Innovation is the commercial application of an invention. The people who make innovations are called entrepreneurs. Innovations bring new products, technologies etc.
Now, more than any other period in history, innovations are shaping the world economy. Digital technologies are changing life style, products, services and changing life style.
What makes the present era more unique is the speed at which one innovation and a product displaces the existing one. A new product or technology makes the old one outdated quickly. This situation indicates disruptive innovations. Disruptive innovations are those innovations that quickly displace existing products and technologies.
A disruptive innovation is an innovation that creates a new market and value network, and ultimately disrupts an existing market and value network displacing an earlier technology.
The idea about disruptive innovation was first coined by Harvard Professor Clayton Christensen in his book ‘The Innovator’s Dilemma (1997)’. Christensen classified innovations and new technologies as either sustaining or disruptive. Sustaining innovation improves existing products and technologies whereas disruptive innovations challenges established firms, products and business models.
Recent history and trends shows the quick invention and innovation cycle across the world leading to rapid disappearance of old technologies and the establishment of new ones. To survive, a firm has to be a perpetual innovator. Technological progress in electronics and IT is indicative of a new trend described as ‘disruptive innovation’. How mobile phones have displaced mobile music devices is a classic example for disruptive innovation.
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