What is disruptive innovation?

We explain what disruptive innovation is and some of the examples that have changed our lives

You can think of disruptive innovation as something that redefines a field and shifts it on its head. It differs from disruptive technology, such as blockchain, as the field already exists but becomes something entirely new thanks to an impressive feat of innovation or engineering.

Blockchain has the potential to disrupt the way banking is done today and is already being adopted in baby steps, but blockchain is a new technology taking on an industry. Disruptive innovation isn't new, it's just making what's already there better.

To be disruptive, it must shake the industry to its core. Standard innovation may just make something better for some people involved in that particular market, but if it doesn't impact everyone, it isn't disruptive.

A disruptive innovation may not be a trailblazer from the get-go. Often it's not even better than the technology it's trying to replace. Its advantage is in its price - it's usually cheaper than the 'big thing' in the field which means it becomes more accessible for people to give it a try, increasing the product's adoption once the hype is realised.

The history of disruptive innovation

The idea of 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.

Ride-sharing services completely changed the way people navigate a city. Whether you agree with the way companies like Uber are run, it's impossible to dispute the disruption they've had on the travel sector.

One of the main difficulties of hailing a taxi, especially on unfamiliar ground, was simply knowing the right phone number to call and getting a good price. Uber solved all of this with its ubiquitous, map-driven app that gives travellers everything could ever want. It may not have been popular at first, getting drivers to sign up would have been tricky, but it's showing no signs of falling now it's taken off.

Communication platforms: Where emails and face to face conversations used to be the norm, services like Slack and Microsoft Teams have transformed the way offices work. 

These are cloud-based services that incorporate instant messaging, file sharing and even video conferencing software that helps productivity. The rise of Slack in the workplace has even brought up concerns about an "always-on" culture within startups, where users continue to check messages out of work hours. 

Slack has often been seen as the company to end emails, which hasn't really happened, but its introduction, along with a number of other services has changed the way we work and helped with things like remote working. 

Cryptocurrencies: Rather than cold hard cash or even digital payments, cryptocurrencies are, as the name suggests, currencies in the own right. While they are yet to truly transform finance a number have gained notoriety, such as Bitcoin, Ethereym and BitGold. The underlying technology for cryptocurrencies is part of the makeup of blockchain technology.

Cryptocurrencies are quite volatile, with most fluctuating dramatically in value, but it is seen as a big part of the future. Facebook cause a lot of concern for regulators when it announced it's own Libra cryptocurrency in 2019. 

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