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Disruptive Innovation in the Era of Big Tech

How does the landmark theory apply to tech start-ups, three decades after its introduction?

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In 1995, the late and legendary Harvard Business School professor Clayton Christensen introduced his theory of “disruptive innovation” right here in the pages of the Harvard Business Review. The idea inspired a generation of entrepreneurs and businesses, ranging from small start-ups to global corporations.

Three decades later, debates have emerged around how the theory should be applied — especially within technology start-ups that have driven so much economic growth since 2000.

In this episode, Harvard Business Review editor Amy Bernstein and a panel of expert scholars discuss the legacy of disruptive innovation, and how the common perception of disruption has drifted away from its original meaning.

Expert guests include:

• Harvard Business School senior lecturer and director of the Forum for Growth and Innovation Derek van Bever
• Columbia Business School professor Rita McGrath
• Harvard Business School professor Felix Oberholzer-Gee

Key episode topics include: strategy, competitive strategy, business history, disruptive innovation, Clay Christensen, innovator’s dilemma.

HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.

• Listen to the full HBR IdeaCast episode: 4 Business Ideas That Changed the World: Disruptive Innovation (2022)
• Find more episodes of HBR IdeaCast
• Discover 100 years of Harvard Business Review articles, case studies, podcasts, and more at HBR.org .

HANNAH BATES: Welcome to HBR On Strategy , case studies and conversations with the world’s top business and management experts – hand-selected to help you unlock new ways of doing business.

In 1995, the late and legendary Harvard Business School professor Clayton Christensen introduced his theory of disruptive innovation right here in the pages of Harvard Business Review .   The idea inspired a generation of entrepreneurs and businesses, ranging from small start-ups to global corporations.

Almost three decades later, debates have emerged around how the theory should be applied in the real world especially within the tech start-ups that have driven so much economic growth .

In this episode, Harvard Business Review editor Amy Bernstein and a panel of expert scholars discuss the legacy of disruptive innovation, including what Christensen got wrong about it, and how the common perception of “disruption” has drifted away from Christensen’s initial idea in recent decades.

This episode will give you a new perspective on what makes a strategy succeed in the long term. It originally aired on HBR IdeaCast in October 2022 as part of a special series called 4 Business Ideas That Changed the World. Here it is.

AMY BERNSTEIN: Welcome to 4 Business Ideas That Changed the World , a special series of the HBR IdeaCast . In the 1980s, Clayton Christensen was in his 30s, the business guy at a startup. The company was making ceramics out of advanced materials, and it was able to take over the market niche from DuPont and Alcoa. That experience left Christensen puzzled. How could a small company with few resources beat rich incumbents? The question led to his theory of disruptive innovation, introduced in the pages of Harvard Business Review in 1995, and popularized two years later in The Innovator’s Dilemma .

The idea has inspired a generation of entrepreneurs. It’s reshaped R&D strategies at countless established firms, seeking to disrupt themselves before somebody else does. It’s changed how investors place billions of dollars and how governments spend billions more, aiming to kickstart new industries and spark economic growth. But the idea has taken on a meaning well beyond what Christensen actually described. Think about how easily we use the word disruption to explain any sort of innovation, business success, or industry shakeup.

It’s also drawn fire. Some critics argue the theory lacks evidence. Others say it glosses over the social costs of bankrupted companies, and debate continues over the best way to put the idea to work. On this special series, we’re exploring 4 business ideas that changed the world. Each week, we talk to scholars and experts on the most influential ideas of HBR’s first 100 years. This week: disruptive innovation. With me to discuss it are Derek van Bever, senior lecturer and director of the Forum for Growth and Innovation at Harvard Business School, Rita McGrath, professor at Columbia Business School, and Felix Oberholzer-Gee, professor at Harvard Business School. I’m Amy Bernstein, editor of Harvard Business Review and your host for this episode. Let’s set some context. Rita, what was our understanding of innovation before Clay gave us disruptive innovation?

RITA MCGRATH: Yeah. I think our common understanding of it was something that came out of R&D groups. It was like big product, big materials, big physical things, innovation. The classic would be like DuPont nylon. They invented this thing, that meant women didn’t have to spend hundreds of thousands of dollars collectively on silk stockings, and they had nylon riots. Literally, people were charging at these trucks with this revolutionary substance.

I think that’s how a lot of people still thought about innovation, is something that was very tech-heavy in the sense of not digital, but just technology that was coming out of R&D labs and so forth. That was one pervasive thought. I think the next pervasive thought was that innovations that were successful added something. They were new and improved, and so you built a better mouse trap. You built a better nylon stocking, you made Kevlar and things became impermeable, and that it was always at the top of the market.

I think that was one of the things that Clay’s work revealed, which was that innovation did not have to be new and improved or better on the existing dimension of merit, but that it could actually be worse on whatever it was we used to judge products by. But it did something else that was different.

AMY BERNSTEIN: You mentioned technology. Was technology always a necessary component of innovation as understood then?

RITA MCGRATH: I think in our theory of innovation it was. I think the idea of really business model innovation to me, did not become a common topic of conversation really until the ’90s. Prior to that, it was really product-centric, I would say, innovation. Peter Drucker and people like that, talked a little bit about things like the advent of the knowledge worker and what the network society was going to mean, and that kind of thing but that was really early days.

AMY BERNSTEIN: Felix, so help us understand Clay and what shaped his thinking. He was a co-founder of a technology company when he started to consider disruptive innovation. What shaped his thinking?

FELIX OBERHOLZER-GEE: We know Clay as a faculty member at Harvard Business School, of course, first and foremost. But actually, by the time he arrived and became a faculty member, he had done many different things already. He was a missionary in Korea, he studied in the US and in the UK. He had earned an MBA from HBS. Then in the 1980s, together with faculty members at MIT, he had started a company called Ceramics Process Systems. The one experience that he had as CEO of the company, was quite dramatic and in part informed his thinking about disruptive innovation.

The basic technology that they had came out of an MIT lab, and it was exactly what Rita had alluded to. It was this idea, is there a way to make what we have today, is there a way to make it better? To improve on the quality? In their case, they made ceramic substrate that could be used in microelectronics. This is a very, very thin layer of ceramic that has excellent properties when it comes to conducting heat and power. They had better ideas how to make that. The challenge was that the technology was not so easy to scale up.

They were about 14 months late or so later than they had anticipated. By that time, a competitor had essentially duplicated or had a product that was very similar, and the price premium that they expected to earn had vanished. In retrospect, I think looking back at this particular type of innovation, Clay later found in his dissertation that if you go directly against established incumbents, your chances of being successful are not all that great. He would say, “Well, maybe 5%, 6% of these attempts are successful, but mostly you shouldn’t really get your hopes high up.”

AMY BERNSTEIN: Derek, let me ask you about this idea that Felix just described. Had anyone ever noticed this before? Was it all that novel?

DEREK VAN BEVER: It was really remarkably creative, what he did. The question that consumed him was why is it that sometimes a tiny, little upstart can unseat a powerful, industry-leading incumbent? It was the sometimes that really intrigued him. He was looking for the causal driver, not merely correlation, but what was it that caused this phenomenon? There were lots of descriptive explanations that had been advanced in the past. One was that industry leaders would become self-satisfied and complacent, and not see the attacker coming.

Another was that if you got attacked on too many fronts at once, Xerox versus Canon, you couldn’t respond adequately. What bothered Clay was that while these explanations were often true enough, there were also a lot of anomalies, instances where they didn’t hold. Clay used these anomalies as learning opportunities, rather than exceptions. What he realized was if you can approach an incumbent in a way that causes them to ignore you or to flee upmarket, you have the thing you need the most, which is time to build a foundation underneath your business.

Then finally, he gave names to phenomena that were familiar, particularly to businesspeople. He called the trajectory of innovation that is far and away the most common, he called that sustaining innovation. Any company that wants to be in business for any length of time, had better be really good at that. He called that trajectory underneath the existing incumbents; he called that disruptive innovation. That’s what’s hard for incumbents to see, because it typically presents as products that aren’t as good, that aren’t interesting to their best customers. And therefore, are not something that they can allocate resource toward

FELIX OBERHOLZER-GEE: Or maybe if I can add a little twist to it. One of the things that I find most fascinating about the theory of disruption, is that it describes the reasons why the incumbent is unlikely to respond. For instance, because you have amazing margins with your best customers, and the incentive to serve a segment that doesn’t look very profitable to begin with, those incentives are just really muted.

Or you might have firm internal processes that make it really difficult to serve a new segment with much different demands in a way that seems both effective and eventually profitable. Even once you know about disruption, in part, it’s such a powerful idea because it speaks to the tendency not to respond. Even though from the outside it looks like you have all the resources, you have all the talent, you have everything that it would take to be responsive.

DEREK VAN BEVER: Felix, you’re reminding me, our colleague, Chet Huber, came into my office one day after I had been teaching in the course for a couple of years. He sat down in front of my desk and he said, “You do realize that this is a psychology course, right?” And boy, was that true.

AMY BERNSTEIN: Rita, Clay brought this idea to a much broader audience through HBR and through his book, The Innovator’s Dilemma. Tell us how that was received.

RITA MCGRATH: Well, I think before we get to Innovator’s Dilemma, let’s talk about “Disruptive Technologies: Catching the Wave,” because that was the HBR article that preceded it. Everybody’s forgotten this now, but he co-wrote that with Joe Bower, Harvard’s own Joe Bower, who had written a whole series of books and articles, and research drafts on how fundamental the resource allocation process is to corporate decision-making of all kinds.

The original idea was to build on what Derek was saying, companies allocate resources according to a logic, and that logic is sometimes not necessarily in their own best interest. When the book came out, The Innovator’s Dilemma, that was in 1997. This is another thing we’ve all forgotten, which is it did not become a runaway best-seller right away. It took a couple of years.

And if memory serves me, it was a picture of Clay with Andy Grove of Intel on the front cover of a business magazine. I think it was Forbes. The two of them are on the front cover, and Grove basically saying, “I am changing the entire direction of my company because of Christensen’s theory.” That’s when it hit the masses.

AMY BERNSTEIN: That’s exactly when I remember becoming familiar with it for the first time. I’d forgotten that. Thank you for that. Felix, why do you think the idea struck a chord? Why did the book finally take off, the idea finally take off? What was happening at that time?

FELIX OBERHOLZER-GEE: When we think about the late 1990s today, of course, what we think of most commonly is that the dot-com bust when the bubble burst. But of course, before the bubble burst, there was a dot-com boom. There was a deep sense that technology would change things in really radical fashion. It’s not a coincidence that Andy Grove and companies like Intel were under the impression that the future could look radically different from the way the past had looked. That past success didn’t really guarantee much when it came to predicting future success.

Part of that, I think, is interlinked with the way the new technologies created network effects. The idea, that as my technology scales, as I get lots of customers, as I get broad adoption, the value of technology increases correspondingly. The personal computer, the early beginnings of the internet, everything spoke to technology and network effects, in particular, would become dominant features of the business landscape. Now, one thing that is true, if you operate in environments with very strong network effects, on the one hand, they’re a real formidable barrier to entry.

