Disruptive Technologies: An Expanded View

Abstract

The term "disruptive technology" as coined by Christensen (1997, The Innovator's Dilemma; How New Technologies Cause Great Firms to Fail. Harvard Business School Press) refers to a new technology having lower cost and performance measured by traditional criteria, but having higher ancillary performance. Christensen finds that disruptive technologies may enter and expand emerging market niches, improving with time and ultimately attacking established products in their traditional markets. This conception, while useful, is also limiting in several important ways.By emphasising only "attack from below" Christensen ignores other discontinuous patterns of change, which may be of equal or greater importance (Utterback, 1994, Mastering the Dynamics of Innovation. Harvard Business School Press; Acee, 2001, SM Thesis, Massachusetts Institute of Technology). Further, the true importance of disruptive technology, even in Christensen's conception of it is not that it may displace established products. Rather, it is a powerful means for enlarging and broadening markets and providing new functionality.In Christensen's theory of disruptive technology, the establishment of a new market segment acts to channel the new product to the leading edge of the market or the early adopters. Once the innovation reaches the early to late majority of users it begins to compete with the established product in its traditional market. Here we present an alternative scenario in which a higher performing and higher priced innovation is introduced into the most demanding established market segments and later moves towards the mass market.