Knowledge push and market pull (Christensen, 1995 Disruptive Technologies - Catching the wave)

Question 1

Linear model of innovation

Answer 1

Sees innovation as a straight line process, with ideas flowing from one to another.

Question 2

Who likes the linear model?

Answer 2

• Researchers involved in theoretical research
• Economists - easier to explain straight line processes using models
• Public policy makers focussed on uptake and impact
• Business policy makers focussed on first mover advantages

Question 3

Problems with linear model

Answer 3

• The user is remote from the process of innovation
• It ignores feedback loops, where product or process innovations trigger basic innovations
• Ignores innovation taking place in marketing by users

Question 4

Chain linked model of innovation

Answer 4

Shows how basic research is first and foremost an important contribution to the stock of existing knowledge and therefore a direct influence on innovation, although it may give rise to new designs.

Question 5

Disruptive technologies/innovations

Christensen et al, 1995

Answer 5

• Disruptive innovations are those that start at the bottom of performance-cost curves and persistently have move up market, until established competition in the market is replaced
• Generally disruptive innovations allow a whole new population of consumers at the bottom of markets access to products they would not have previously due to low skills or insufficient funds
• Characteristically, disruptive innovations have lower margins and the products/services are simpler.

Question 6

Incumbent firms neglect investment in disruptive technologies

Answer 6

• Disruptive technologies produce lower margins and are initially commercialised in niche markets
• Existing customers are not looking or asking for the disruptive technologies

Question 7

Implications of developing disruptive technologies

Answer 7

• Entrepreneurs can exploit disruptive technologies (high margins, niche markets)
• Christensen claims that incumbent firms should set up semi-autonomous business units to develop disruptive technologies or at least respond to the risk of disruption

Question 8

• Innovators dilemma

Christensen, 2000

Answer 8

Sustaining innovations meet customers current needs, disruptive innovations evolve and eventually meet customers future needs.
Following a sustaining innovation path makes sense in the short term - better products, better margins, selling to existing customers but following niche markets and disruptive technologies will be more effective in the long term, providing the opportunity to grow

Question 9

Example

Answer 9

• Cameras on smartphones were initially useless, and were only used by small groups of people. This has now developed into smartphone cameras which more often than not have replaced digital cameras
• Wikipedia rendering normal encyclopaedias extinct
• Uber displacing normal taxis