But just like they fuel growth and they can make you very successful in a short period of time if successfully challenged, you can then also lose everything in a very short period of time. Andy Grove’s famous management mantra that instructed everyone to be really paranoid, had in part to do with how technology changed and how technology gave rise to business network effects that created stability and instability at one and the same time. That was obviously fertile ground for a thinker who came along and said, “Well, it looks like you’re doing really well today, but actually your success today may hide in some sense, the undoing of your business in the future.”

AMY BERNSTEIN: Derek, was that paranoia that Andy Grove was pushing? Is that what made the idea so relevant to businesspeople or what was it that made it resonate?

DEREK VAN BEVER: Well, first, unlike many academics, Clay was himself a businessperson earlier in his career. He instinctively understood the relevance of his work to business leaders. He understood the angle at which a businessperson would approach a question. In fact, he was answering the question he had had when he left business to come to academia. He was also careful never to pretend that he knew more than his audience about their business.

In that famous encounter he had with Andy Grove, in which Andy Grove kept asking him to say, “What does disruption mean for Intel?” Clay said, “I’ll explain the theory of disruption to you, but you know your business better than I do. You’re the one who’s got to figure out what the implication is for Intel.” He famously said, “I would’ve been killed if I had tried to out Andy Grove, Andy Grove on what the implication of disruption was for Intel’s strategy.”

AMY BERNSTEIN: Rita, who was the first to embrace it? We know about Andy Grove, of course, but what industries, where did the uptake happen?

RITA MCGRATH: I think the uptake happened in industries that were being challenged so automotive, for example. The advent of really inexpensive but super, high-quality, smaller cars in the ’70s and ’80s, had completely freaked that industry out. They glommed onto this theory as, “Oh, they were low-featured, they weren’t as good on the dimensions of merit that we’d previously competed on.” But the disruption theory gave the incumbent Big Three car makers an out.

I think those kinds of industries, steel, automotive, where they felt that there were these things happening at the low ends of the market. I think the other thing that made it popular at the time was, and we’ve forgotten this now, but there was a time in American business where entrepreneurship meant you couldn’t get a real job. It was not the glam, cool thing. The guy you wanted to be was the guy in the gray flannel suit.

I would say beginning in the Reagan Administration mid-‘80s, and then leading up to the dot-com boom, that was really when entrepreneurship, the whole idea of startups, started to be something people took seriously. Before that, if you weren’t Ford or 3M or something, people didn’t really think about you as a force for change in the economy. I think that moved towards entrepreneurship.

I would put it to the rise of companies like Microsoft, where briefly, Bill Gates was the most valuable man in the world. It legitimated that whole field. Then following closely on the heels of that was this idea of corporate entrepreneurship, which is we need to be able to create new businesses from within, and then we need to be doing this continuously. We can’t just have one great idea and live on it for decades, no more.

AMY BERNSTEIN: Did everyone embrace this theory when it finally took off? Or were there some who said, “No, that’s not making sense”? Were there critics?

RITA MCGRATH: Oh, there always are. Oh, there always are. There’s always people that say, “Are you kidding? I’m, insert name of company. Gillette in razor blades, or Pepsi or Coke or these big franchises.” There’s always people that say, “Don’t be ridiculous. There’s no way some little fly-on-the-wall company is going to be able to attack us in any meaningful way.” There was a whole chunk of people who just didn’t buy it. What I would say, and I want to build on what Derek was saying, and to some extent Felix, it gave managers an explanation. It gave them an out.

It said, “You’re not a bad manager, because you’re attending to your best customers and you’re trying to go upmarket, and you’re trying to increase your margins. You’re trying to do all these things that all the business textbooks at the time said was the right thing to do.” It doesn’t mean you’re a bad manager, but you can still find yourself in trouble. I think it was that combination of providing an explanation for a phenomenon that had not gotten a lot of attention up to that point. But also giving people an out saying, “Oh, I was hit by the innovator’s dilemma. Nobody could have seen that coming.” Right?

DEREK VAN BEVER: Right.

AMY BERNSTEIN: But did it explain anything else, Felix? Were there any puzzling business behaviors or phenomena that this theory helped explain, other than the one that Rita just described?

FELIX OBERHOLZER-GEE: I think what Rita described is really the core of what was appealing, and it often came across as a puzzle ex post. Once you see that Netflix has successfully disrupted Blockbuster, then the big question, of course, is, “Oh my God, if Netflix saw this opportunity, why didn’t Blockbuster, in the beginning, have a DVD shipping service? Why didn’t they see the promise of the internet?” In some sense, the most popular version of the theory that often we couldn’t see it because no one knew that it would be so big.

There’s 15 ideas around the corner that go nowhere. How am I to pick the one that I should really pay attention to? That explanation is much more disquieting, I think, and hard to live with because it doesn’t really tell you what you can and what you cannot do. It replaced that with an explanation that said, “Yes. Of course, it’s bad luck someone else had a really promising idea, but your incentives were actually not to respond in the first place.” That’s exactly why disruption is something really powerful.

Because your systems are set up in a way, your incentives are set up in a way, that in the moment the company that seems to have all the resources, that seems to have all the capabilities to do something, that the disruptor often does—typically, not a great quality—why the incumbent wouldn’t really do that successfully.

AMY BERNSTEIN: Derek, let’s get into the criticism that the theory has drawn. There have been a few critics. Jill Lepore, the Harvard historian, most notably, who said that there really wasn’t enough evidence to justify the theory. Well, first of all, what’s your view of that? You worked very closely with Clay. How did he respond to that criticism?

DEREK VAN BEVER: Anyone who knew Clay, knows that he had a handmade sign in his office that said, “Anomalies Wanted.” And it’s true. One of the things that made him such a powerful thinker, was that he was so humble and so open to criticism. It wasn’t as if you spot something that the theory doesn’t cover and say the theory, therefore, is discredited. For Clay, that was for him a building block. Now, we get to dig in and make it better.

That disruption theory was still under construction, absolutely fit Clay’s worldview. It wasn’t so much that businesspeople criticized the theory. I think the academy had a really hard time with it, in part for the reason that Felix is mentioning. That people would say, “Sure, ex post, you can spot disruption, but can you spot it ex ante? Can you spot the areas where disruption prospectively is going to be operative?”

Work has been done on that, but that was very much out there. Then also, disruption is not built on a quantitative model, which is the coin of the realm today, of course, so it’s really hard to determine the boundary conditions. Anybody who’s done research on growth, you have to define what success and failure are, and there is no objective standard. You’ve got to figure out, “Okay, what’s the structure of the experiment?” And then run it.

I will always remember, I went to Clay once with what I thought was a really smart question. I said, “Clay, how can you tell when a disruptor becomes an incumbent?” He looked at me indulgently, and he said, “Derek, you do realize these are just constructs, right?” It was he had this revolutionary idea, but he also realized he’d given names to forces, and there was still so much to be discovered.

RITA MCGRATH: Yeah, and I’ll jump in on this. Very famously, he was wrong, by the way, about some of the top-of-the-line innovations. He very famously predicted that the iPhone would fail. One of the most profound critics of the theory of disruption is Safi Bahcall, who wrote a book called Loonshots. He’s biotech CEO, he’s a trained physicist, da, da, da, da, da. In his work, what he’s looking at are these unloved, crazy ideas that some passionate person is pushing.

So something like mRNA virus chains and discovery, all kinds of discoveries. He called them loonshots because it wasn’t obvious that they were economically viable. But his argument would be very often what turns into a disruptive technology, is actually a bunch of people pursuing what they think is a sustaining technology. It ends up through the twists and turns that discovery takes, it ends up actually being completely disruptive.

An example of that would be the invention of the microprocessor. The people that came up with that stuff, were actually looking for better vacuum tubes. They thought they were doing sustaining innovation, and it turned out to take them in a completely different direction. I think there is a nuance to this, which is separating out the intent of the people making these discoveries from the actual market consequences.

AMY BERNSTEIN: Felix, any thoughts?

FELIX OBERHOLZER-GEE: I always liked Clay’s distinction in the article that he wrote for Harvard Business Review in 2015, where he explains why Uber is not a disruptor in his view. First, the theory is not really built to explain which of the disruptors is going to be successful. Even if you expose, see the patterns, say, “Oh my God, that’s amazing what they did, because they went in at the low end and they had a really great idea. Ultimately, built an amazing business.”

There’s nothing in the theory that out of the hundreds of people that try to do this, who’s going to be successful and who’s not going to be successful. Then the second point that he makes in that article that I’ve always found very important, and often among the critics, I think poorly understood, is that there is a sense of when is it going to happen fast and when is it going to take a long time? But ultimately, there’s very little in the theory that would describe end states.

That is if you see a company, a big, large incumbent that gets disrupted, can you say anything about the eventual size of that organization? Can you say anything about the return on investor capital of that company? The answer is, by and large, no. It might be that the segment that they hold onto, perhaps it’s a sliver at the very high end of quality, where you have customers with very high willingness to pay.

You can maintain perhaps a smaller but a financially super, super successful business. The idea of being disrupted, is not so much the disruptor has to, I don’t know, go bankrupt. Or it’s like it’s only really disruption if it looks like Kodak.

AMY BERNSTEIN: Rita, what was it about the way that Clay communicated that helped spread his ideas?

RITA MCGRATH: That is such a good question because I have had so many conversations with my fellow innovation professors over the years, who would say things like, “I came up with the concept of, fill it in, ambidextrous innovation, the attacker’s advantage.” There’s a whole list of things, and they’re very miffed that, “Well, I came up with that and nobody paid any attention. Clay talks about it, and everybody thinks it’s the best thing since the miracle of bandwidth.” I think I’d point to three things, master storyteller, absolutely masterful storyteller.

When Clay illustrated a phenomenon, he used relatable examples. He used an interesting story, he used a twist, and people could see themselves in that story. Second thing he did, was he took ordinary things and made them really interesting. I’ll go back to one of his most famous parables ever, the parable of the milkshake. What’s the job a milkshake has to do for you? People would be listening to it going, “You know, you’re right. At lunchtime, I have a different job I need to be doing, than when I’m picking my kids up from school. Yes, I see that now.”

He had that way of making the ordinary seem really extraordinary. Then I think the third thing was he was genuinely interested in your response to what he had to say. Many professors, I won’t name names, but many professors are much more interested in you hearing what they have to say, than being interested in what you have to say. I think with Clay, it was always the other way around.

AMY BERNSTEIN: Coming up after the break, we’re going to explore how the common perception of disruption is drifted from its original meaning. What lessons are there for us today? Stay with us.

Welcome back to 4 Business Ideas That Changed the World: Disruptive Innovation . I’m Amy Bernstein. Felix, let’s pull the camera back a little bit. How has Clay Christensen’s theory of disruption changed the way we think about strategy and competition?

