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Disruptive innovation

In business theory, disruptive innovation is innovation that creates a new market and value network or enters at the bottom of an existing market and eventually displaces established market-leading firms, products, and alliances.[1] The term, "disruptive innovation" was popularized by the American academic Clayton Christensen and his collaborators beginning in 1995,[2] but the concept had been previously described in Richard N. Foster's book "Innovation: The Attacker's Advantage" and in the paper Strategic Responses to Technological Threats.[3]

Not all innovations are disruptive, even if they are revolutionary. For example, the first automobiles in the late 19th century were not a disruptive innovation, because early automobiles were expensive luxury items that did not disrupt the market for horse-drawn vehicles. The market for transportation essentially remained intact until the debut of the lower-priced Ford Model T in 1908.[4] The mass-produced automobile was a disruptive innovation, because it changed the transportation market, whereas the first thirty years of automobiles did not.


Disruptive innovations tend to be produced by outsiders and entrepreneurs in startups, rather than existing market-leading companies. The business environment of market leaders does not allow them to pursue disruptive innovations when they first arise, because they are not profitable enough at first and because their development can take scarce resources away from sustaining innovations (which are needed to compete against current competition).[5] Small teams are more likely to create disruptive innovations than large teams.[6] A disruptive process can take longer to develop than by the conventional approach and the risk associated to it is higher than the other more incremental, architectural or evolutionary forms of innovations, but once it is deployed in the market, it achieves a much faster penetration and higher degree of impact on the established markets.[7]


Beyond business and economics disruptive innovations can also be considered to disrupt complex systems, including economic and business-related aspects.[8] Through identifying and analyzing systems for possible points of intervention, one can then design changes focused on disruptive interventions.[9]

Disruption is a process, not a product or service, that occurs from the nascent to the mainstream

Originates in low-end (less demanding customers) or new market (where none existed) footholds

New firms don't catch on with mainstream customers until quality catches up with their standards

Success is not a requirement and some business can be disruptive but fail

New firm's business model differs significantly from incumbent

[17]

Proactive approach[edit]

A proactive approach to addressing the challenge posed by disruptive innovations has been debated by scholars.[43][44][45] Petzold criticized the lack of acknowledgment of underlying process of the change to study the disruptive innovation over time from a process view and complexify the concept to support the understanding of its unfolding and advance its manageability. Keeping in view the multidimensional nature of disruptive innovation a measurement framework has been developed by Guo to enable a systemic assessment of disruptive potential of innovations, providing insights for the decisions in product/service launch and resource allocation. Middle managers play an important role in long term sustainability of any firm and thus have been studied to have a proactive role in exploitation of the disruptive innovation process.[46][47]

Danneels, Erwin (2004). (PDF). Journal of Product Innovation Management. 21 (4): 246–258. doi:10.1111/j.0737-6782.2004.00076.x. Archived from the original (PDF) on January 12, 2006.

"Disruptive Technology Reconsidered: A Critique and Research Agenda"

Danneels, Erwin (2006). "From the Guest Editor: Dialogue on The Effects of Disruptive Technology on Firms and Industries". Journal of Product Innovation Management. 23 (1): 2–4. :10.1111/j.1540-5885.2005.00174.x. S2CID 26286417.

doi

Roy, Raja (2014). "Exploring the Boundary Conditions of Disruption: Large Firms and New Product Introduction With a Potentially Disruptive Technology in the Industrial Robotics Industry". IEEE Transactions on Engineering Management. 61 (1): 90–100. :10.1109/tem.2013.2259590. S2CID 22937655.

doi

Roy, Raja; Cohen, S.K. (2015). "Disruption in the US machine tool industry: The role of inhouse users and pre-disruption component experience in firm response". Research Policy. 44 (8): 1555–1565. :10.1016/j.respol.2015.01.004.

doi

Weeks, Michael (2015). "Is disruption theory wearing new clothes or just naked? Analyzing recent critiques of disruptive innovation theory" Innovation: Management, Policy & Practice 17:4, 417–428.

http://www.tandfonline.com/doi/pdf/10.1080/14479338.2015.1061896

Daub, Adrian. "WHAT TECH CALLS THINKING. An Inquiry Into the Intellectual Bedrock of Silicon Valley", 2020, also in: The Guardian,

The disruption con: why big tech's favourite buzzword is nonsense

Peer-reviewed with public commentaries by notable designers like Donald Norman

chapter on Disruptive Innovation by Clayton Christensen

Archived May 1, 2009, at the Wayback Machine. Note that Dvorák's definition of disruptive technology describes the low cost disruption model, above. He reveals the overuse of the term and shows how many disruptive technologies are not truly disruptive.

The Myth of Disruptive Technologies

by Roger Smith in Research Technology Management (September/October 2006)

"The Disruptive Potential of Game Technologies: Lessons Learned from its Impact on the Military Simulation Industry"

by Francisco Rodrigues Gomes, Academia.edu share research

Diffusion of Innovations, Strategy and Innovations The D.S.I Framework

CREATING THE FUTURE: Building Tomorrow’s World

Lecture (video), VoIP as an example of disruptive technology