What is disruptive innovation?


What is disruptive innovation?

Disruptive innovation is an idea that goes against the norms, significantly changing the status quo of regular business growth and developing what is known as a new market that accelerates beyond the scope of existing markets.

At the beginning, it may not be as good as the technology it’s replacing, but it’s usually cheaper, meaning more people can snap it up and it can become a commodity fast.

The key differentiator between disruptive innovation and standard innovation is that what is considered to be a revolutionary innovation doesn’t shift the entire market. It may make a difference to some people, but if it’s not accessible to all or doesn’t have an effect on the entire market, it’s not considered disruptive.

Although the introduction of cars in the 19th century was a revolutionary innovation, not everyone was able to afford them and so they didn’t become a commodity until much later.

Horse-drawn carriages remained as the primary mode of transport for a long time after the introduction of motorised vehicles – in fact until the Ford Model T was launched. It was a mass-produced car that made vehicles more affordable for everyone and is therefore considered a disruptive innovation.

The history of disruptive innovation

The idea of a disruptive innovation was first introduced by Harvard Business School scholar Clayton M. Christensen in 1995. He wrote a paper called Disruptive Technologies: Catching the Wave and then discussed the theory further in his book The Innovator’s Dilemma.

This latter book examined the evolution of disk drives but formed the argument that its the business model that allows for a product to become a disruptive innovation rather than the technology itself.

The term is now considered ‘modern jargon’ by some thinkers and publications, although it’s still widely used.

Examples of disruptive innovation in technology

The iPhone Although products aren’t necessarily always the definition of disruptive innovation, the iPhone is one that had a huge impact on the industry. It redefined communication and although at launch had a pretty narrow focus, quickly became mainstream, mobilising the laptop and developing a new business model in the process – one that relied upon app developers (a new, revolutionary concept in itself) to make it a success.

The iPhone completely disrupted the technological status quo – as smartphones because a way to replace laptops and evolved into the iPad – even further eradicating the need for a laptop.

Video on demand The concept of streaming TV programmes at any time to your TV would have been completely insane probably a decade ago.

The ability to stream content using the internet direct to the TV has completely disrupted the market. According to a recent report by the Office of National Statistics, half of adults now consume content using streaming services.

But it’s also disrupted the advertising market, with an entirely new revenue stream for sponsors and advertisers, shifted the balance in rights and caused startups to overtake traditional TV networks in popularity and income.

Digital photography Digital photography is a solid example of disruptive innovation, because not only did it introduce a technology – and whole ecosystem of accessories that grew in popularity because of it (such as memory cards, photo printers etc.), but it also completely shifted the manufacturer market, knocking Kodak, one of the previous market leaders, into oblivion.

The concept of digital photography was actually developed by Kodak engineer Steve Sasson, but it wasn’t popularised by the firm because Kodak wanted to concentrate on film – its bread and butter. Unfortunately, other firms jumped onto the idea and it completely revolutionised photography, leaving film a hobbyist technology in many cases, rather than a commercial opportunity.

Source: ITPRO