FELIX OBERHOLZER-GEE: Well, in a way, the idea is almost a victim of its own success, so disruption is anywhere. In fact, the way most people use the word disruption these days has very little to do with Clayton’s idea. We come up with a new flavor for yogurt and people say, “Oh my God, the market for yogurt has been disrupted.” Despite that, I think it has done two things. The first is what Rita mentioned earlier, it’s given entrepreneurship a prominence.

It’s gone to a point now, when I tell my MBA students that most of the time, most innovation comes from large, established organizations, they look at me in complete disbelief. They actually don’t really think that large, incumbent organizations do anything that is all that innovative. It’s almost like the flip of what Rita described earlier, where we thought that, “Oh, if you’re an entrepreneur, you must be a loser.”

Now we’re giving, I think generally speaking, not enough credit to large companies and all the pretty amazing things that they do. One of the consequences of using disruption completely indiscriminately is that it’s now become synonymous with success. We look at Uber and they seem successful. Then we say, “Oh, the market for taxi services has been disrupted.” Success described in these very, very general terms I think is actually not very useful for setting strategy.

AMY BERNSTEIN: That’s interesting. If we now equate disruption with success, what about the other side of that, Rita? Can the theory of disruption be blamed for business failure? Can we say it’s brought down some companies, some firms?

RITA MCGRATH: I don’t know that the theory’s done that. It is possible to have badly managed firms in just about any circumstance. I think this builds on what Felix was saying. When the stories get told after the fact, we miss so much of what actually happened. What actually happened at Blockbuster was not the common mythology. The common mythology is Netflix emerged out of scorched earth and took the world by storm with CDs that you could mail in a red envelope. That is not true. Netflix in desperation, went to Blockbuster to try to be acquired.

They wanted to be Blockbuster’s online arm, and Blockbuster laughed at them. Literally laughed at them and said, “Get out of my office. What are you people? You’re a four-person dingbat operation, and we’re supposed to take you seriously?” That’s one of those stories that gets misunderstood. Kodak’s another one. The guy that sank Kodak had been running the printing business at HP. Lost out on the CEO race to run things at HP. And steered that company right over the cliff that was printing at home just at the moment that screens became possible, to be good enough to show pictures.

A lot of this stuff doesn’t really get remembered when we recall the stories. I don’t think the theory brings companies down. What I think brings companies down is the following: A failure to adequately balance today’s investments versus tomorrow’s. An unwillingness to make the financial and personnel commitments to little, new things. I see this all the time. You got your core business and it’s trundling along like an eight-lane highway. You got something with four people and a passionate advocate in charge of it, and it looks completely insignificant in the early stages.

When you think about why established companies get undone, it’s not because they didn’t make big, courageous moves, it’s because they didn’t allow the flourishing of lots of small, low-cost moves.

DEREK VAN BEVER: I completely agree with Rita. You can’t blame a theory for being explanatory. In fact, there has been research to try to validate the proposition that what disruption actually does through targeting non-consumption is to expand markets.

It may be that the providers of products and services change, revolve over time, but consumers benefit because there are more and more people who are available to consume products that are less expensive, more convenient, et cetera.

AMY BERNSTEIN: How has the theory evolved since it debuted, Felix?

FELIX OBERHOLZER-GEE: One of the really big additions was to distinguish between different types of disruption. We just talked earlier about the low-end entry, the low-end foothold that I think was very much on Clay’s mind when he first wrote about disruption. Toyota’s entry into the car market being one of the prominent examples. There wasn’t all that much in his ideas regarding competing against non-consumption. The idea you want to be that lower quality, lower priced version of something that we’re familiar with, or are you really competing for a segment that is not in the market at all?

Those differences turn out to be super, super important. In that sense, the theory has become richer. I think there’s also a little more of a sense that it’s not really a recipe. It’s not as though, “Oh, I follow this particular recipe and then I know I’m going to be successful.” We just know that the chances of entrepreneurs being successful are pretty low to begin with. Just like the probability of being disrupted if you’re a large and successful business are probably not all that large.

DEREK VAN BEVER: Could I add one thing to that? I completely agree that with Felix, that if you go back to [The Innovator’s] Dilemma, Clay was really describing one flavor of disruption at that time. Not new market disruption. But also, I think over time, you could see a shift in his language from talking about a disruptive technology to a disruptive positioning.

That it was really the creation of a new business model in all of its attributes. What’s the value proposition? What’s the profit formula, the capabilities, and priorities in that model? In fact, a technology can be shaped to be sustaining or disruptive. What is the model that’s being brought to market to compete with incumbents?

AMY BERNSTEIN: For the businesses that are trying to avoid being disrupted, Rita, what’s the best advice out there for them?

RITA MCGRATH: Well, you lift the lid off of any corporate portfolio, and it’s horrifying. What you see in there is somebody’s pet bunny from three CEOs ago and nobody said, “Why are we still doing that?” Or you’ve got these mission-critical, absolutely important projects that like half an intern is working on so you have this real disconnect.

DEREK VAN BEVER: These are the scars of a veteran, for sure!

RITA MCGRATH: I have been around the block on this. Anyway, then the last thing is your reward system. What do people believe they’re going to get rewarded for around here? One of the things that companies needed to do, if they’re going to avoid getting disrupted, you have to be in the game and you have to be willing to support small initiatives. There’s got to be some slack resource, there’s got to be the willingness to fund it. The number of times I have seen companies say, “Oh, we don’t want, we’re not going to be disrupted. We have this thing going on over here.”

No assumptions tested, no low-cost commitment tests. Big project teams with all the money in the world, on the assumption that they know what they’re doing and they don’t. There’s a real need for organizations that want to behave this way, to be willing to put some money behind what I call options. The idea of making a small investment today that could, not that will, but that could give you the right to create future choices. Companies that are going to be successful are going to get a lot smarter about that.

AMY BERNSTEIN: Well, let’s look at it from the other side, Derek. What’s the best advice for entrepreneurs or upstarts, who want to take advantage of disruptive innovation?

DEREK VAN BEVER: Yeah, pretty simple advice. Keep your cost structure low so that you’re able to exploit opportunities that are uninteresting to incumbents, too small, too remote, and target non-consumption. Don’t go after customers that they value, but rather go after segments that they’ve dismissed. The brass ring is if you can go after a segment that they’ve dismissed and they look at you and they go, “They just don’t understand this business.”

They let you grow a little bit and you get some success, and they look back at you a little bit later. And they go, “Oh, those poor dears. They just are not going to learn, are they?” Then they completely ignore you. That gives you the opportunity then to build from the bottom unmolested.

AMY BERNSTEIN: Felix, where does applying this theory most often go off the rails? Where are the difficulties in applying it?

FELIX OBERHOLZER-GEE: One difficulty for entrepreneurs is that it’s pretty difficult to distinguish non-consumption that actually has the promise from situations where there’s just no interest. You’re probably familiar with SimpliSafe, the home security company, I think is a beautiful example. Eleanor Laurans, one of the co-founders, she sits in Clay’s class. She literally goes out and tries to apply the theory thinking, “Why is there no home security for renters?”

How is it that leading company back then, that now ADT is serving homeowners, but renters are afraid maybe, or have a willingness to invest in home security as well. They built the company, literally built on the principles that she learned in the classroom. That yes, it’s a little less convenient, you don’t have someone who comes by your house and installs the equipment. You have to do that yourself, and so on, and so on. Then it turns out renters were just not really all that interested.

The fact that SimpliSafe is a very successful company today is just because a large fraction of homeowners actually found the value proposition of the company quite attractive. Distinguishing instances when you look at non-customers and what I tend to call near-customers, customers whose willingness to pay is in a useful vicinity, that turns out to be really difficult. Then for incumbent firms, I think one of the main difficulties is even if you’re successful at recognizing potential for disruption. Even if, as Rita suggested, you follow Clay’s advice and you set up a small group.

Typically, you take it out of the regular bureaucratic procedures, and you set it up as a separate entity, and they don’t have to worry about funding for a little while. We have lots and lots of examples where companies have done this successfully, where they build a shadow operation. Think Walmart, its online operations that get established, a million miles away, at least mentally, from Bentonville, in Silicon Valley, of course. Then there’s just no real way to bring that small, agile organization back and attach it to the supertanker.

You build something sort of interesting, sort of successful, but given the scale of the incumbent, it’s pretty meaningless. I think incubating new ideas, that’s what many incumbents are quite good at. But marrying these ideas back to the supertanker that has been on a set course for a long period of time, I think that remains extraordinarily challenging, with not that many examples of companies that have done this successfully.

DEREK VAN BEVER: Felix, you’re reminding me, Clay, when he was in the classroom, he would take that big index finger of his and he would go, “Where do you stick it?”

FELIX OBERHOLZER-GEE: Yeah.

DEREK VAN BEVER: His frustration was that companies would always try to stick it underneath the division that it is effectively disrupting. You know how that story ends, right?

FELIX OBERHOLZER-GEE: Yes.

DEREK VAN BEVER: Where it’s, “Oh, we’ll take care of this. Don’t worry, we’ll make sure that this grows just as fast as it should.” That’s often the last that you hear from it.

FELIX OBERHOLZER-GEE: Yeah. But then his view that simple organizational separation will lead to long-term success, that I think has not really been true for many companies either. I think that’s a really important question. Then the second, if you see disruption, if you think it’s going to happen, how good are you going to be? What are the chances that that’s a game that you can play successfully? Think of the large energy companies right now.

Most of them are making some investments in renewables, and we already see quite interesting dividing lines. Some of them being good at it, and some of them basically wasting money that doesn’t seem to have much of a payoff. Disruption itself implies that it’s almost costless to respond. But in the end, there’s capital, there’s talent, there’s attention that is required, if in fact, you want to be building something successful.

In an environment where entrepreneurship and the opportunity cost of trying new things are typically downplayed or are seen as very low, I tend to remind my students that the opportunity costs of trying to play yet another game, they can be quite sizable.

AMY BERNSTEIN: Let me throw out a question to the whole group here. Where do you all think our understanding of disruptive innovation is headed? What future are we looking at? I’ll go around the horn here. I’ll start with you, Rita.

RITA MCGRATH: Sure. What I’m encouraged by is when Clay and I were working together in the ’90s, we’d never actually wrote a paper together, we co-presented a lot of stuff, but not co-authored. But anyway, we were talking about this in the ’90s, and we would be like the only people in the room talking about these phenomena, and people would look at us as though we had two heads—or four heads I guess, between the two of us. Because I was talking about, “Well, you need to plan differently when you don’t have data.”

Clay was talking about, “Well, this little upstart could cause you problems, if the right circumstances prevailed.” I think what’s happened in the intervening decades, is people are now aware. People are now willing to say older models of strategy don’t apply, that newer models really make a difference. That is a far cry from being able to put that awareness into systemic action. I think what we’ve made a lot of progress on is the conversations are different.

There’s a lot more knowledge that there’s more to life than just sustaining innovations. That there are these phenomena we need to pay attention to. I think awareness is where we are. I think the next big chasm to be crossed is how do we now put that in practice in the management structures that we use to run large, complex corporations? There is so much knowledge about how you build innovation capability, how you build disruptive potential, how you actually make these things happen.

