Goals

Life-Goals are similar across all age groups.

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Willingness to Pay/Try Applications

47 25

15 27

65 23

16 32

54 30

16 34

66 24

18 32

65 25

19 39

59 24

19 39

67 20

20 29

56 20

22 33

0% 20% 40% 60% 80% 100%

Very likely

Somewhatlikely

Educating children

Bill payment

Preparing taxes

Shopping

Obtaining healthcare services

Buying a house

Personal entertainment

Banking services andmoney management

Pay

Try

Pay

Try

Pay

Try

Pay

Try

Pay

Try

Pay

Try

Pay

Try

Pay

Try

32 21

7 18

36 23

9 22

35 23

10 21

47 32

10 27

54 30

11 26

53 24

12 27

52 25

13 29

0% 20% 40% 60% 80% 100%

Very likely

Somewhatlikely

Studying

Job search

Socializing with friends

Renting a house

Commute

Household management

Meeting new people/dating

Pay

Try

Pay

Try

Pay

Try

Pay

Try

Pay

Try

Pay

Try

Pay

Try

18

Conclusions

• Current consumer expenditure patterns and CTM survey data support the view that for most end-users, physiological needs still remain key concerns in their everyday lives, absorbing most of their attention and focus.

• The survey results also suggest that the majority of end-users are in the basic-life category: ICT applications and services are predominantly used for communications and entertainment, only.

• ICT applications that address these physiological needs, specifically tele-health and to some degree tele-education, are more likely to be provide greater relative value and experience faster adoption.

fife@marshall.usc.edupereira@marshall.usc.edu

Institute for Communications Technology Management

Marshall School of BusinessUniversity of Southern California

www.marshall.usc.edu/ctm

Thank You