And of all trends, perhaps disruptive technologies are the defining path of industrial implications, a linear passage that technological progress almost invariably follows. Though the concept of “disruptive technologies” is only popularized in 1997 by Harvard Business School Professor Clayton Christensen in his best-seller “The Innovator’s Dilemma”, the phenomenon was already evidenced back in 1663, when Edward Somerset published designs for, and might have installed, a steam engine.
As put forth by Clayton Christensen, disruptive technologies are initially low performers of poor profit margins, targeting only a minute sector of the market. However, they often develop faster than industry incumbents and eventually outpace the giants to capture significant market shares as their technologies, cheaper and more efficient, could better meet prevailing consumers’ demands.
In this case, the steam engines effectively displaced horse power. The demand for steam engines was not initially high, due to the then unfamiliarity to the invention, and the ease of usage and availability of horses. However, as soon as economic activities intensified, and societies prospered, a niche market for steam engines quickly developed as people wanted modernity and faster transportation.
One epitome of modern disruptive technologies is Napster, a free and easy music sharing program that allows users to distribute any piece of recording online. The disruptee here is conventional music producers. Napster relevantly identified the “non-market”, the few who wanted to share their own music recordings for little commercial purpose, and thus provided them with what they most wanted. Napster soon blossomed and even transformed the way the internet was utilized.
Nevertheless, there are more concerns in the attempt to define disruptive technologies than simply the definition itself.
One most commonly mistaken feature for disruptive technologies is sustaining technologies. While the former brings new technological innovation, the latter refers to “successive incremental improvements to performance” incorporated into existing products of market incumbents. Sustaining technologies could be radical, too; the new improvements could herald the demise of current states of production, like how music editor softwares convenience Napster users in music customization and sharing, thereby trumping over traditional whole-file transfers. The music editors are part of a sustaining technological to Napster, not a new disruptor. Thus, disruptive and sustaining technologies could thrive together, until the next wave of disruption comes.
See how music editors are linked to steam engines? Not too close, but each represents one aspect of the twin engines that drive progressive technologies; disruptors breed sustainers, and sustainers feed disruptors.
This character of sustaining technologies brings us to another perspective of disruptive technologies: they not only change the way people do business, but also initiate a fresh wave of follow-up technologies that propel the disruptive technology to success. Sometimes, sustaining technologies manage to carve out a niche market for its own even when the disruptive initiator has already shut down. Music editor and maker softwares continue to healthily thrive, despite Napster’s breakdown (though many other file sharing services are functioning by that time), with products like the AV Music Morpher Gold and Sound Forge 8.
A disruptive technology is also different from a paradigm shift, which Thomas Kuhn used to describe “the process and result of a change in basic assumptions within the ruling theory of science”. In disruptive technologies, there are no assumptions, but only the rules of game of which the change is brought about by the behaviors of market incumbents and new entrants. They augment different markets that eventually merge. In Clayton Christensen’s words, newcomers to the industry almost invariably “crush the incumbents”.
While researching on disruptive technologies, I came across this one simple line that could adequately capture what these technologies are about, “A technology that no one in business wants but that goes on to be a trillion-dollar industry.” Interesting how a brand new technology that seemingly bears little value could shake up an entire industry, isn’t it?
You are probably asking, why then that no one wants it? Or how true is the money claim to these disruptive technologies? And if it is true, what are the implications to the business practice? How do market incumbents and new entrants behave?
The scope of this article could only let me take the first question. Well, it is not that dominating companies are not visionary to see a disruption is coming. They can’t. A disruptive technology is inherently not attractive initially; no one could see how Napster could boom and lead to the thriving market of audio softwares like the music editors and mixers, except the disruptors themselves. Even if one manages to foresee it, the “Innovator’s Dilemma” is there to keep them from acting.
And as the books show, technology has always evolved in waves of disruption.
