Posted by: kenwbudd | December 12, 2009

Does Disruptive technology always lead to Disruptive Innovation?

Disruptive technology and disruptive innovation are terms used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect, e.g. lower priced, designed for a different set of consumers, new materials or technologies.

Disruptive Innovation
Disruptive innovations can be broadly classified into low-end and new-market disruptive innovations. A new-market disruptive innovation is often aimed at non-consumption (i.e., consumers who would not have used the products already on the market), whereas a lower-end disruptive innovation is aimed at mainstream customers for whom price is more important than quality.

Dusruptive Technology
Disruptive technologies are particularly threatening to the leaders of an existing market, because they are competition coming from an unexpected direction.

A disruptive technology can come to dominate an existing market by either filling a role in a new market that the older technology could not fill (as cheaper, lower capacity but smaller-sized flash memory is doing for personal data storage in the 2000s) or by successively moving up-market through performance improvements until finally displacing the market incumbents (as digital photography has largely replaced film photography).

Sustaining Innovation
In contrast to “disruptive innovation”, a “sustaining” innovation does not have a changing or disruptive effect on existing markets but instead it has a developmental, supportive and/or complimentary effect.

Sustaining innovations may be either “discontinuous” (revolutionary) or continuous”
(evolutionary) but in both cases they are based on the original mindset, framework or concept.

Revolutionary Innovation
Revolutionary innovations are not always disruptive or certainly not immediate in their disruptive effect i.e. they have a long term effect not a short term one.

Although the automobile was a revolutionary innovation, it was not a disruptive innovation, because early automobiles were expensive luxury items that did not disrupt the market for horse-drawn vehicles. The market remained intact until the debut of the lower priced Ford Model T in 1908. A similar example would be the rise in technological investment into space tourism.

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