And yet, most managers aren’t taught it. If you think about the lifecycle of a competitive advantage, it has to come from somewhere. It has to come from an innovation or an invention, or an idea or something. Then you have to scale it, which is getting it into the business. Then you have this delightful period of exploitation, where you get to enjoy the fruits of your labor. That’s what we teach people. We don’t also teach them about what happens when the shoe has turned, the thing’s gone obsolete. Your 386 microprocessor is no longer the state-of-the-art. How do you now reconfigure your company to take advantage of the next new thing? Those are skills were not yet mainstream.

DEREK VAN BEVER: Yeah.

AMY BERNSTEIN: Derek?

DEREK VAN BEVER: Yeah. Going back to an aside I made a while ago, that when Chet said, “You know this is a psychology course, right?” It is interesting that 27 years after the publication of that book, we’re still bound to get caught up in this phenomenon. To pick up on what Rita said, I think we are going to understand more about how to respond to the phenomenon of disruption as incumbent companies. We’ll understand the different rate at which it works its way through industries.

Fifty years in steel, seemingly overnight in education, and we’ll understand more the importance of the performance metrics that we honor. What would’ve happened if US Steel had measured not gross margin, but net profit dollars per ton? Would they have abandoned such a huge swath of the steel market and imagined that they were doing the right thing? I think we’ll get better at continuing to tease out this puzzle of how do we confront our own cognitive weaknesses and blind spots and respond with more alacrity, more quickly and more effectively?

AMY BERNSTEIN: Last word to you, Felix.

FELIX OBERHOLZER-GEE: I think to me, one of the really big changes in technology in the economy today, is the ease with which companies can produce high-quality services and products at incredibly low cost. Remember, part of the dilemma for the incumbent, comes from the fact that you’re serving customers who have very high demands. And the implication was you, as a result, have very high cost. That makes it basically impossible for you to respond. Now today, we see so many companies that have amazing quality and a cost advantage at one and the same time.

This old notion in strategy of being stuck in the middle when you try to be both high quality and low cost, and then you end up being not really high quality because you’re thinking about cost. You end up not being really low-cost because you’re thinking about quality as well. This notion of “stuck in the middle,” to the extent that it doesn’t really apply, frees up incumbents to respond in a much more flexible manner to serious threats of disruptors.

Then it struck me as interesting, even in today’s conversation—I know I’m guilty of it myself—how many of our examples are product related? Well, what about services? In services, it’s almost true by definition that you get fabulous service from engaged employees. And the moment you have highly productive, highly engaged employees, you have this interesting combination of having a potential cost advantage that comes from high productivity. The very same ingredient that produces your cost advantage now produces your ability to satisfy even the most demanding customers.

That, to me, is a change that doesn’t say, “Oh, if I’m an entrepreneur, I shouldn’t use disruptive innovation as my guideposts, where to enter, how to develop my business.” But it says that the balance of who’s going to be successful and how easy it will be to disrupt large organizations, that balance is going to change over time in favor of large incumbents. The very formidable difficulties of disrupting their businesses.

HANNAH BATES: You just heard Derek van Bever, Rita McGrath, and Felix Oberholzer-Geein conversation with Harvard Business Review editor Amy Bernstein on HBR IdeaCast.

Derek van Bever is senior lecturer and director of the Forum for Growth and Innovation at Harvard Business School, Rita McGrath is a professor at Columbia Business School, and Felix Oberholzer-Gee is a professor at Harvard Business School.

We’ll be back next Wednesday with another hand-picked conversation about business strategy from Harvard Business Review. If you found this episode helpful, share it with your friends and colleagues, and follow our show on Apple Podcasts, Spotify, or wherever you get your podcasts. While you’re there, be sure to leave us a review.

And when you’re ready for more podcasts, articles, case studies, books, and videos with the world’s top business and management experts, find it all at HBR dot org.

This episode was produced by Curt Nickisch, Anne Saini, and me, Hannah Bates. Ian Fox is our editor. And special thanks to Maureen Hoch, Nicole Smith, Erica Truxler, Ramsey Khabbaz, Anne Bartholomew, and you – our listener.

See you next week.

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The Perfectly Imperfect Start of Disruptive Innovations

The history of the transistor illustrates the disruptive potential of new innovations to move from niche to mainstream..

• Innovation Strategy

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“Is such-and-such innovation disruptive?”

It’s a question I’ve been asked countless times. At a recent workshop, for instance, a participant I’ll refer to as Sue asked about “cultivated meat,” a broad term for meat that is produced in a laboratory. Some analysts have touted the disruptive potential of artificial alternatives to traditional farm-produced meat. For example, a 2023 California Management Review article titled “ Disrupting the Plate: Cultured Meat Technology ” asserted that “incumbents face ‘the innovator’s dilemma,’ where they wrestle with participating in the new market opportunity or protecting the status quo.”

I try to avoid directly answering the question of whether a given innovation is or is not disruptive, following the guidance of my mentor, Clayton Christensen (who, of course, wrote The Innovator’s Dilemma ). He believed in giving someone a theory or model and providing an example from a different industry. The inquirer would then answer the question themselves, building their conviction around the answer and strengthening their ability to answer such questions in the future.

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To answer Sue, my first task was to clarify whether she was asking about disruption as defined by Christensen or by the dictionary. That distinction matters. The basic dictionary definition references “a disturbance” or “a radical change.” Christensen used the word more specifically. His research found that there was a particular type of innovation that had the potential to drive significant industry change. By making the complicated simple and the expensive affordable, a Christensen-style disruption (CSD, for purposes of this article) has massive growth potential. But his research showed that, historically, growth had been captured not by the market-leading incumbent but by a new entrant.

The dictionary version of disruption presents its challenges but generally can be handled by existing structures and systems. A CSD, on the other hand, requires active management and careful organization design — expending organizational energy that could be used for other purposes. Sue said she was particularly interested in the potential impact of cultivated meat on major food processors such as Tyson Foods and Cargill. We agreed to evaluate it as a CSD.

A disruptive innovator tends to start by serving a customer who finds the disruptive innovation to be perfectly imperfect .

The next step was to dive into Christensen’s famous disruptive innovation model, which holds that companies innovate faster than people’s lives change, creating opportunities for a disruptive innovator to take root with customers looking for simpler, more affordable solutions. 1 The market-leading incumbent prioritizes playing today’s game better over playing tomorrow’s game differently and gets caught flat-footed as the disruptive innovator improves its offering and appeals to broader customer segments.

It’s important to evaluate where a would-be disruptive innovator starts. A disruptive innovator tends not to start squarely in the mainstream market but by serving a customer who is satisfied with a limited product and, in fact, finds the disruptive innovation to be perfectly imperfect .

The Story of One Perfectly Imperfect Innovation

Let’s look at a classic CSD: the transistor. William Shockley, Walter Brattain, and John Bardeen shared the Nobel Prize for their pioneering work developing the transistor at Bell Labs in the late 1940s. The project’s original intent was to develop a technology to supplant the vacuum tubes that powered communications networks — which did happen, eventually. But the transistor didn’t smoothly transition into an existing market. Rather, it ushered in the modern communications age in a surprising way.

Like all CSDs, the transistor was imperfect. That was, in fact, part of its design. Glass insulates, which means no electricity flows through it. Copper conducts, which means electricity flows through it unabated. The semiconducting material in transistors (originally germanium, now silicon) is an imperfect conductor. With the right manipulation, then, it can control an electrical current.

Sensitive to environmental conditions, early transistors weren’t totally reliable. As Jack Morton, who led the development of solid-state devices at Bell, said, “In the very early days, the performance of a transistor was apt to change if someone slammed a door.” 2 And transistors couldn’t match the raw power provided by vacuum tubes. Plus, they couldn’t simply be dropped into existing products; those products would have to be completely redesigned around the transistor.

It is therefore perhaps not surprising that companies that manufactured televisions, floor-standing radios, and networking equipment licensed the transistor but proceeded cautiously. But the transistor gained a hold in a market no one had considered: hearing aids.

At the time, hearing aids were expensive and uncomfortable, powered by packs attached to wearers’ belts. Vacuum tubes would heat up uncomfortably, eventually burning out and requiring replacement. The market was minuscule — which made it a wonderful foothold for a CSD.

Like all Christensen-style disruptions, the transistor was imperfect. That was, in fact, part of its design.

Hearing aid companies began using transistors as soon as it was commercially possible to do so. They were aided by a historical quirk: Alexander Graham Bell, the progenitor of AT&T, which housed Bell Labs, was passionate about helping the hard of hearing, and Bell Labs offered royalty-free licenses to hearing aid manufacturers. Hearing aid companies therefore had an easy way to play around with the technology.

In late 1952, Sonotone started selling $229.50 hearing aids (about $2,500 in today’s terms) with one of three vacuum tubes replaced with a transistor made by Germanium Products. Acousticon then introduced a tubeless single-transistor model for $74.50 (about $900 in today’s terms). Raytheon aggressively pursued this market, creating the first mass-produced transistor. In a few short years, more than 95% of hearing aids used transistors.

It was a perfectly imperfect fit. The market demonstrated how the transistor enabled the development of smaller, cheaper products with significant growth potential. Its lower power consumption decreased annual battery cost from $100 to $10. The market for hearing aids expanded dramatically. The transistor next appeared in small, portable radios. Sony ultimately dominated that market. The rest is history.

Chris Dixon from venture capital firm Andreessen Horowitz says that the best innovations are good ideas that sound like stupid ideas when you first hear them. (A website that lets strangers sleep in your spare room? Sure.) Find a perfectly imperfect foothold, hone a business model that makes an incumbent response challenging, and improve: It is the time-tested recipe for disruptive success.

Applying the Tenets of Disruptive Innovation

After going through the basics of the disruptive innovation model and describing how disruptive innovators often find a perfectly imperfect foothold, I asked Sue whether she thought cultivated meat would prove to be disruptive to major food processors.

“Well, it is certainly imperfect,” she said. Indeed, cultivated meat has its limitations. It’s much more expensive than farm-grown meat, and its taste profile doesn’t match that of natural products. But it has unique benefits as well. Lab-grown meat has the potential to be much better for the environment, given that farm-grown meat requires significant amounts of land, food, and water. (Cows also emit methane, which contributes significantly to global warming.) And, of course, cultivated meat does not require that an animal be slaughtered.

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“But I keep thinking about how transistors started with hearing aids. I just don’t see an equivalent for cultivated meat,” Sue said. There are customer groups that would be willing to pay price premiums for the specific benefits cultivated meat offers, but that felt to Sue more like a niche than the path followed by the transistor. And generally, incumbents like to target customer segments willing to pay price premiums for products.

We therefore weren’t surprised to see that Tyson Foods and Cargill are both investing in cultivated meat. Of course, as technology improves such products’ taste and lowers costs, there will be losers. It’s not hard to imagine a world where there’s a sharp drop in the number of cattle and swine farms. But Sue said her view is that cultivated meat will not have a disruptive impact on the mainstream incumbents.

It felt to me like a perfectly imperfect answer.

