Definition of Disruptive Technology

Definition Last Updated 08-Feb-2016 11:04

A disruptive technology is a novel capability1Originally described as a novel package in Disruptive Technologies – Catching the Wave (paywall) by Joseph Bower and Clayton Christensen in the Harvard Business Review. Note that a novel package does not necessarily imply fundamental technological novelty such as the use of graphen instead of silicon for transistors., offered by a business which does not – at the time of initial offering – compete directly in already well-defined business sectors or against specific established businesses, that is recognised2Typically through comparative assessment of performance trajectories as having the potential to achieve (or having already achieved), through subsequent sustaining innovation and general business activity3Sales, marketing, achievement of economies of scale, etc., a reshaping of the competitive landscape such that a significant fraction of the customer base of established businesses comes within its reach and incumbents are placed at a significant disadvantage by virtue of the novelty of the offering (and the attractiveness of its value proposition), which they cannot quickly or easily match. Disruptive technologies (or innovations) may be considered existential threats to established businesses.

Disruptive Technology or Disruptive Innovation is contrasted with Sustaining Innovation, which aims to deliver evolutionary and incremental improvements in value propositions to customers, and is driven by strong understanding of the past and the future needs of existing customers – as perceived by either the business or the customers themselves, or both.

Defined by a List of Criteria

A disruptive technology

  • is a novel capability (not necessarily including any fundamentally new technology)
  • offered by a business which does not – at the time of initial offering – compete directly in already well-defined business sectors or against specific established businesses
  • that has reshaped, or has the potential to reshape, the competitive landscape
  • through subsequent sustaining innovation (and other business activity)
  • such that a significant fraction of the customer base of established business comes within its reach
  • placing incumbents at a significant competitive disadvantage by virtue of the novelty of the offering (and the attractiveness of its value proposition)
  • which the incumbents cannot quickly or easily match
  • and which therefore presents an existential threat to established businesses

Scope

Disruptive technology is a defined term of Business Analysis. Disruptive technology is a defined term of Strategic Analysis.

Notes   [ + ]

1.Originally described as a novel package in Disruptive Technologies – Catching the Wave (paywall) by Joseph Bower and Clayton Christensen in the Harvard Business Review. Note that a novel package does not necessarily imply fundamental technological novelty such as the use of graphen instead of silicon for transistors.
2.Typically through comparative assessment of performance trajectories
3.Sales, marketing, achievement of economies of scale, etc.

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