Skip to content

Disruptive Innovation: The Theory Behind How It Works and Its Impact on Society

Disruptive innovation has the potential to change our world for the better, but it can also have negative consequences for certain individuals and industries who cannot adapt to the changes. In order to leverage how disruptive innovation work, we must first understand what it is and how it works. Wh

Phil McKinney
Phil McKinney
7 min read
A picture of birds to convey Disruptive Innovation
disruptive innovation is key to progress.

Disruptive innovation has the potential to change our world for the better, but it can also have negative consequences for certain individuals and industries who cannot adapt to the changes.

In order to leverage how disruptive innovation work, we must first understand what it is and how it works. What is the theory behind disruptive innovation and its impact on society — what are the positive and negative effects? Are there disruptive innovations that you should monitor and be ready to respond to? What about disruptive innovation for social change?

Disruptive Innovation Theory

New products and services are disruptive when they offer lower prices and better quality than the products in the existing market. Business models are disruptive when they provide different ways of making money from customers, such as using advertising to make money instead of charging for their product (Google). Obsolescence of old products and services also qualifies as disruptive because it takes away the demand for what used to be in high demand (paper maps).

Disruptive innovation is a process or event that changes an industry or market by introducing a new product, service, or business model that differs significantly from and is often superior to the existing one.

It can be a positive force for change in society, ushering in additional levels of efficiency, productivity, and convenience. However, it can also have negative consequences for certain individuals and industries who cannot adapt to the changes.

Three Types of Disruptions

The impact of disruption varies depending on the type of disruptive innovation. There are three types of disruptions:

  1. The first type of disruption is the introduction of a new product or service that differs significantly from and is often superior to the existing one. This can be a game-changer for the industry and can cause incumbents to lose market share or even go out of business.
  2. The second type of disruption is when a new business model is introduced that differs significantly from and is often superior to the existing one. This can also be a game-changer for the industry and can cause incumbents to lose market share or even go out of business.
  3. The third type of disruption is when technology advancements make older products, services, or business models obsolete. This can cause incumbents to lose market share or even go out of business.

Understanding The Disruptive Potential

The disruptive potential is the likelihood that a new product or service will create a new market and eventually disrupt an existing market. It is a measure of how disruptive a product or service is likely to be.

There are three key factors that contribute to the disruptive potential of an innovation:

  1. The degree of simplicity: simplicity of innovation is a key factor in its disruptive potential. The simpler the innovation, the easier it is to learn and use, and the more likely it is to be adopted by consumers. Simple innovations are also more likely to disrupt existing markets, as they are often cheaper and/or more effective than existing products or services.
  2. The degree of compatibility: The degree of compatibility of an innovation is also a key factor in its disruptive potential. The more compatible the innovation is with the existing system, the less disruptive it is likely to be. In order to be disruptive, an innovation must be incompatible with the status quo, and therefore must offer a better solution to a problem that the status quo cannot solve.
  3. The degree of affordability: Affordability is a key factor in disruptive potential, as it is often the reason why an innovation is adopted by consumers. An affordable innovation is more likely to be adopted than an expensive one, as people are more likely to switch to a product or service that is cheaper than the one they are currently using. An affordable innovation is more likely to disrupt an existing market, as it is often cheaper and/or more effective than existing products or services.

How can incumbents protect themselves from disruptive threats?

There are a few ways that incumbents can protect themselves from disruptive threats. One is to predict disruptive innovations and develop similar products or services. Another is to invest in disruptive companies, hoping they will not become disruptive threats. Incumbents can also try to differentiate themselves from disruptive companies by emphasizing the quality of their products or services. Finally, incumbents can try to create a culture of innovation within their company.

Predicting Disruptive Innovations

There are a few ways to predict disruptive innovations. One is to watch for changes in customer needs or preferences. Another is to look for new technologies or business model innovation that could disrupt your industry. You can also track the activities of disruptive companies and see what products or services they might be developing. Finally, you can talk to disruptive companies and find out what their plans are.

Invest in Disruptive Companies

There are a few reasons you should invest in disruptive companies. First, disruptive companies have the potential to be very successful. They often have a lot of momentum and disrupt the status quo. Second, disruptive companies are often very innovative and can come up with new products or services that can change your industry. Finally, disruptive companies are usually cheaper to invest in than non-disruptive companies.

Create a Culture of Innovation

Creating a culture of innovation is important because it allows companies to be more responsive to disruptive threats. A culture of innovation encourages employees to come up with new ideas, and it allows them to experiment and take risks. This makes it easier for companies to adapt to disruptive innovations, and it allows them to stay competitive in the marketplace.

Society and Disruptive Innovations

The role of society with disruptive innovations is to accept and embrace the change. Society must try the new product or service and switch from the old product, service, or business model. It is often difficult for society to accept change, but disruptive innovations offer a better solution to a problem that the status quo cannot solve.

How can disruptions improve society?

Disruptive innovation can improve society by bringing about new levels of efficiency, productivity, and convenience. For example, the personal computer and the internet have made it possible for people to access information and communicate with each other faster and more easily than ever before. This has led to increased efficiency and productivity in both the workplace and in our personal lives.

How can disruptions harm society?

