Brilliant Insights on Disruptive Innovation

Disruptive Innovations

Disruption starts with one small idea. It is a spark which turns into wildfire if fanned. Most of the inventions that we see today are the by-product of disruption. If disruption didn’t exist Thomas Edison or Nikola Tesla or Alexander Graham Bell would’ve simply been a part of the crowd. In fact, disruption and innovation have become synonymous for most innovators and entrepreneurs venturing into something new. This is what forms the crux of disruptive innovations.

Students pursuing marketing may have a tough time learning about the different aspects of disruptive innovation. Hence, we have attempted to decode these aspects and present a simplified understanding of this phenomenon.

Disruptive Innovation is a specific technology that considerably impacts the way an industry or market functions. A perfect specimen of a modern disruptive innovation happens to be the internet. It’s a well-known fact of how the internet completely transformed the way organizations conducted their business operations.

In fact, organizations that failed to comply with or were unwilling to embrace it perished in the process. This idea has been popularised by Clayton Christensen in his book named “The Innovator’s Dilemma.” Christensen opined there are primarily two kinds of technologies that businesses have to deal with.

Disruptive technologies and the way they are integrated, i.e. the disruptive innovations were less simple to plan for and possibly more damaging to organizations that didn’t pay adequate attention to them.

An Overview of The Disruptive Innovation Theory

According to the Harvard Business Review, disruptive innovation is a phenomenon that assists in creating a market and value network and gradually attempts to disrupt the existing market and value network. The phrase is utilized in business and technology literature to define innovations that enhance a product or service in ways that the market doesn’t anticipate.

The Innovator’s Dilemma by Clayton Christensen elaborated on three critical factors of disruption. Firstly, in every market, there is supposed to be a degree of improvement that consumers can absorb or utilize. For instance, the automobile companies keep providing the consumers with new and improved engines, but you can’t consider all the performance that they make available under the hood. Factors like speed limits, traffic, and safety concerns have an impact on how performance will be beneficial for you.

There are many tiers and categories in the market. Customers belonging to the most demanding or highest tiers may never be content with the best that’s available, and those in the least demanding or lowest tiers can be overwhelmed with very little.

Secondly, in every market, there tends to be a starkly different trajectory of enhancement that innovating organizations offer as they implement new and improved products. In this case, the speed of technological advancements always hinders the capacity of the consumers in any given tier of the market to utilize it.

Thus, the organization whose services are squarely placed on mainstream consumers’ prevailing needs will possibly overshoot what the consumers are able to utilize in the future. This occurs because organizations endeavor to make effective products that they can sell for higher profit margins to dissatisfied consumers.

The third critical aspect of the model is the difference between disruptive and sustaining innovation. A sustaining innovation focuses on demanding, high-end consumers with improved performance than what was available earlier. Some form of sustaining innovations involves gradual year-by-year improvements that all efficient businesses churn out.

On the contrary, disruptive innovation lets an entirely new population of customers at the bottom of the tier easy access to products or services. These products and services were ideally accessible to consumers with a lot of money or an abundance of skill.

Disruptive businesses come with a set of features. These features include smaller target markets, lower gross margins, and simpler products and services that may not come across as existing solutions when pitted against traditional performance metrics. Since these lower tiers of the market provide lower gross margins, they are less satisfying to other companies moving upward in the market. This creates a space at the bottom of the market for new disruptive competitors to flourish.

Influence of Disruptive Technologies on The Future of Jobs and Skills

In 2018, 10-15 disruptive technologies were responsible for ushering in "Industry 4.0" or the fourth industrial revolution. Disruptive technologies happen to be new and produce gradual improvements on existing technologies. 

Disruptive technologies force organizations to rethink how they do business so that they don’t turn obsolete.

These technologies have already garnered immense popularity, but there hasn’t been much emphasis on their implementation and implications. The challenge is in deciphering the changes and creating or evaluating the new relationships between society, business, humans, technology, and government.

For instance, the future is so bright for 3D printing that printers could make eyes, ears, organs, or bones. As a result, humans could live healthier, longer, and the connection between the consumer, retail, and producer may cut out most retail shops and transform what cities and towns look like now.

The agricultural industry has already encountered a sea change. There will be smart robots, autonomous tractors, and connected land and water surveillance that the farmers can utilize. They won’t need to pick vegetables and fruits, spray crops, or survey their fields.

Clearly, the world will be quite different. A substantial number of disruptive technologies will reshape life and economy. Jobs will be automated and witness a change in nature. New jobs (that don’t exist today) will be created.

Workers have to be flexible and be capable of digital navigation. They should also be able to handle the complexities and address a huge number of requests or demands for attention and response. They must filter or manage signals and noise, and align themselves with work through skills-centric instead of knowledge-centric economies. There’s not an iota of doubt that IT-related jobs will gain precedence. However, they're more likely to be in combination with other roles and industries.

How Disruptive Innovation is Transforming The World

Over the past few decades, several inventors have spearheaded disruptive innovation. Everything from the way we eat, sleep, travel, communicate and socialize has gone through a major shuffle. One interesting pattern to note here is that organizations and inventors from outside their industries disrupt the innovators. Sony’s popular Walkman is a classic example of disruption before it was replaced by Apple’s iPod. 

This era is witnessing a continuous shift of preferences and demands of the consumers. Therefore, organizations have to be prepared for continuous transformation to thrive in the market. Businesses have to do away with the archaic practice of investing in sustaining innovations and try to utilize the capital for disruptive innovations. This is when the organizational structures and policies will be put to the test.

