CSC: Industry Disruptions Proceed At Their Own Pace

ATN-300InsightaaS: Long time readers of ATN are aware of the regard that I have for David Moschella, whose blog posts make CSC's Leading Edge Forum an important source of IT insight. Today's featured post illustrates the perspective that he brings to the industry. In it, Moschella challenges the notion that disruptive innovation "now happens much faster than in the past." Majority US consumer penetration of radio and TVs, for example, occurred more rapidly than did majority adoption of PCs or mobile phones. Specific technology firms' offerings (e.g., Facebook, Netflix, Twitter) have gained broad usage, but these, he argues, are more akin to a specific TV show or movie than a unique technology - and there are precedents for overwhelming success in each of these areas as well.

Moschella then highlights a concept (from Clayton Christensen) that disruptive change occurs in three phases. In the first, new innovations are "toys" with functional deficiencies. Over time, successful innovations become "threats" to established products and companies. In the third phase, these disruptive innovations are viewed as "the Obvious solution." Moschella sees a long list of potential disruptions in the Toy phase today, including Bitcoin, MOOCs, wearables, various types of robotics and remote controlled/self-directed technologies, and many other innovations. VCs, he says, will provide funding for firms in these areas as they attempt to move into the next phase, while established competitors will wait until the most successful of them emerge as threats - at which point it will likely be too late for the incumbents to fight off the insurgents.

This is a brief read but an interesting one, and it helps to provide context for much of what we view as discrete but important developments in technology (and the economy as a whole) today. 

 

The digital camera was invented in 1975, but it wasn’t until 2012 that Kodak officially went bankrupt. The Apple I was introduced in 1976, but it wasn’t until 1998 that Compaq’s acquisition of Digital Equipment Corporation signalled the end of the minicomputer era. The MP3 file format was agreed to in 1993, but it wasn’t until 2006 that Tower Records closed its doors. Time-sharing computers were developed in the late 1950s, but didn’t become the dominant form of computing until the rise of Amazon AWS, launched in 2006.

The speed of disruption varies widely, but it is rarely sudden.

We are often told that technology change now happens much faster than in the past, but this isn’t really true. The time it takes for a new technology to be adopted by 50 percent of US households has long been used as the basis for objective comparisons. Using this metric, it is generally agreed that both radio (eight years) and black-and-white television (nine) reached the 50 percent threshold much faster than personal computers (17) or mobile phones (15). Half of US households have had internet access since roughly 2002, so depending upon when you consider the internet to have been developed (a case can be made for the 1970s, 1980s or 1990s), you can get almost any number you like.

What about the extraordinarily rapid growth of Facebook, Twitter, Netflix, Uber, Airbnb et al? Economists rightly put these internet-based services in a separate category...

Read the entire post on the Leading Edge Forum blogsite: Link

 

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