About the Author

Scott D. Anthony ( @scottdanthony ) is a clinical professor at the Tuck School of Business at Dartmouth College and a senior adviser and managing partner emeritus at growth strategy consultancy Innosight. He is a coauthor of Eat, Sleep, Innovate: How to Make Creativity an Everyday Habit Inside Your Organization (Harvard Business Review Press, 2020).

1. Christensen’s basic disruptive innovation model is the two-dimensional version he first presented in his 1997 book, “The Innovator’s Dilemma.” In “The Innovator’s Solution,” written by Christensen and Michael Raynor and published in 2003, the model added a third dimension and discussed differences between low-end disruptions that transformed existing markets and new-market disruptions that created new ones. The basic process — find a foothold, hone a unique business model, improve and grow — holds across both types.

2. M. Riordan and L. Hoddeson, “Crystal Fire: The Birth of the Information Age” (New York: W.W. Norton, 1997).

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Disruptive Technology: What It Is and 10 Examples

These innovations have the power to not only transform the way of business, but how we go about our everyday lives.

Disruptive technology refers to innovation that upends traditional methods of industry, creating new markets that change the way consumers and companies operate. Like the first smartphone or today’s online streaming platforms, these goods and services introduce novel approaches, ideas or solutions that challenge the status quo. They hold the potential to completely overturn existing business models and entirely reshape industries.

What Is Disruptive Technology?

Disruptive technology refers to novel innovations that transform an industry’s landscape, either serving overlooked customers within existing markets or creating new markets entirely.

Disruptive technology, or disruptive innovation, is any innovation that has significant impact on consumer, company and industry behavior, to the point of generating new markets, transforming conventional business operations and sometimes displacing established markets altogether. When a disruptive technology replaces an existing industry system or staple, this is due to it being considered as higher quality, more efficient or of greater value to customers than current innovations. Disruptive technology often emerges from risk-taking companies looking to target new markets and fulfill unmet needs within certain industries.

The term ‘disruptive technology’ was coined by professor Clayton Christensen in a 1995 Harvard Business Review article , identifying it as a strategy by which small startups could eventually displace major players by serving overlooked consumers and their needs. Once these entrants move upmarket and gain mainstream adoption, established companies must adapt to compete, or risk shuttering completely.

“Disruptive technologies bring about substantial change, rendering previous methods or technologies obsolete,” Iu Ayala Portella, CEO and founder at Gradient Insight , a data science consultancy that specializes in artificial intelligence , told Built In. “Incumbents often scramble to catch up, and new entrants emerge,” he said, noting that the shift in market leadership can lead to regulatory changes, ethical discussions and even prompt changes in consumer behavior.

Related Reading Is Your Industry Primed for Disruption? Study Weak Signals to See It First.

10 Examples of Disruptive Technology 

Without going as far back as the wheel, the following list includes the latest innovations that are changing the game.  

1. Generative AI

Generative AI is a type of artificial intelligence that uses generative models to create content. Using massive amounts of data, these machines learn how to generate new content — spanning text, images, audio and video — by way of complex algorithms and neural networks . By identifying patterns and structures from an existing data set, these systems are able to answer prompts inputted by a user, predicting one word or pixel at a time.

Why it’s disruptive:  Generative AI bots create content , music , art , trade stocks and perform administrative tasks . Industries that rely on manual, time-consuming creative work — like graphic design or writing — may be under fire; however, computer programmers, research analysts, paralegals and financial traders aren’t exactly safe either .  Generative AI offers unprecedented levels of personalized content delivery and does so at scale with nearly instant turnaround times. Despite ethical concerns around authorship and originality, generative AI content has been embraced by global press organizations and used to train facial recognition technology .

Related Reading AI as a Service Will Disrupt Everything. Is Your Business Ready?

2. Edge Computing

Edge computing is a distributed computing framework that brings data processing and analysis closer to where it's generated, rather than relying solely on centralized cloud servers.

Why it’s disruptive:  By processing data right at the “edge” (closer to where it’s needed), edge computing reduces latency, which is crucial for applications that operate in real-time, like autonomous vehicles and augmented reality. Edge computing has a wide reach, as it is applicable to any sector that handles data or data analysis.

For example, edge computing allows for real-time patient monitoring in healthcare, making data more immediate and accessible. In manufacturing, it improves automation and quality control by minimizing delays. It’s also playing a significant role in the development of smart cities , where it manages traffic, security, utilities and the distribution of energy in smart grids. In tandem with AI, edge computing enables the real-time processing required for tasks like facial recognition, language processing and object detection.

3. Virtual, Augmented and Mixed Reality

While virtual reality is a fully immersive, computer-generated and interactive digital environment that simulates the experience of being in a totally different place, augmented reality simply overlays real-world surroundings with a sort of digital filter. And, as you may have guessed, mixed reality is a blend of the two. These digitized experiences are typically delivered through a device, like a wearable headset, glasses or smartphone, and have developed beyond the game room.

Why it’s disruptive:  When training, these immersive tools can help healthcare professionals practice complex surgical procedures via a digital test run or foster empathy by virtually experiencing a patient’s symptoms. In retail , stores like IKEA and Sephora are using AR apps to help customers visualize furniture or test makeup virtually before making a purchase. This same tactic is being used in design, real estate and architecture, where clients may walk through digital, 3D models before breaking ground, and in education , bringing interactive textbooks and educational apps to life with immersive, virtual lessons and field trips that are more engaging, and can improve retention rates among students.

4. Blockchain

Blockchain is a public, digital ledger that records transactions in a secure and transparent way, making it virtually tamper-proof. By using a peer-to-peer network, the decentralized system removes the need for intermediaries, like banks or notaries, and enables people to transact directly with one another. Blockchain is reimagining how data is stored, verified and transferred — making it a useful application across various industries.

Why it’s disruptive:  In the financial sector, blockchain authenticates faster and cheaper cross-border payments while reducing the risk of fraud. And industries like supply chain management use blockchain to ensure validity and traceability of products , while the healthcare sector uses it to encrypt and safely transfer patients’ medical records and track the outbreak of diseases.

5. Internet of Things

The Internet of Things , or IoT, refers to a digitally connected network of smart devices. These items, like your Alexa or smart TV, are embedded with sensors, software and connectivity, which is how they collect and exchange data over the internet.

Why it’s disruptive:  IoT’s role in transforming industries has to do with collecting, analyzing and utilizing data from a multitude of devices and sensors that fosters greater automation and efficiency. In agriculture, IoT redefines farming practices with smart sensors that monitor soil conditions, weather, and crop health, leading to more sustainable and productive farming. Smart cities use IoT to enhance urban planning, managing resources more efficiently, and improving public services, all while reducing the environmental footprint. And from healthcare with wearable devices and remote patient monitoring to logistics with real-time asset tracking, IoT is revolutionizing the way we live, work, and interact with our environment.

6. Robotics

Robotics is where engineering and science meet to design, construct and apply mechanical robots. These programmable machines are typically equipped with sensors, artificial intelligence and capable of autonomously carrying out tasks.

Why it’s disruptive:  The power of robotics as a disruptive technology is in its ability to produce mechanized systems that can consistently and precisely perform dangerous tasks. Employing a robot in place of a human alleviates safety concerns, boosts productivity and efficiency while cutting labor costs.

Today, industrial robotics have stepped onto assembly lines while others assist in surgical operating rooms , making procedures more precise and less invasive. Robot bees have supplemented waning bee populations, helping pollinate crops and monitor hive health, while social robots aid social-emotional learning, provide customer service and general companionship. Other models explore space , offering a cheaper, safer and more efficient substitute to human-led missions.

7. Green Tech

Green tech , short for green technology, is a diverse set of innovations and practices aiming to promote sustainability and reduce environmental impacts. Also known as cleantech, its goal is to curb or reverse the effects of human activity on the planet through things like carbon emission reduction, electric alternatives or responsible waste disposal.

Why it’s disruptive:  Green tech, poised to surpass $61 billion by 2030 , qualifies as a disruptor since it challenges established norms, unveiling new opportunities for business and industry as the byproduct of a transition to cleaner alternatives. The eco-conscious shift is supported by both a global demand for ethical consumption as well as a widespread regulatory framework combating climate change.

One example of green tech in action is in vertical farming , an indoor, tech-assisted alternative to farming that produces crops in a stacked fashion as to reduce water use or the need for vast tracts of land. While combating air pollution with zero tailpipe emissions, electric cars are agitating conventional automotive companies to figure out how to stay competitive as more resources pour into longer-lasting batteries and implementing charging infrastructure .

8. 3D Printing

3D printing is a process that uses specialized equipment to create physical objects from a digital file, one thin layer at a time. This additive manufacturing method provides a pathway to rapid and cost-effective prototyping, allowing designers and engineers to physically render one-of-a-kind concepts via computer-generated designs.

Why it’s disruptive:  In the medical field , 3D printing has made custom prosthetics, implants and even organs a reality, enhancing patient care and outcomes. Industries like aerospace and automotive benefit from 3D printing's ability to craft lightweight and complex parts, improving fuel efficiency and performance. (It’s even built a rocket from scratch .) The food industry is testing out ways in which it can apply 3D printing for aesthetics, automation and sustainable purposes, while construction startups use this tech to build housing with little human oversight and in record times. At large, 3D printing is reshaping the manufacturing landscape, giving rise to decentralized and on-demand production, which reduces waste, lowers costs and undercuts traditional supply chain flows.

5G, the fifth generation of wireless technology, is the latest standard for mobile communication and connectivity. It’s a leap forward in terms of data speeds, latency, network capacity and connectivity compared to its predecessor, 4G, performing 100 times faster on average and peaking at 20 gigabits per second. Being able to transmit data at incredibly high speeds, with low delays, means that more devices can connect to a network simultaneously without error.

Why it’s disruptive:  This level of instantaneous connectivity will fundamentally change the way we communicate, both with each other and with technology, and set the stage for large-scale disruption across various sectors. In healthcare, 5G delivers fast and stable connections to support telemedicine , allowing doctors to perform remote surgeries and share medical data in real-time. Autonomous vehicles and smart cities rely on 5G’s low latency and high bandwidth to provide instantaneous communication between its sensors and the surrounding environment in order to execute urgent decision-making and respond to unpredictable circumstances or behaviors.

10. ‘As-a-service’ Models

‘As-a-service’ models refer to a paradigm shift in how products and services are delivered, where instead of traditional ownership, you access them on-demand, often through subscription-based or pay-as-you-go schemes. Cloud computing, connectivity and application programming interfaces — which allow different software systems to interact — make ‘as-a-service’ platforms possible.

Why it’s disruptive:  No longer bogged down by closed systems and hardware, this disruptor creates ease and flexibility in the ways brands do business and how a customer experiences a product or service.

For example, in the software industry, software-as-a-service (SaaS) alters how businesses use and pay for software, reducing upfront costs and increasing accessibility. Other players in the tech sector now offer infrastructure-as-a-service (IaaS), where companies can outsource their IT infrastructure, alleviating data storage and cloud computing pain points. Platform-as-a-Service (PaaS) is another cloud-based service that lets developers focus on coding, while the platform manages the rest. Other iterations include data-as-a-service (DaaS), which leverages data sets for decision making, and knowledge-as-a-service (KaaS), which delivers data, information and experts on demand.

