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Disruptive innovation is a double-edged sword

22 March 2014

From the Vancouver Business Journal:

Disruptive technology, more accurately termed “disruptive innovation,” is defined as an innovation that doesn’t just change a product, but an entire market. Classic examples include the automobile assembly line that made cars affordable commodities, and more recently, e-books and online music sharing that are ushering out traditional publishers and stifling the market for CD players.

Such innovation, said Mike Bomar, executive director of the Columbia River Economic Development Council, is a two-edged sword.

“We see disruptive technologies in two ways,” said Bomar. “They can represent major shifts that could shut down industries or make them move elsewhere. But they can also represent an opportunity if we can position ourselves to capture high-growth companies or sectors that could evolve out of the disruptive technology.”

. . . .

Thurston, chief investment officer for Ironstone Group, a venture capital firm that invests solely in disruptive businesses, said 90 percent of startup companies that concentrate on sustaining innovation fail. However, he said those who find ways to provide lower cost, more accessible, easier to use goods and services increase their survival chances to 66 percent.

. . . .

In the retail sector, said Roberts, the Internet is forcing major changes to the traditional brick and mortar business model. Consumers now have easy access to price comparisons and same-day delivery.

Link to the rest at the Vancouver Business Journal

Disruptive Innovation

3 Comments to “Disruptive innovation is a double-edged sword”

  1. This needs to be explained more often. In essence, any advancement causes disruption. Any change in the law, especially those that encourage the exporting of jobs, disrupts society. When companies moved their factories out of the country, accelerated by NAFTA in the 1990s, they threw out of work the people who were going to buy those products.

    For writers, Amazon is not the direct cause of the disruption that’s challenging New York book publishers. The cause is the Internet that allows Amazon to thrive. Without Amazon, some other company would have used the same tools. Without the Internet, you wouldn’t have Amazon, period.

  2. Hmm… I think Sears could have disrupted publishing, had they so chosen (I’m talking about real Sears, classic Sears, not the current entity that uses that name). They basically had Amazon plus a brick and mortar store in every town of any size.

    They scrapped their catalog operation in 1993, the same year that NCSA released the first widely-used graphical web browser.

    • On the other hand, Sears Canada still runs a catalogue operation, but it amounts to nothing because the company’s management doesn’t know what to do with it.

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