Disruptive innovation changes the world. It seeps into the unguarded supply chain like a virus if economy is considered as one large collective organism. Supply-demand goes off balance. This is because it is in the nature of disruptive technologies to rapidly increase demand.
Increasing demand is the reflection of how the new technology was able to reach to larger masses by being more affordable and accessible. It’s chaotic. Every small or large business is clinging on to whatever it can to win this battle. The new technology now dominates the market. It changes the course of day-to-day business activities. All eyes are on this innovation and everyone in the business is breathing it. A new infrastructure replaces the old one. It’s a new market! It’s a shamble! In an effort towards a sustainable world, the companies also have to struggle to keep up and sustain themselves. Those who adapt and turn issues into opportunities will survive. Resources really are going to run out someday. Sustaining innovation on the other hand does not shock the market behavior by a sudden entry but rather evolves in digestible steps. Sustaining technologies are improved products.
Clayton M. Christensen‘s book The Innovator’s Dilemma describes his theory of disruptive innovation. It talks about how companies fail to adapt to such changes. He lays down principles of disruptive innovations that companies fail to follow.
Here are some examples of disruptive and sustaining innovation that also offer a contrast between these two.
Plastic is an example of disruptive innovation. It disturbed the market back then by changing the whole scenario. An example of sustaining innovation on the other hand is bioplastic, an evolutionary innovation that cannot be integrated into existing infrastructures so easily but is capable of replacing petroplastic. It could have been a revolutionary innovation had it not brought along with it land and food issues.
Green revolution is a classic example of how new technologies such as high yielding seeds changed the world or rather saved the world. Norman Borlaug’s techniques were disruptive in behavior. They went beyond industrialized nations. Genetically Modified Organisms (GMOs) on other hand is an advancement to these revolutionary techniques. This so called ‘Gene Revolution’ is a sustaining innovation. But is it? It’s in some people’s black books.
A must read: The corporate assault on the security of the global food supply, The Thistle Volume 13, Number 4: June/July, 2001.
Solar and wind power:
Renewables like solar and wind are the new green invaders of the market. It’s an all grown industry that is trying get into the veins of policies but existing policies offer some resistance. To make sure that it doesn’t disrupt current market behavior, taxes are levied. Taxes buffer the impact the technology can have on the market, it acts as a cushion to the market. Can we say that a disruptive innovation is advertently or inadvertently converted to a sustaining one? For example,
The state House in Oklahoma this week passed a bill that would levy a new fee on those who generate their own energy through solar equipment or wind turbines on their property. – The Week
In terms of subsidies, petroleum still gets a large share. Old companies have started to invest in renewables – a sign of adaptation.
Oil & Gas:
Shale gas is a natural gas that is trapped in shale formations underneath the Earth’s surface. It is cleaner and greener than coal. A disruptive combination of technologies like horizontal drilling, hydraulic fracturing (aka fracking), computer imaging and modelling gave rise to the natural gas extraction boom. This makes shale gas a rapidly available energy resource and that changes things around. US is currently the largest producer of natural gas.
To watch the LinkedIn Speaker Series with Clayton Christensen, click here.