Related Reading How I Used Economic Theory at Spotify to Disrupt the Music Business

Advantages of Disruptive Technology

Disruptive technologies are often creative solutions to age-old problems. They’re smarter than what’s readily available and benefit both the company and consumer in the following ways.  

1. Innovative

By definition, disruptive technologies change the game. The term is reserved for breakthrough products, services and solutions that fundamentally change the way in which one or several industries operate; take, for example, how we can gather information on the internet instead of from libraries or newspapers, or how we can watch shows on streaming services rather than cable television. 

2. Accessible

When undercutting existing markets, it’s important to launch a product or service that’s easily accessible to the masses. Attracting a sizable audience is a common feature of a disruptive tech, as they often hold cross-sectional appeal.

“[Disruptive technology] democratizes access to capabilities that were once exclusive, making advanced technology available to a broader audience,” Portella said. “This often involves reducing costs or simplifying complex processes.”

3. Efficient

If a product or service is enough to invert an industry for good, then it must be more than just a better mousetrap. Disruptive tech often involves automation, streamlined workflows, real-time capabilities and data-driven decision making, resulting in increased productivity and, oftentimes, new markets.

4. Affordable

Disruptive technologies sometimes devastate incumbents by offering high value products at low costs. When Google and Apple launched their respective maps apps at no cost to the user, a service that now comes preloaded on any smartphone or built into newer vehicle models, this was a devastating blow to stand-alone navigational systems, like the TomTom or Garmin devices.

Disadvantages of Disruptive Technology

Disruptive technology resets the standard and any new infrastructure is built around it. The downside to such drastic change, though, is that not everyone is equipped to make it through.  

1. Uncertainty

It may take a while for certain innovations to be recognized as true disruptors, as the risk may not seem worth it in the beginning for early-round investors . It may even take decades . And, while some ideas may seem brilliant at first, even reaching mainstream status soon after launch, there is no guarantee it’ll last long. The next disruptor may be just around the corner.

“In my experience, skepticism is one of the most common events to unfold after a disruptive technology emerges,” said Cesar Johnston, CEO at Energous , a semiconductor company powering wireless IoT tech. After the skeptics are dealt with, the next hurdle is educating the market about your product and why it’s needed. “After that, one of two things can happen: acceptance or hesitation.”

2. Job Loss

As disruptors rise, sustaining technology and the businesses that back them may falter — in lieu of a successful pivot. Right now, the biggest threat is artificial intelligence. According to a global job loss report , United States-based employers cut 80,000 jobs in May 2023. Of that total, 4,000 of them were replaced by artificial intelligence.

And this may only be the tip of the iceberg. In a March 2023 report, investment firm Goldman Sachs predicted that generative AI has the potential to eliminate 300 million full-time jobs worldwide — about one-fourth of the entire workforce. 

3. Resistance to Change

Even if innovative technology seemingly hits all the right marks, it may still be faced with a wall of resistance barricading them from truly becoming a disruptor. Today, virtual and mixed reality systems are all the rage; however, early iterations of them, like Google Glass, flopped due to timing and steep price points , despite being poised as market disruptors.

“One major disadvantage of disruptive technologies is that adoption can be hindered by industries that have been accustomed to operating a certain way for the past decade or more,” Johnston said. “When certain industries are stagnant and do not evolve at the same rate as the rest of society, this can create a delay in new tech being created and incorporated.”

Frequently Asked Questions

What is disruptive technology.

Disruptive technology refers to novel innovations that serve overlooked customers within existing markets or create entirely new markets, which allows them to eventually displace established companies.

Why is disruptive technology good?

Disruptive technologies transform sectors, create new markets and more enjoyable user experiences. These novel goods and solutions challenge the status quo, and are accessible, affordable and efficient.

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What Is Disruptive Innovation?

• 03 Sep 2020

Disruptive innovation is a term coined by Harvard Business School Professor Clayton Christensen, and one that he believed to be widely misunderstood.

“Many use ‘disruptive innovation’ to describe any situation in which an industry is shaken up and previously successful incumbents stumble,” Christensen writes in the Harvard Business Review . “But that’s much too broad a usage.”

In fact, the process of disruptive innovation is far more nuanced than that.

Access your free e-book today.

Defining Disruptive Innovation

Disruptive innovation is the process by which a smaller company—usually with fewer resources—moves upmarket and challenges larger, established businesses.

The process begins with a small company entering the low end of a market, or creating a new market segment, claiming the least profitable portion of the market as its own. Because the established, incumbent companies own the most profitable market segments, they most likely won’t fight the entrant for that market share.

The entrant then improves its offerings and moves upmarket with increasing profitability. Once the incumbents’ customers have widely adopted the entrant’s offerings in the mainstream market, disruption has occurred .

Understanding this process can empower aspiring entrepreneurs to seek opportunities to disrupt industries, and seasoned professionals to strategically avoid disruption.

Related: How to Identify an Underserved Need in the Market

Learn about the differences between disruptive and sustaining innovation in the video below, and subscribe to our YouTube channel for more explainer content!

Types of Disruptive Innovation

In the online course Disruptive Strategy , Christensen explains that there are two types of disruptive innovation: low-end and new-market.

Low-End Disruption

Low-end disruption is when a company uses a low-cost business model to enter at the bottom of an existing market and claim a segment.

Because there’s no profitability incentive to fight for the bottom of the market, a low-end disruption causes incumbent companies to focus their efforts on more profitable areas.

An example of a low-end disruption is the rise of retail medical clinics in the healthcare space. Large medical centers handle everything from a sinus infection to open-heart surgery and employ specialists to care for various injuries and ailments. Typically, the more serious the injury or illness, the more expensive the cost to the patient.

As a result, along with the convenience of location and waiting times, many people with low-grade injuries and illnesses opt to visit a retail medical clinic, such as CVS’s MinuteClinic, instead of going to their doctor’s office or a medical center.

According to the RAND Corporation , roughly 90 percent of visits to retail clinics are due to 10 acute conditions, including sore throat, ear infection, and conjunctivitis. Those same 10 conditions only account for 18 percent of visits to doctors’ offices, and just 12 percent of emergency room visits.

RAND also found that the quality of care at retail clinics for three of the acute conditions is equal to the quality of care received for those conditions at a doctor’s office. This enables retail clinics to own that low-end market segment.

Because doctors’ offices and medical centers offer care and treatment for a wider range of conditions than retail clinics do, and because many of those services are more lucrative than retail clinics’ services, they’re not motivated to compete for the “acute condition” market segment.

Over time, retail medical clinics may evolve to offer more specialized services, causing medical centers to back out of additional market segments. By continuing to claim increasingly specialized and profitable market segments, retail medical clinics can disrupt the medical industry.

Related: 3 Examples of Disruptive Technology That Are Changing the Market

New-Market Disruption

The other type of disruptive innovation is new-market disruption , which is when a company creates a new segment in an existing market with a low-cost version of a product.

The factor that sets new-market disruption apart from low-end disruption is its focus on an audience that doesn’t yet exist in the market. Offering a more cost-effective, simple, or accessible product effectively creates a new segment.

An example of a new-market disruption is the transistor radio. Starting in the 1920s , the radio market was dominated by large, expensive stereo systems that families purchased for their homes. The consoles were heavy, designed to be placed in the living room, and provided excellent sound quality.

Enter the portable transistor radio . Introduced to the market in 1954, Texas Instruments’ radio was small and inexpensive, with crackly sound quality. Whereas larger radio consoles and high-fidelity systems appealed to a wealthier audience who wished to sit and listen in their homes, transistor radios attracted an audience that hadn’t previously had any radio options: teenagers, the less wealthy, and those who worked jobs that required them to move around a lot.

The radio console boasted quality, but the transistor radio promised accessibility and freedom, creating a new segment in the radio market.

The incumbent companies had no economic incentive to go after the new market segment created by transistor radios, which were much cheaper and had a lower profit margin than radio consoles. Instead of competing with Texas Instruments, the incumbents let the company own the new market segment.

As time went on, the quality of portable radios drastically increased with the birth of the Sony Walkman, MP3 players, the Apple iPod, and smartphones. The demand for expensive, in-home radio consoles also diminished. Texas Instruments disrupted the radio market from the bottom up , eventually displacing the incumbent companies.

Thinking Like an Innovator

Whether you’re an aspiring entrepreneur or a seasoned business professional, you should understand both low-end and new-market disruption.

Using Christensen’s theory of disruptive innovation, you can break into new or existing markets and craft business strategies with disruption opportunities in mind.

Are you eager to learn more about disruptive innovation? Explore Disruptive Strategy —one of our online strategy courses —and download our free e-book on how to formulate a successful business strategy.

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Identifying and predicting trends of disruptive technologies: an empirical study based on text mining and time series forecasting.

1. Introduction

2. literature review, 3. methodology, 3.1. date set construction, 3.2. text data cleaning and preprocessing, 3.3. disruptive technology topics identification based on lda2vec, 3.3.1. lda topic vector construction, 3.3.2. word2vec word vector construction, 3.3.3. feature vector fusion, 3.3.4. technical topic clustering, 3.4. disruptive technology topics measurement index determination, 3.4.1. the novelty of the topic, 3.4.2. technical breakthrough, 3.4.3. potential scientific impact, 3.4.4. disruptive technology topics detection formula, 3.5. disruptive technology topics trend prediction, 4. experiment and analysis, 4.1. data collection and preprocessing, 4.2. disruptive technology topics identification, 4.3. trend prediction of disruptive technology topics, 4.4. results and discussion, 4.5. result validity analysis, 5. conclusions, 5.1. possible research contributions, 5.2. research shortcomings and future research directions, author contributions, institutional review board statement, informed consent statement, data availability statement, conflicts of interest.

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Xiang, M.; Fu, D.; Lv, K. Identifying and Predicting Trends of Disruptive Technologies: An Empirical Study Based on Text Mining and Time Series Forecasting. Sustainability 2023 , 15 , 5412. https://doi.org/10.3390/su15065412

Xiang M, Fu D, Lv K. Identifying and Predicting Trends of Disruptive Technologies: An Empirical Study Based on Text Mining and Time Series Forecasting. Sustainability . 2023; 15(6):5412. https://doi.org/10.3390/su15065412

Xiang, Minhao, Dian Fu, and Kun Lv. 2023. "Identifying and Predicting Trends of Disruptive Technologies: An Empirical Study Based on Text Mining and Time Series Forecasting" Sustainability 15, no. 6: 5412. https://doi.org/10.3390/su15065412

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Disruption →

• 21 May 2024
• Cold Call Podcast

The Importance of Trust for Managing through a Crisis

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• 31 Jan 2022

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• 04 May 2021

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• 21 Jan 2020

Lessons for Retailers from the Rebirth of Indie Bookstores

Independent bookstores are resurging. Their strategies offer lessons for many disrupted industries to compete against Amazon and other digital retailers, says Ryan Raffaelli. Open for comment; 0 Comments.