Disruptions can have negative consequences for certain individuals and industries who cannot adapt to the changes. For example, digital photography has led to the decline of the traditional photography industry. This has resulted in layoffs and the closure of photo labs across the country.

Disruptive technologies provide a superior solution to problems that the status quo could not solve. They have the potential to revolutionize society by generating higher degrees of efficiency, productivity, and convenience. However, they may also have detrimental effects on certain individuals and businesses who cannot succumb to them.

How could governments (society) encourage disruptive technology development?

Governments and society could encourage disruptive technology development by creating an environment that is conducive to it. This could include providing incentives for businesses to adopt disruptive technologies and investing in research and development to promote innovation. Governments could also help to create a market for disruptive technologies by supporting their adoption of them by consumers and businesses.

For example, the government could provide financial help to help businesses adopt disruptive technologies or create tax breaks for consumers who purchase disruptive products.

Disruptive Innovation Examples

An example of an innovation that disrupted established companies was the introduction of the iPhone by Apple. The iPhone was a disruptive innovation because it was a new product that was significantly different from and superior to the existing ones on the market. It caused incumbents like Nokia and BlackBerry to lose market share, or sometimes to go out of business, because they failed to respond to the changing business model.

Another example is the introduction of online banking, which was a disruptive innovation because it was a new business model that differed significantly from, and was superior to, the existing ones. It caused incumbents like brick-and-mortar banks to lose market share or to be gained by more nimble competitors.

Finally, an example of market disruption is the introduction of digital photography, which caused incumbents like Kodak to lose market share until they embraced the new business model.

What Disruptive Technology Should You Track?

How do disruptive technologies affect a business? There are many disruptive technologies that businesses should track, but here are five of the most important:

1. Artificial intelligence and machine learning

Artificial intelligence and machine learning are disruptive technologies because they have the potential to change the way we live and work. They can make our lives easier by automating tasks that are currently done by human beings. For example, they can diagnose diseases and predict weather patterns and stock market trends. They can also create new products and services that are more efficient and user-friendly than those currently available.

2. Augmented and virtual reality

Augmented and virtual reality provides a new way to experience life by adding things that weren't originally there in our world. This could be something as simple as seeing information overlaid onto objects in the real world, or it could be a full virtual reality experience in which you completely immerse yourself in an alternate world.

It is disruptive because they have the potential to change how we interact with the world.

3. Blockchain technology

Blockchain technology is a distributed database that allows for secure, transparent, and tamper-proof transactions. It is underpinned by cryptography and can track the ownership of digital assets or record data.

Blockchain technology has the potential to disrupt several industries, including banking, finance, insurance, healthcare, and logistics. It could also create tamper-proof records of events and transactions.

4. 5G wireless technology

5G wireless technology is an excellent example of disruptive innovation. It is simpler and cheaper than 4G technology, and it offers greater bandwidth and faster speeds. This makes it ideal for streaming video and other data-intensive activities. 5G wireless technology is also more responsive, which makes it better for applications such as self-driving cars.

5. Edge Computing

Edge computing is a newer term — sometimes called edge networks. It is a distributed computing architecture where data processing and content delivery are pushed to the edge of the network, closer to the user or device. Edge networks are those that handle large volumes of data and traffic near the edge of the network, often in proximity to users and devices.

Edge computing will disrupt how we process and store data. By moving data processing closer to the edge of the network, we can improve response times and reduce bandwidth requirements. This will be a disruptive change for businesses and consumers alike.

Conclusion

Are you looking for disruptive innovation?

Disruptive innovations are those that change the way we live and work for the better. They are disruptive because they offer a new and better way of doing things that are often superior to the status quo.

It doesn't matter what industry they are a part of, businesses should track disruptive technologies so that they can stay ahead of the curve and take advantage of these innovations. They have the potential to change entire industries and make our lives easier.

So don't be afraid to be disruptive. Embrace it! Innovation drives progress, and disruptive innovation is the best kind there is.

Need help? Check out the aids/help over at innovation.tools.

Disruptive innovation is the key to progress – embrace it!
BlogCultureChange Caused By Innovationdisruptivedisruptive innovationsocietytrends

Phil McKinney Twitter

Phil McKinney is an innovator, podcaster, author, and speaker. He is the retired CTO of HP. Phil's book, Beyond The Obvious, shares his expertise and lessons learned on innovation and creativity.

Comments


Related Posts

Members Public

The Silent Epidemic: The Growing Problem of Digital Addiction

Despite its many conveniences, the digital world contributes to an alarming new epidemic - digital addiction. Studies reveal that an average American checks their phone almost 96 times daily, fueling concerns about our dependence on technology.

A group of teenagers all focused on the screens in their hands - digital addiction
Members Public

Are You Future-Proof? Preparing for Technological Disruptions

Preparing for technological disruptions is essential for businesses to remain competitive and successful long term. With the proper preparation, companies can take advantage of new trends and technologies to create innovative solutions that meet customer needs and give them a competitive edge.

Are You Future-Proof? Preparing for Technological Disruptions
Members Public

The Punctuality Paradox: The Ethics of Time

Time is our most valuable resource, yet it is finite and fleeting. It cannot be saved, paused, or rewound. It is constantly moving forward, regardless of how we use it. Therefore, we must use our time wisely and purposefully to make the most of every moment.

An image of clock and child presenting to idea of time and how to use it.