Disruptive Technology

Disruptive technology is cool and fine if you’re the one doing the disrupting, or if you’re a consumer who benefits from this cool new tech, but not so much for the industries that were disrupted.

Disruptive technology is new technology that’s game-changing, creating new market value that puts a rift (where there was none) into existing markets.

For instance, disruptive technology might be a substitute good, like cars were for horse-n-buggies, which also created the consumer need for gas and reduced the need for horsies. Likewise, computers displaced typewriters and cell phones changed the way we communicate. In more recent times, smartphones and laptops have changed the way we work and live, creating markets for apps and giving people the ability to travel and work at the same time like never before. There’s also the recent rise of social media, which has had wide-reaching effects on the economy and politics.

Big corporations are pretty bad at responding to disruptive technology. They’d rather say “eh, that’s a fad, it’ll pass” than have to figure out a way to change their entire game. Well...until it’s clearly not a fad, and the disruptive tech forces them to change, since it’s threatening their very existence by forcing a change in the status quo.