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Disruptive Technology

Disruptive technology automates jobs, but it also creates the opportunity for new markets to emerge.

Disruptive technology creates the opportunity for new markets to emerge.

Disruptive technology is defined in this video, but if you prefer to read the definition read below the video.

What is disruptive innovation?

In a research paper titled, Disruptive Technologies: Catching the Wave, Harvard Professor of Business Administration Clayton M. Christensen, talks about technology that is either disruptive or sustaining:

  1. disruptive innovation – addresses a market that previously couldn’t be served. Incumbent companies often ignore new technologies because the new product’s features at the outset, are not valued by the customers. As customer’s increasingly require improvements in the incumbent’s product it eventually gets taken over by the new technology. Unfortunately for the established suppliers, by then it is often too late: the pioneers of the new technology dominate the market.
  2. sustaining innovation – does not serve new or emerging markets, rather, it happens when you improve existing offerings for the same markets you have always served.

Let’s think about email for a moment. At the time email was first released there were only a few users. The early users of new technology innovations are known as “early adopters”. As a potential customer, it is difficult to see value in new technology during the early stages of disruption. The new technology may be unreliable in the early stages. We had a way of doing things and it did not require a computer or an internet connection.

The incumbent in this example is the post office. Our lives required the post office in order to pay bills, communicate written letters over long distances, and send important documents around the world. USPS could have jumped on the email bandwagon much earlier and tried to innovate a way to integrate email into their business model. However, they ignored it. If USPS were the creators of email, we might be paying them to email one another. This is an example of how disruptive innovation creeps up on existing incumbents, and eventually takes over the market.

Disruptive technology automates Jobs

Disruptive technology also has a variety of other impacts such as the automation of jobs.

As we learn how to use technology for a greater purpose, it empowers us to build new products to serve the needs of currently unserved customers.

In the long-term vision of humanity, technology is a necessary component to continue our evolution. In the short-term view, technology can seem like a “bad thing”.

Think about what Henry Ford did for middle class Americans who could not afford to buy a car.

  • In the long-term view, Henry Ford’s disruptive innovation was a crucial component in human evolution. Could we have survived without it? Sure.
  • In the short-term view, cars may have been viewed as a “bad thing” because they made the horse-and-buggy unnecessary. If you owned a horse-and-buggy, or if you drove one as your job you may have been unhappy when the majority of your city owned cars. This led to unemployment. However, because of the nature of disruptive innovation this also created new opportunities for new employees to be hired in the factory producing the cars.

Today, we experience a similar impact from disruptive innovations in technology. Unemployment and underemployment are one of the top global risks of 2015 as stated by the World Economic Forum.

World Economic Forum Global Risks Landscape 2015

Think about the effect of email on the post office.

  • Long-term: email has become a staple in our communication. It streamlines outdated processes, and creates more time for us to do leisure activities we enjoy. If used properly, email has the potential to increase our quality of life. The last time there was a communication technology innovation of this magnitude was the advent of the printing press. The printing press allowed the communication of ideas to spread throughout the planet at a faster pace than ever before. This period of time is known as the Renaissance.
  • Short-term: If you were the postal worker who lost her job because of the impact email has on the post office then you may think of the disruptive innovation of email as a bad thing.

In 2012, the United States Postal Service lost $15.9 billion, continues to lose an additional $5 billion per year, and they have eliminated over 28,000 jobs and counting.

The mass produced car and email are both disruptive innovations in technology. Examples such as this could be why many people dislike change. Clearly, it threatens our immediate livelihood.

It is my contention that we can mitigate this risk, and potentially prevent it from happening.

How do we encourage the development of disruptive innovations, but also be better prepared for the negative short-term impacts of disruption?

In the following paragraphs I will attempt to answer the above question, but first I would like to define disruptive innovation.

Technology innovations disrupting universities

Universities are here to stay. Let’s discuss how we might improve upon the existing model.

Academia seems to ignore some disruptive innovations in technology. Rather than investing in new startups such as Facebook and Y-Combinator, universities and education startups often try to play “catch-up”. They build their own proprietary versions of existing technology as an attempt to keep up with the new technology platforms all the students are using outside of the classroom.

The university’s hesitation to integrate Facebook, Twitter, Pinterest or SnapChat in the classroom is understandable. However, it may be a potential factor in retention rates, graduation rates, post-grad unemployment, post-grad underemployment and inability to repay student loan debt. If I ran a university I would want to know what I needed to do to give my institution a competitive edge. It is possible that if we look to existing social networks it could be precisely that.

Christensen points out in his research paper that if existing institutions choose to ignore disruptive technology it can lead to self-destruction for the existing company. In this example, the existing company is the university.

Incumbent companies often ignore new technologies because the new product’s features at the outset, are not valued by the customers.

Christensen may be referring to university admins and professors who ignore the integration of new media into their curriculum. However, I disagree with Christensen and his reasoning behind why a company ignores the new technology. It has been my personal experience that many professors are interested in exploring methods for new media integration. Since 2009, I have worked with professors of political science, english, environmental science, immigration and democracy, social work, history, nonprofit management as well as deans and administrators of world class universities and honors programs. I was hired by each professor because they knew their students needed a blended learning experience. The curriculum is the core. The innovative technology to utilize such curriculum is the bridge between generations. The linchpin.

As an educator, my goal is to create an organic environment for students to learn how to learn. They must become the ambassador of their own knowledge. The archive is now infinite and exists everywhere. Compare this to the one teacher who would stand in front of a classroom and tell a roomful of students what they should memorize. The next generation of youth must learn how to navigate the information fields, satisfy their knowledge cravings, and become the indispensable linchpin between the old economy and the new economy.

Seems as though it is a constant race. Perhaps that is because innovation is now a constant. This creates opportunities for youth from all different backgrounds and passions to become disruptive innovators – linchpins.

Customers increasingly require improvements in incumbent’s products. The longer the post office decided to ignore email meant the harder it would be for the post office to earn back any lost market share, or even become a player in the technology. Antiquated products and services eventually get taken over by the new technology. Unfortunately for the established suppliers, by then it is often too late: the pioneers of the new technology dominate the market.

Are you educating those around you to become pioneers?

Humanity is faced with social problems which have gone unsolved for decades. In some cases centuries.

Why are we not able to solve such problems?

Why do the World Economic Forum’s top 5 global risks include food and water crisis, inability to change our behavior which is causing global climate change, and unemployment? Are we educating our youth to solve such problems?

We seem to have startups building widgets and gadgets to solve all types of “problems”. Productivity. Communication. Finance. However, it is the job of the university to position itself as the linchpin between old and new generations. Sociology students, poli-sci, psychology, philosophy, anthropology are all examples of untapped opportunities. These students are the linchpins between innovative technology and the solutions humanity is waiting for.

Are you educating students to solve big problems?

Terminology

  • Technology – engineering, manufacturing, marketing, investment processes, managerial processes, labour, products, services, and anything that transforms the inputs of production.
  • Disruptive innovation – disruptive innovation is a key concept coined by Clayton Christensen, describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.
  • The old economy – The old economy consists of the way things were Pre-Google (P.G.).

Additional Reading

More information about disruptive technology:

More information about Linchpin by Seth Godin:

Research Reports

[aesop_document type=”pdf” src=”http://danieldalonzo.com/wp-content/uploads/2015/05/disruptive-technologies-catching-the-wave-christensen.pdf” caption=”I found an early edition copy of this research report on http://www.immagic.com”]

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