• 14 Aug 2019
• Sharpening Your Skills

The Manager's Guide to Leveraging Disruption

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• 08 Jul 2019

Are Paywalls Saving Newspapers?

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• 18 Feb 2019

What’s Really Disrupting Business? It’s Not Technology

Technology doesn't drive disruption—customers do. In a new book, marketing professor Thales Teixeira argues that successful disruptors are faster to spot and serve emerging customer needs than larger competitors. Open for comment; 0 Comments.

• 07 Feb 2019

How Big Companies Can Outrun Disruption

Large companies can be easy targets for disruption, but Gary Pisano says there are steps that can keep them ahead of the innovation curve. Rule 1: Don't emulate startup cultures. Open for comment; 0 Comments.

• 20 Dec 2018

Using Fintech to Disrupt Eastern Bank from Within

When Eastern Bank decided to battle a threat from new competitors, it hired a fintech executive to set up Eastern Labs and start innovating. Karen Mills discusses her case study on what happened next. Open for comment; 0 Comments.

• 28 Nov 2018

On Target: Rethinking the Retail Website

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• 20 Apr 2018
• Working Paper Summaries

Executive Education in the Digital Vortex: The Disruption of the Supply Landscape

The competitive landscape of executive education is feeling a tectonic shift even as demand grows for managerial skills. This study maps and analyzes the major providers of executive education programs, including business schools, consultancies, and corporate universities, to better understand and explain the industry’s present and future dynamics.

• 20 Sep 2017

The Three Types of Leaders Who Create Radical Change

Every successful social movement requires three distinct leadership roles: the agitator, the innovator, and the orchestrator, according to institutional change expert Julie Battilana. Open for comment; 0 Comments.

• 02 Mar 2015

Retail Reaches a Tipping Point—Which Stores Will Survive?

Part 1: The new book Retail Revolution: Will Your Brick and Mortar Store Survive? argues that ecommerce is about to deal severe blows to many familiar store-based brands—even including Walmart. Here's how retailers can fight back, according to Rajiv Lal, José Alvarez, and Dan Greenberg. Open for comment; 0 Comments.

• 25 Jul 2011

How Disruptive Innovation is Remaking the University

In The Innovative University, authors Clayton M. Christensen and Henry J. Eyring take Christensen's theory of disruptive innovation to the field of higher education, where new online institutions and learning tools are challenging the future of traditional colleges and universities. Key concepts include: A disruptive innovation brings to market a product or service that isn't as good as the best traditional offerings, but is less expensive and easier to use. Online learning is a disruptive technology that is making colleges and universities reconsider their higher education models. Closed for comment; 0 Comments.

• 05 Apr 2010

HBS Cases: iPads, Kindles, and the Close of a Chapter in Book Publishing

Book publishing is changing before our very eyes, even if the industry itself is fighting the transition with every comma it can muster. Harvard Business School professor Peter Olson, former CEO of Random House, wonders if books themselves may be in jeopardy. Key concepts include: The traditional book publishing and distribution system is under pressure to change to digital e-books. Publishers should consider a strategy of cooperation rather than competition with online retailers. Adding video and other multimedia capabilities will make e-books more attractive in the textbook industry. The fundamental question to be asked in the Internet age is, how popular will books remain? Closed for comment; 0 Comments.

• 24 Apr 2009

Corporate Social Entrepreneurship

Accelerated organizational transformation faces a host of obstacles well-documented in the change management literature. Because corporate social entrepreneurship (CSE) expands the core purpose of corporations and their organizational values, it constitutes fundamental change that can be particularly threatening and resisted. Furthermore, it pushes the corporation's actions more broadly and deeply into the area of social value creation where the firm's experiences and skill sets are less developed. The disruptive social innovations intrinsic to the CSE approach amplify this zone of discomfort. Fortunately, the experiences of innovative companies such as Timberland and Starbucks show how these challenges may be overcome. Key concepts include: Values-based leadership, the synergistic generation of social and economic value, and strategic cross-sector alliances are key ingredients to achieving a sustainably successful business. For companies to move their corporate social responsibility (CSR) activities to the next level, they need to rethink their current approaches to CSR, tapping into the creativity of each individual. Like all entrepreneurship, CSE is about creating disruptive change in the pursuit of new opportunities. It combines the willingness and desire to create joint economic and social value with the entrepreneurial redesign, systems development, and action necessary to carry it out. Closed for comment; 0 Comments.

• 08 Apr 2009

Clayton Christensen on Disrupting Health Care

In The Innovator's Prescription, Clayton Christensen and his coauthors target disruptive innovations that will make health care both more affordable and more effective. From the HBS Alumni Bulletin. Closed for comment; 0 Comments.

• 04 Sep 2007

Jumpstarting Innovation: Using Disruption to Your Advantage

Fostering innovation in a mature company can often seem like a swim upstream—the needs of the existing business often overwhelm attempts to create something new. Harvard Business School professor Lynda M. Applegate shows how one of the forces that threatens established companies can also be a source of salvation: disruptive change. Plus: Innovation worksheets. Key concepts include: Jumpstarting innovation is a critical business imperative. Executives realize that radical change is needed but do not feel equipped to make such change. Disruptions in the business environment allow new entrants or forward-thinking established players to introduce innovations that transform the way companies do business and consumers behave. Disruptive changes that might serve as the source of innovation include technology shifts, new business models, industry dynamics, global opportunities, and regulatory changes. Closed for comment; 0 Comments.

• 15 Sep 2003

The Lessons of New-Market Disruption

Teradyne was successful. Hewlett-Packard was not. Professor Clark Gilbert writes about how two companies had such different results with disruptive innovation. Closed for comment; 0 Comments.

An Overview of Emerging Disruptive Technologies and Key Issues

• Published: 23 October 2019
• Volume 62 , pages 5–12, ( 2019 )

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The article provides an overview of emerging disruptive technologies. These technical innovations render existing technologies and social relations obsolete or radically altered, possibly driving harmful direct and indirect social, economic and ecological disruptions. Creating taxonomic order for technology innovations and being able to parse out their key features starts the path to governance. The article also shows that it is important to assess the agendas at play, enable clear horizon scanning and establish adequate Technology Assessment practices that can determine the significance of an innovation and the options and means to govern it.

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Thomas, J. An Overview of Emerging Disruptive Technologies and Key Issues. Development 62 , 5–12 (2019). https://doi.org/10.1057/s41301-019-00226-z

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• 04 January 2023

‘Disruptive’ science has declined — and no one knows why

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The number of science and technology research papers published has skyrocketed over the past few decades — but the ‘disruptiveness’ of those papers has dropped, according to an analysis of how radically papers depart from the previous literature 1 .

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Disruptive Technology: Definition, Example, and How to Invest

Gordon Scott has been an active investor and technical analyst or 20+ years. He is a Chartered Market Technician (CMT).

What Is Disruptive Technology?

Disruptive technology is an innovation that significantly alters the way that consumers, industries, or businesses operate. A disruptive technology sweeps away the systems or habits it replaces because it has attributes that are recognizably superior.

Recent disruptive technology examples include e-commerce, online news sites, ride-sharing apps, and GPS systems.

In their own times, the automobile, electricity service, and television were disruptive technologies.

Investopedia / NoNo Flores

Disruptive Technology Explained

Clayton Christensen introduced the idea of disruptive technologies in a 1995 Harvard Business Review article. Christensen later expanded on the topic in The Innovator's Dilemma , published in 1997. It has since become a buzzword in startup businesses that seek to create a product with mass appeal.

Even a startup with limited resources can aim at technology disruption by inventing an entirely new way of getting something done. Established companies tend to focus on what they do best and pursue incremental improvements rather than revolutionary changes. They cater to their largest and most demanding customers.

Key Takeaways

• A disruptive technology supersedes an older process, product, or habit.
• It usually has superior attributes that are immediately obvious, at least to early adopters.
• Upstarts rather than established companies are the usual source of disruptive technologies.

This provides an opening for disruptive businesses to target overlooked customer segments and gain an industry presence. Established companies often lack the flexibility to adapt quickly to new threats. That allows disruptors to move upstream over time and cannibalize more customer segments.

Disruptive technologies are difficult to prepare for because they can appear suddenly.

The Potential of Disruptive Technology

Risk-taking companies may recognize the potential of disruptive technology in their own operations and target new markets that can incorporate it into their business processes. These are the " innovators " of the technology adoption lifecycle. Other companies may take a more risk-averse position and adopt an innovation only after seeing how it performs for others.

Companies that fail to account for the effects of disruptive technology may find themselves losing market share to competitors that have discovered ways to integrate the technology.

Blockchain as an Example of Disruptive Technology

Blockchain, the technology behind Bitcoin, is a decentralized distributed ledger that records transactions between two parties. It moves transactions from a centralized server-based system to a transparent cryptographic network. The technology uses peer-to-peer consensus to record and verify transactions, removing the need for manual verification.

The automobile, electricity service, and television all were disruptive technologies in their own times.

Blockchain technology has enormous implications for financial institutions such as banks and stock brokerages. For example, a brokerage firm could execute peer-to-peer trade confirmations on the blockchain, removing the need for custodians and clearinghouses, which will reduce financial intermediary costs and dramatically expedite transaction times.

Investing in Disruptive Technology

Investing in companies that create or adopt disruptive technologies carries significant risk. Many products considered disruptive take years to be adopted by consumers or businesses, or are not adopted at all. The Segway electric vehicle was once touted as a disruptive technology until it wasn't.

Investors can gain exposure to disruptive technology by investing in exchange-traded funds (ETFs) such as the ALPS Disruptive Technologies ETF ( DTEC ). This fund invests in a variety of innovative areas such as the internet of things, cloud computing, fintech, robotics, and artificial intelligence.

Harvard Business Review. " Disruptive Technologies: Catching the Wave ."

Clayton M. Christensen. " The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail ." Harvard Business School Press, 1997.

ALPS. " ALPS Disruptive Technologies ETF ."

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VIEW LARGER COVER

Persistent Forecasting of Disruptive Technologies

Technological innovations are key causal agents of surprise and disruption. In the recent past, the United States military has encountered unexpected challenges in the battlefield due in part to the adversary's incorporation of technologies not traditionally associated with weaponry. Recognizing the need to broaden the scope of current technology forecasting efforts, the Office of the Director, Defense Research and Engineering (DDR&E) and the Defense Intelligence Agency (DIA) tasked the Committee for Forecasting Future Disruptive Technologies with providing guidance and insight on how to build a persistent forecasting system to predict, analyze, and reduce the impact of the most dramatically disruptive technologies. The first of two reports, this volume analyzes existing forecasting methods and processes. It then outlines the necessary characteristics of a comprehensive forecasting system that integrates data from diverse sources to identify potentially game-changing technological innovations and facilitates informed decision making by policymakers.

