In this paper a network approach is presented with which adoption of technological innovation in SME's is researched. In the first part of the paper the origin of the empirical problems is presented. This is followed by a conceptual model of the adoption process in a network, based on the innovation adoption model of Rogers (1983). In the second part of the paper two mechanisms of contagion in networks are presented. In addition to the classical cohesion mechanism, a relatively new mechanism is presented. This second mechanism is based on the structural equivalence of positions of actors.