Understanding Disruptive Technology and Innovations

Learning Objectives of Disruptive Technology

• Discuss the processes that have enabled certain technologies to change people’s lives.

• Identify existing disruptive technologies that used the Disruptive Innovation Model.

Evolution of Media and Entertainment

• The history of movie consumption has transitioned from traditional Cinema and Home Theater setups to rental services like VideoCity.

• In the modern era, Netflix represents a major shift in media consumption:

  • It currently streams movies and has more than $151$ million paid subscribers.

  • It operates in over $190$ countries around the world.

  • It offers a wide range of TV series, documentaries, and feature films across diverse genres and languages.

  • The service includes its own original productions.

Historical Television Standards ($1920-1930$)

• Television sets were initially available only to a privileged few.

• The price tag for early units ranged from $200 \text{ USD}$ to $600 \text{ USD}$.

• Screen sizes were limited to $5$-inch, $9$-inch, and $12$-inch models.

• The systems offered only $5$ channels.

• Broadcasts were strictly in black and white.

Modern Streaming Hardware and Ecosystems

• Various devices allow users to connect streaming services to current televisions:

  • Roku: Includes options such as Roku Express, Roku Ultra, and Roku TV (with the streaming experience built-in).

  • Amazon Fire TV Stick: Includes a Voice Remote and supports services like Amazon Prime Video, Netflix, Voot, NDTV, TED, Viacom 18, Gaana, Spuul, and Eros Now.

  • Google Chromecast: A $4K$ TV streaming device supporting YouTube, Hulu, Spotify, HBO NOW, CBS, Pandora, Google Play, and Just Dance.

• Interconnected services available on these platforms include Spotify, Showtime, and various game consoles.

The Disruptive Innovation Model

• According to Clayton Christensen, "A disruptive innovation is not a breakthrough innovation that makes good products a lot better."

• Disruptive approaches transform organizations and unlock entirely new sources of growth.

• General Pattern of Disruptive Innovations:

  • The model plots performance/features against time.

  • Incumbent Product A typically serves high-quality and most demanding use cases.

  • New Product B enters the market to get a customer's job done for a fraction of the price.

  • Disruptive technology often starts at the fringes or margins of the market.

  • It generally performs worse than existing technology at first.

  • It consists of new technology or low-cost versions of existing products introduced by learning companies.

Fifteen Major Disruptive Technologies

• Robots Become Coworkers: Robots are being employed for an increasing range of job roles beyond the production line. Advanced robotics investment is leading to the rise of social robots that can read emotions and talk, serving as digital assistants.

• From Wearable to Implantables: Disruption is shifting from external health and fitness trackers to technology inside the body. Approximately $50,000$ people already have electronic RFID implants. Intel has developed a chip for controlling smart devices directly in the brain.

• Bots Usurp Apps: Advancements in AI, machine learning, and cloud software have improved chatbot performance, creating real opportunities for business advantage.

• Genetically Modified Lifeforms: DNA editing on the Clustered Regularly Interspaced Short Palindromic Repeats ($CRISPR$) genome editing platform is transforming biology.

• $3D$ Printing Gets Industrial: The speed and scale of $3D$ printing have increased exponentially. It is moving from a tech novelty to a core part of manufacturing and construction processes across many industries.

• AI Replaces White Collar Expertise: Successes in machine learning showcase Artificial Intelligence as a more reliable way of replacing smart people at tasks involving pattern recognition.

• Quantum Computing Gets Practical: Companies are evaluating the effect of quantum computing on business models due to the potential for massive process and data disruption.

• Self-Driving Vehicles: Large automotive groups like Waymo are developing prototypes or purchasing driverless technology companies to reclaim market ground.

• Blockchain Disrupts More than Banks: The potential of blockchain (e.g., Bitcoin) extends beyond banking and mortgage systems to other industries.

• Virtual Reality (VR) as a Commercial Reality: VR is no longer limited to gaming and entertainment. Education and healthcare are at the forefront of this innovation, with additional uses in real estate and travel.

• From Augmented Reality (AR) to Mixed Reality (MR): AR gained global attention through Pokemon Go in $2016$. The AR industry is predicted to reach global revenues of $90 \text{ billion USD}$ by $2020$.

• Robots Teaching Themselves: Breakthroughs include bot-to-bot communication, where one machine shares learning with another, and deep learning-based networks that robots tap into for self-teaching.

• Cybersecurity Wars: The rise of Big Data and the Internet of Things ($IoT$) makes businesses and consumers vulnerable. Huge investment is being poured into this area to combat potential threats.

• The Things Taking Over the Internet ($IoT$): Applications span gardening, transport, energy, sport, farming, and medicine. While Connected Cars and Smart Homes are realities, the most significant changes to productivity and business models will occur in Smart Cities and Industrial $IoT$.

• Renewables and Clean Energy Diversify: Growing public appetite for green energy is driving innovation in solar, wind, tidal, biomass, and geothermal technologies, including virtual power stations.

Summary of Disruptive Trends

• Disruptive Innovation and Technology brands understand consumer trends before they become mainstream and capitalize on them better than competitors.

• Many successful disruptive brands understand the shift to a sharing economy and design their business models to align with this economic change.