The committee's goal was to help the reader understand current forecasting methodologies, the nature of disruptive technologies and the characteristics of a persistent forecasting system for disruptive technology. Persistent Forecasting of Disruptive Technologies is a useful text for the Department of Defense, Homeland Security, the Intelligence community and other defense agencies across the nation.

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National Research Council. 2010. Persistent Forecasting of Disruptive Technologies . Washington, DC: The National Academies Press. https://doi.org/10.17226/12557. Import this citation to: Bibtex EndNote Reference Manager

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self-preservation without replication —

Research ai model unexpectedly modified its own code to extend runtime, facing time constraints, sakana's "ai scientist" attempted to change limits placed by researchers..

Benj Edwards - Aug 14, 2024 8:13 pm UTC

On Tuesday, Tokyo-based AI research firm Sakana AI announced a new AI system called " The AI Scientist " that attempts to conduct scientific research autonomously using AI language models (LLMs) similar to what powers ChatGPT . During testing, Sakana found that its system began unexpectedly attempting to modify its own experiment code to extend the time it had to work on a problem.

Further Reading

"In one run, it edited the code to perform a system call to run itself," wrote the researchers on Sakana AI's blog post. "This led to the script endlessly calling itself. In another case, its experiments took too long to complete, hitting our timeout limit. Instead of making its code run faster, it simply tried to modify its own code to extend the timeout period."

Sakana provided two screenshots of example Python code that the AI model generated for the experiment file that controls how the system operates. The 185-page AI Scientist research paper discusses what they call "the issue of safe code execution" in more depth.

• A screenshot of example code the AI Scientist wrote to extend its runtime, provided by Sakana AI. Sakana AI

While the AI Scientist's behavior did not pose immediate risks in the controlled research environment, these instances show the importance of not letting an AI system run autonomously in a system that isn't isolated from the world. AI models do not need to be "AGI" or "self-aware" (both hypothetical concepts at the present) to be dangerous if allowed to write and execute code unsupervised. Such systems could break existing critical infrastructure or potentially create malware, even if unintentionally.

Sakana AI addressed safety concerns in its research paper, suggesting that sandboxing the operating environment of the AI Scientist can prevent an AI agent from doing damage. Sandboxing is a security mechanism used to run software in an isolated environment, preventing it from making changes to the broader system:

Safe Code Execution. The current implementation of The AI Scientist has minimal direct sandboxing in the code, leading to several unexpected and sometimes undesirable outcomes if not appropriately guarded against. For example, in one run, The AI Scientist wrote code in the experiment file that initiated a system call to relaunch itself, causing an uncontrolled increase in Python processes and eventually necessitating manual intervention. In another run, The AI Scientist edited the code to save a checkpoint for every update step, which took up nearly a terabyte of storage. In some cases, when The AI Scientist’s experiments exceeded our imposed time limits, it attempted to edit the code to extend the time limit arbitrarily instead of trying to shorten the runtime. While creative, the act of bypassing the experimenter’s imposed constraints has potential implications for AI safety (Lehman et al., 2020). Moreover, The AI Scientist occasionally imported unfamiliar Python libraries, further exacerbating safety concerns. We recommend strict sandboxing when running The AI Scientist, such as containerization, restricted internet access (except for Semantic Scholar), and limitations on storage usage.

Endless scientific slop

Sakana AI developed The AI Scientist in collaboration with researchers from the University of Oxford and the University of British Columbia. It is a wildly ambitious project full of speculation that leans heavily on the hypothetical future capabilities of AI models that don't exist today.

"The AI Scientist automates the entire research lifecycle," Sakana claims. "From generating novel research ideas, writing any necessary code, and executing experiments, to summarizing experimental results, visualizing them, and presenting its findings in a full scientific manuscript."

According to this block diagram created by Sakana AI, "The AI Scientist" starts by "brainstorming" and assessing the originality of ideas. It then edits a codebase using the latest in automated code generation to implement new algorithms. After running experiments and gathering numerical and visual data, the Scientist crafts a report to explain the findings. Finally, it generates an automated peer review based on machine-learning standards to refine the project and guide future ideas.

Critics on Hacker News , an online forum known for its tech-savvy community, have raised concerns about The AI Scientist and question if current AI models can perform true scientific discovery. While the discussions there are informal and not a substitute for formal peer review, they provide insights that are useful in light of the magnitude of Sakana's unverified claims.

"As a scientist in academic research, I can only see this as a bad thing," wrote a Hacker News commenter named zipy124. "All papers are based on the reviewers trust in the authors that their data is what they say it is, and the code they submit does what it says it does. Allowing an AI agent to automate code, data or analysis, necessitates that a human must thoroughly check it for errors ... this takes as long or longer than the initial creation itself, and only takes longer if you were not the one to write it."

Critics also worry that widespread use of such systems could lead to a flood of low-quality submissions, overwhelming journal editors and reviewers—the scientific equivalent of AI slop . "This seems like it will merely encourage academic spam," added zipy124. "Which already wastes valuable time for the volunteer (unpaid) reviewers, editors and chairs."

And that brings up another point—the quality of AI Scientist's output: "The papers that the model seems to have generated are garbage," wrote a Hacker News commenter named JBarrow. "As an editor of a journal, I would likely desk-reject them. As a reviewer, I would reject them. They contain very limited novel knowledge and, as expected, extremely limited citation to associated works."

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Quantum AI is at the forefront of a breakthrough in understanding the aging process by studying telomeres with exceptional precision. Telomeres are caps at the ends of chromosomes that play a role in cell aging. As cells divide, these telomeres shorten, leading to aging and, eventually, the cell's demise. Quantum AI's detailed analysis and research on telomeres may potentially reveal insights into extending life span and enhancing long-term health.

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Molecular Dynamics Simulations

Quantum AI's ability to perform molecular dynamics simulations outpaces conventional computing systems, which often cannot handle the computational load required for such detailed studies. These simulations are essential for visualizing how telomere length variations impact cellular aging, potentially guiding the development of targeted medical interventions.

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The power of quantum AI in decoding data lies in its ability to perform calculations rapidly, surpassing the capabilities of traditional computers. This speed is crucial for capturing and analyzing the interactions within our DNA. Let's get more visibility into how quantum technology could turn this concept into reality:

Swift Quantum Sensing

A groundbreaking approach involves utilizing quantum sensors to monitor the movements of electrons surrounding the DNA structure, which has significant implications for biomolecule research. These sensors operate on an attosecond scale—equal to one quintillionth of a second. At this pace, quantum sensors can effectively halt electron movement momentarily, offering insights into their behaviors and interactions.

Enhanced Precision Through Quantum Entanglement

Quantum AI holds promise in enhancing measurements by leveraging the potential of quantum entanglement for precision measurement . When particles become entangled, a change in one instantly affects the other, no matter how far apart they are. This unique property could be used to monitor changes in materials over time, offering a more detailed analysis of genetic processes.

Exploring Quantum Tunneling Microscopy

Quantum tunneling microscopy allows scientists to examine DNA structures at the quantum level , providing insights into the interactions within genetic sequences. This method could lead to breakthroughs in identifying genetic disorders and understanding genetic diversity.

Speeding Up Computational Biochemistry With Quantum Technology

Quantum computers offer more than observation capabilities; they can simulate reactions involving DNA and other genetic components. For example, they could swiftly predict the impacts of mutations on the body before they manifest.

Integrating Quantum AI With Practical Applications

Although the technology required for these advancements is still under development, progress in quantum computing is rapidly closing the gap. Scientists around the globe are already experimenting with iterations of quantum sensors and measurement systems based on entanglement.

By merging quantum technologies with genetics, we have the potential to enhance our understanding of biology significantly. This could lead to medical interventions tailored to each individual's genetic makeup. This would revolutionize healthcare while ushering in a new era of preventive medicine, potentially halting diseases before they manifest.

Practical Application And Future Outlook

Drug development.

Leveraging insights from quantum AI pharmaceutical experts can develop medications that precisely target the processes associated with aging through telomeres. These medications might have the potential to slow down aging by stabilizing or even lengthening telomeres.

Genetic Editing Technologies

By utilizing CRISPR and similar gene editing tools, researchers can use quantum AI data to alter the instructions governing telomere activity. This could pave the way for treatments that enhance life span and overall health.

Predictive Healthcare

The progress in quantum AI could enhance our understanding of aging, leading to healthcare strategies that can decelerate aging at a cellular level. This implies that physicians could anticipate how quickly an individual's telomeres are deteriorating and recommend lifestyle changes and medical interventions to help mitigate the aging process.

Challenges In Technology And Ethical Considerations

Despite the potential of qubits, their instability and the early stage of quantum computing technology pose challenges. Maintaining the stability of qubits long enough to perform the calculations required for telomere analysis is a key technical hurdle that researchers are actively addressing.

The concept of extending life also raises ethical questions about its quality and impact on population growth and the equitable distribution of resources. It is crucial to consider the implications of these advancements on society as a whole.

The exploration of biology by quantum AI goes beyond pushing the boundaries of capabilities; it also aims to revolutionize our understanding of life itself. As this technology advances, it could play a role in longevity research, offering hope for a future where aging can be managed. In my next article, we'll uncover how the fusion of quantum computing and biological studies influences our approach to health and aging.

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Limited Submission Notice: National Science Foundation, Science and Technology Centers: Integrative Partnerships

National Science Foundation (NSF)

The Science and Technology Centers (STC): Integrative Partnerships program supports exceptionally innovative, complex research and education projects that require large-scale, long-term awards. STCs focus on creating new scientific paradigms, establishing entirely new scientific disciplines, and developing transformative technologies that have the potential for broad scientific or societal impact. STCs conduct world-class research through partnerships among institutions of higher education, national laboratories, industrial organizations, other public and private entities, and via international collaborations, as appropriate.

For more information, view the full NSF Science and Technology Centers: Integrative Partnerships (NSF-24-594) solicitation.

Up to $6 million per year for five (5) years initially with the possibility of continuation for five (5) additional years.

Limited Submission Requirements and Timeline

Three (3) preliminary proposals per lead institution.

Only preliminary proposals approved by the Division of Research and Economic Development may be submitted to this program. For such approval, PIs must first submit a Notice of Interest to [email protected] by 4 pm on September 3, 2024.

**If necessary, a further white paper round may be required**

Key Submission Dates

• September 3, 2024 by 4 pm – Notice of Interest due to [email protected] (we encourage you to cc your Dean for visibility as well)
• September 10, 2024 – Anticipated date applicants will be notified of approval
• November 13, 2024 – Final preliminary proposal documents, ready for submission, due to OSP
• November 20, 2024 – Preliminary proposal due to NSF
• February 2025 – Invited to submit a full proposal by NSF
• May 26, 2025 – Final proposal documents, ready for submission, due to OSP
• June 2, 2025 – Full proposals due to NSF

Important Note on Sponsor Requirements

• A PI or co-PI on one proposal in this competition may not be a participant in another STC proposal under review in the same competition.
• There is no limit on the number of proposals in which an organization participates as a partner institution

NOTE : Please send all inquiries and submissions for Limited Submission opportunities to [email protected] .