DISRUPTIVE AND INCREMENTAL INNOVATION IN A CHANGING WORLD

The two primary categories of innovation are disruptive and incremental. Disruptive innovation tends to replace existing ideas, products, services, or processes. They are innovations that are very different or even revolutionary and they replace existing ideas, products, services, or processes and perhaps lead to markets that were previously nonexistent. Disruptive innovation can lead to massive changes in an industry and to what is referred to as creative destruction in the marketplace. The internet, the horseless carriage, GPSs, and digital encoding of music and video technology were disruptive innovations resulting in the development of new markets. Incremental innovations involve smaller improvements in ideas, products, services, and processes. They are like adding unique features to a product or service. But even incremental improvements can have a disruptive effect on the marketplace. For example, consider the incremental improvements in wireless phones that eventually lead to the development of Apple’s iPhone and to the numerous smartphone offerings.

PRODUCT TECH LIFECYCLE

Life cycles are a very useful way to understand how products and technology evolve over time. They are very useful in tracking product and process differentiation. They can be used to understand the evolution, growth, and decline of ideas and phenomena in the physical world, the plant and animal kingdom, and technology. The most commonly used life cycles in business are the technology life cycles and the product life cycles. They are used to track the diffusion of technologies and products. Diffusion is the acceptance, adoption, and awareness of a technology or a product by individuals. The technology and product life cycles are essentially the same, except the product life cycle is focused on selling products while the technology life cycle is focused on innovation. The technology and product life cycles consists of four phases that follow the classic S-curve and they consist of awareness of the technology, technological growth, technological maturity, and a decline of interest in the technology.

There are a number of factors that influence the diffusion of products and technology. These factors include whether the technology solves an important problem, how well the public or target market understands the technology, the value versus cost calculation made by consumers, how well the product or technology has been marketed, the effectiveness of the social network in communicating the benefits of the technology, the effectiveness of the supply chain in delivering quality products in a timely manner, and finally, how well the technology performs. Performance is the most important factor influencing diffusion, but it can be trumped by any of these factors. There were nearly a quarter of a million patents granted by the U.S. Patent Office in 2010. There have been nearly 5.2 million patents granted since 1963. The point is that technology development never stops.