Innovations will continue to flourish over time and will dominate the revenue generation process in a big way. With every new technology, businesses have two options to choose from. They can keep holding on to the existing market, or they can improvise the current practices or match up with new business models.

Examples of disruptive innovations

The pace of disruptive innovation is gaining momentum with new things being discovered every day. Here are some examples of the most disruptive innovations.

• Artificial Intelligence

AI is a widely acknowledged phenomenon that perceives the environment and takes the action required for the success of this phenomenon.

AI is known to replicate the cognitive functions of the human brain in learning and solving problems. As machines turn to be increasingly capable, other outdated features are discarded gradually.

• Space Colonisation

At present, only a handful of highly skilled astronauts can venture into space. According to several studies and research, the human population in space could shoot up very soon.

This human advancement is underway with projects like the International Space Station. NASA has also initiated several space colonization projects like the National Space Society, and International Space Development Conference where students can take part in contests.

Space colonization is a great example of disruptive technology where many macro disruptive technologies will be discovered.

• High-Speed Travel

High-speed travel technology has already turned into reality with the first test of Hyperloop, a prototype propulsion system.

Elon Musk, the founder of the Hyperloop, aims to make this a reality before 2020. When this emerging technology takes a proper shape and presented on a mass scale, it would solve many complex long-distance issues.

High-speed travel would also prevent over-population of cities by lowering carbon pollution and the need for urbanization.

• Blockchain Technology

This distributed ledger technology presents Bitcoin, Ethereum, and other possible cryptocurrencies. It also maintains a record of transactions and confirms who has what at any given moment.

The sophisticated cryptographic processes maintain its security. The immediate effect of blockchain technology may not be too evident for the general populace. However, it could enhance the existing systems within society. 

• Renewable Energy

The surge of energy from renewable sources like solar and wind is certainly disruptive, specifically when compared with traditional energy sources.

As per the experts, renewable energy could reduce climate change and pollution on a global scale.

Renewable energy consists of technological inventions like photovoltaic cells, wind turbines, concentrated solar power, and geothermal energy among others. Renewable energy is another pertinent example of disruptive technology that could help quicken the pace of sustainable development.

Radical Vs. Disruptive Innovations Organisation

Innovative businesses and entrepreneurs are always looking for newer ways to leverage the existing technology or create an entirely new service or product market. So, innovation and adaptability are the lifeblood of any successful company.

Radical Innovation

The idea of radical innovation is all about utilizing the core competencies for the future. It allows businesses to implement prevalent technology and decipher new applications that focus on long-term goals.

The Example of radical innovation is the iPhone, which was chiefly responsible for the introduction of the modern Smartphone market. Another befitting example would be the merging of farming equipment with sensor technology that offers farmers with the use of data that alters the farming industry.

Disruption Innovation

Disruption represents innovations that make services and products more affordable, accessible, and available to a larger population. Disruptive innovation has the scope to act as a positive force across every industry and areas of society. Some prominent examples of disruptive innovations are as follows.

• Personal computers,
• Refrigerators, stoves, and microwave ovens,
• Cloud technology
• Digital photography,
• iPods and downloadable digital music,
• Netflix and other streaming video services.

Importance of Disruptive Innovation on The Organizations

Speaking about the opportunities of the innovation technology, entrepreneur and philanthropist Elon Musk had iterated, “I think it’s important not so much to focus on just disruption for the sake of it, but rather where is an industry either stagnant or in decline, where the product or service has stayed pretty much the same or maybe even gotten worse over time? It’s worth looking at industries which a lot of people think are impossible or think you can’t succeed at — that’s usually where there’s the opportunity. If everyone thinks you can succeed in an industry, they’re probably diving in.”

For businesses looking forward to implementing innovation, they need to look at a challenge from the appropriate perspective. This is the reason that an organization's leadership must devise a clear strategy for creativity and innovation while still protecting their core businesses.

Risks of Disruptive Innovations and How to Eliminate It

Disruptive innovations like AI, machine learning, and the Internet of Things (IoT) comes with great promise. It’s no secret that implementing these technologies can digitally transform your business processes and your organization as a whole.

However, it is vital to remember that with every remarkable opportunity, organizations open themselves up to risk as well. So, let us shed some light on the biggest risks that we see businesses facing in the near future, and focus on the way organizations are eliminating them.

Risks of AI

1. Ethical and legal concerns
2. Reputational risk

Machine learning risks

1. Fairness and equity
2. User privacy

Risks of IoT

1. Public safety
2. Greater Complexity

Even though the challenges that are evident in disruptive innovations like machine learning and the IoT are prominent, there are ways to deal with them.

When it comes to alleviating bias in machine learning, the solution is to ensure that the input data you feed into your AI is devoid of prejudice and accurate. Although the solution seems easy, it can be tough to implement. The methodological issues that data collecting algorithms can be affected by are hard to spot. More data is always better when you are unsure, although you must ensure that the data was derived from a reliable source.

There are a few approaches to safeguarding users' personal information. Some tools let you build machine-learning models that offer differential privacy by incorporating random noise to the dataset. Researchers are still finding out whether machine learning can be impactful on data that are already encrypted.

Endnote,

Disruptive innovation is the main reason we have witnessed some of the greatest inventions of all time like Machine Learning and AI or high-speed travel. In fact, it shows no sign of stopping. As a student, you must stay updated on the trends of disruptive innovations to become a part of it in the future.

Myassignmenthelp.com For Your Disruptive Innovation Paper