#776 2017 · Soccer-ball manufacturers, Sialkot, Pakistan (Atkin, Chaudhry, Chaudry, Khandelwal & Verhoogen field experiment) · Manufacturing / textiles
A better cutting die sat unused in dozens of factories for 15 months — because the only person who knew it worked had a reason to say it didn't
the problem
A new cutting technology cut material waste and had clear net benefits for nearly all soccer-ball producers who received it for free, yet adoption remained puzzlingly low 15 months later
background
Researchers introduced a new fabric-cutting die to a randomly selected group of soccer-ball manufacturers in Sialkot, Pakistan — a cluster producing 30 million hand-stitched soccer balls a year for major global brands. The new die let more balls be cut from the same sheet of raw material, cutting total costs by roughly 1%, a modest but meaningful saving given the firms' average 8% profit margin. Firms received the technology free, along with a blueprint and demonstration. After 15 months, only a handful of firms had actually adopted it, despite the clear net benefit to nearly every firm that received it.
The standard explanations for slow technology adoption — the technology doesn't actually work as promised, owners lack the capital to switch over, workers lack the training to use it — all turned out not to fit. The cutters, the workers who actually operated the cutting die, were paid piece rates for the pieces they produced, and the new pattern was harder and slower to learn, meaning switching would temporarily cut a cutter's own take-home pay. Owners, who had far less hands-on expertise in cutting than their own employees, had no independent way to verify whether the new die actually worked as well as claimed — leaving them dependent on exactly the employees whose pay it threatened for an honest assessment.
what everyone would do
The standard response to low adoption of a genuinely beneficial technology is to look for a barrier on the decision-maker's side — assume the owner lacks capital, the technology has hidden flaws not yet identified, or the workforce needs more training before the tool can be used effectively. Each of these diagnoses points to a different, often expensive fix (more subsidy, more R&D, more training programs), and none of them looks at whether the information reaching the decision-maker was accurate in the first place.
what they saw
The researchers saw that the real barrier wasn't anything about the technology, cost, or training at all — it was that the owner, who had to decide whether to adopt, had no independent way to verify the new die's actual performance and was entirely dependent on the cutters, the only people with genuine hands-on knowledge, for that assessment. Because the cutters were paid piece rates and the new die temporarily slowed them down while they learned it, those same cutters had a direct financial reason to tell the owner the technology didn't work — not because it didn't, but because admitting it did meant accepting a period of lower personal pay. The barrier to adoption was a misalignment between who held the accurate information and who was financially motivated to distort it.
the move
Rather than assume the barrier was the technology's real-world performance, capital cost, or worker training, the researchers tested a different hypothesis directly: that the cutters, the only people with accurate first-hand knowledge of the new die's performance, had a private financial incentive to misinform the owner about its value, since a temporary drop in their own piece-rate output during the learning period meant lower pay for them personally.
why it works
By paying cutters directly for demonstrating the new die's real competence in front of the owner, the intervention didn't try to fix the technology, subsidize the owner, or run more training sessions — it removed the cutter's specific financial reason to misreport, aligning what the cutter was paid to demonstrate with what was actually true. Because the payment was conditional on demonstrated competence rather than a flat bonus, it specifically compensated cutters for the real cost they'd bear (temporarily lower piece-rate output while learning the new pattern), addressing the actual mechanism suppressing honest reporting rather than a generic goodwill gesture that might not have touched the underlying incentive at all. The fact that a single, relatively small, one-time payment (about a month's salary) produced a significant jump in adoption is itself powerful evidence that the diagnosis was correct — if the real barrier had been the technology's performance, capital cost, or training difficulty, a payment to a single worker for demonstrating competence would have done nothing to change any of those underlying facts.
the payoff
In a second experiment, the researchers offered a one-time lump-sum payment — roughly a month's earnings — to one cutter per firm, conditional on demonstrating competence with the new technology in front of the owner. This incentive payment, small relative to the firm's overall costs, produced a significant increase in adoption compared with firms where cutters received no such payment, confirming that the barrier had been the misalignment between what cutters knew and what cutters were financially motivated to tell their employer, not the technology, the cost, or the training itself.
where it breaks
This mechanism depends on genuinely identifying who holds accurate private information the decision-maker actually relies on and lacks any independent way to verify — a decision-maker with real expertise of their own, or an accessible independent way to test the technology, wouldn't be as dependent on a single potentially-motivated informant, and the misinformation channel this fix addresses wouldn't be the binding constraint. It also depends on the misaligned party's resistance genuinely being economically rational rather than something else (skill gaps, genuine skepticism, cultural resistance to change) — a payment that removes a financial disincentive to honest reporting does nothing for resistance rooted in an employee's actual inability to use the new tool competently, or in incentives beyond the specific piece-rate pay structure this study identified. And the fix's low cost here depended on the misalignment being resolvable with a single, modest, one-time payment — a more deeply entrenched conflict of interest, involving larger sums or an employee relationship not easily corrected with one payment, might require a more durable restructuring of incentives (a permanent change to how cutters are compensated) rather than a one-off demonstration bonus.
what came after
Published as Atkin, Chaudhry, Chaudry, Khandelwal & Verhoogen, 'Organizational Barriers to Technology Adoption: Evidence from Soccer-Ball Producers in Pakistan' (Quarterly Journal of Economics 132(3), 2017), the study is widely cited in development and organizational economics as direct evidence that a firm's technology-adoption failures can stem from internal information asymmetry and misaligned incentives between owners and employees, rather than from the technology, capital, or training explanations managers typically reach for first.
references
- [1]Organizational Barriers to Technology Adoption: Evidence from Soccer-Ball Producers in PakistanNational Bureau of Economic Research (Working Paper 21417; published in Quarterly Journal of Economics 132(3), 2017), 2015nber.org
- [2]Organizational Barriers to Technology Adoption: Evidence from Soccer-Ball Producers in PakistanAbdul Latif Jameel Poverty Action Lab (J-PAL), 2017povertyactionlab.org