The Importance of Disruptive Technologies

Disruptive technologies are not always disruptive to customers, and often take a long time before they are significantly disruptive to established companies. They are often difficult to recognize. Indeed, as Christensen points out and studies have shown, it is often entirely rational for incumbent companies to ignore disruptive innovations, since they compare so badly with existing technologies or products, and the deceptively small market available for a disruptive innovation is often very small compared to the market for the established technology.

Even if a disruptive innovation is recognized, existing businesses are often reluctant to take advantage of it, since it would involve competing with their existing (and more profitable) technological approach. Christensen recommends that existing firms watch for these innovations, invest in small firms that might adopt these innovations, and continue to push technological demands in their core market so that performance stays above what disruptive technologies can achieve.
Disruptive Innovation
Technology innovation has often been characterized as either radical or incremental [1].
Incremental innovation refers to changes that “build on and reinforce the applicability of existing technology”. These changes strengthen the value of existing technology and the products that use them by making the products more reliable, simpler to use, lower in cost, or accessible to a larger customer base. Most established companies are involved in researching, creating, and marketing incremental innovations to their products. Radical innovation refers to changes that “destroy the value of an existing knowledge base” [2].
These changes negate the value of existing technology by providing an alternative that is significantly different and to which older technologies cannot be adapted.

2. Leifer, R.; McDermott, C.; O’Connor, G.; Peters, L.; Rice, M.; & Veryzer, R. (2000).
Radical innovation: How mature companies can