Wednesday, April 19, 2017

Disruption in New and Emerging Markets

In essence, Clay Christensen’s theory of disruption is about:
1) A disruptive innovation a) originates from the low-performance end of the market (meeting the needs of the unserved and/or over-served); b) has the potential to grow and to eventually capture a significant number of mainstream consumers; c) may potentially displace the leading firms in a market or create new markets;
2) A sustaining innovation a) originates from listening to the expectations of the mainstream consumers; b) improves performance at a rate that mainstream consumers can absorb; c) does not change much the current structure of the industry
For example, Additive manufacturing, especially in the medical field – in terms of manufacturing prosthetics, skin grafts, inner organs and several other uses is a technology that has created a completely new market – making 3D printed replacement organs and prosthetics, which could be offered at much lower costs than current options of high quality prosthetics. The completely new market is that for cultivating skin grafts and organs from stem cells using 3D printing. This could revolutionize the current medical scenario involving long waitlists for patients requiring organ transplants. Although 3D printing was patented by Charles Hull in 1980, its use in medicine originated in 1999 when a 3D printed bladder was successfully transplanted using technology developed by the Wake Forest Institute for Regenerative Medicine.
Changes in the IT industry today are highly accelerated, where even a new technology could be ‘disrupted’ or changed in a short time span. For us as IT professionals, it is important that we can not only identify technology as disruptive when it starts to display the characteristics of one but be able to use predictive analysis on existing as well as upcoming technology. This is important so that when we become part of industry players, we are able to analyze periods of lull in innovation in any given field (pure technology or its practical implementation), and also anticipate the kind of innovation required to ensure that there are no gaps for entrants to possibly ‘disrupt’ the incumbents. Incumbents need to innovate constantly in accordance with changing customer preferences and market competition.

It is important to not only focus on disruptive technologies, since there are several new innovations which may not fit in with Christensen’s idea of disruption. Take for instance Uber, which is revolutionizing the taxicab industry, and may soon become a sort of a sustaining innovation. Another example is technologies like personal computers, smartphones, and tablets, all considered disruptive at the time they were introduced - but in the current scenario, they could be viewed as sustaining innovations. Thus, it is necessary to focus on more than ‘purely’ disruptive technologies.

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