A disruptive innovation is an innovation that helps cre-
ate a new market and value network, and eventually dis-
rupts an existing market and value network (over a few
years or decades), displacing an earlier technology. The
term is used in business and technology literature to de-
scribe innovations that improve a product or service in
ways that the market does not expect, typically ﬁrst by
designing for a diﬀerent set of consumers in a new mar-
ket and later by lowering prices in the existing market.
In contrast to disruptive innovation, a sustaining inno-
vation does not create new markets or value networks
but rather only evolves existing ones with better value,
allowing the ﬁrms within to compete against each other’s
sustaining improvements. Sustaining innovations may be
(i.e. “transformational” or “rev-
olutionary”) or “continuous” (i.e. “evolutionary”).
Sustaining innovations are typically innovations in tech-
nology, whereas disruptive innovations cause changes to
markets. For example, the automobile was a revolution-
ary technological innovation, but it was not a disrup-
tive innovation, because early automobiles were expen-
sive luxury items that did not disrupt the market for horse-
drawn vehicles. The market for transportation essentially
remained intact until the debut of the lower priced Ford
Model T in 1908.
The mass-produced automobile was a
disruptive innovation, because it changed the transporta-
tion market. The automobile, by itself, was not.
The current theoretical understanding of disruptive in-
novation is diﬀerent from what might be expected by
default, an idea that Clayton M. Christensen called the
“technology mudslide hypothesis”. This is the simplis-
tic idea that an established ﬁrm fails because it does
not “keep up technologically” with other ﬁrms. In this
hypothesis, ﬁrms are like climbers scrambling upward
on crumbling footing, where it takes constant upward-
climbing eﬀort just to stay still, and any break from the
eﬀort (such as complacency born of proﬁtability) causes
a rapid downhill slide. Christensen and colleagues have
shown that this simplistic hypothesis is wrong; it does not
model reality. What they have shown is that good ﬁrms
are usually aware of the innovations, but their business
environment does not allow them to pursue them when
they ﬁrst arise, because they are not proﬁtable enough at
ﬁrst and because their development can take scarce re-
sources away from that of sustaining innovations (which
are needed to compete against current competition). In
Christensen’s terms, a ﬁrm’s existing value networks place
insuﬃcient value on the disruptive innovation to allow its
pursuit by that ﬁrm. Meanwhile, start-up ﬁrms inhabit
diﬀerent value networks, at least until the day that their
disruptive innovation is able to invade the older value net-
work. At that time, the established ﬁrm in that network
can at best only fend oﬀ the market share attack with a
me-too entry, for which survival (not thriving) is the only
The work of Christensen and others during the 2000s has
addressed the question of what ﬁrms can do to avoid dis-
placement brought on by technological disruption.
1 History and usage of the term
The term disruptive technologies was coined by Clayton
M. Christensen and introduced in his 1995 article Dis-
ruptive Technologies: Catching the Wave,
which he co-
wrote with Joseph Bower. The article is aimed at man-
aging executives who make the funding/purchasing de-
cisions in companies rather than the research commu-
nity. He describes the term further in his book The In-
Innovator’s Dilemma explored the
cases of the disk drive industry (which, with its rapid gen-
erational change, is to the study of business what fruit
ﬂies are to the study of genetics, as Christensen was ad-
vised in the 1990s
) and the excavating equipment in-
dustry (where hydraulic actuation slowly displaced cable-
actuated movement). In his sequel with Michael E
Raynor, The Innovator’s Solution,
the term disruptive technology with disruptive innovation
because he recognized that few technologies are intrinsi-
cally disruptive or sustaining in character; rather, it is the
business model that the technology enables that creates
the disruptive impact. However, Christensen’s evolution
from a technological focus to a business modelling fo-
cus is central to understanding the evolution of business
at the market or industry level. Christensen and Mark
W. Johnson, who co-founded the management consult-
ing ﬁrm Innosight, described the dynamics of “business
model innovation” in the 2008 Harvard Business Review
article “Reinventing Your Business Model”.
cept of disruptive technology continues a long tradition
of the identiﬁcation of radical technical change in the
study of innovation by economists, and the development
of tools for its management at a ﬁrm or policy level.
In the late 1990s, the automotive sector began to embrace
a perspective of “constructive disruptive technology” by
working with a consultant David E. O’Ryan, whereby
the use of current oﬀ-the-shelf technology was integrated
with newer innovation to create what he called “an unfair
2 2 THE THEORY
advantage”. The process or technology change as a whole
had to be “constructive” in improving the current method
of manufacturing, yet disruptively impact the whole of
the business case model, resulting in a signiﬁcant reduc-
tion of waste, energy, materials, labor or legacy costs to
In keeping with the insight that what matters economi-
cally is the business model, not the technological sophis-
tication itself, Christensen’s theory explains why many
disruptive innovations are not “advanced technologies”,
which the technology mudslide hypothesis would lead one
to expect. Rather, they are often novel combinations of
existing oﬀ-the-shelf components, applied cleverly to a
small, ﬂedgling value network.
2 The theory
Christensen deﬁnes a disruptive innovation as a product
or service designed for a new set of customers.
“Generally, disruptive innovations were
technologically straightforward, consisting of
oﬀ-the-shelf components put together in a
product architecture that was often simpler
than prior approaches. They oﬀered less of
what customers in established markets wanted
and so could rarely be initially employed there.
They oﬀered a diﬀerent package of attributes
valued only in emerging markets remote from,
and unimportant to, the mainstream.”
Christensen argues that disruptive innovations can hurt
successful, well managed companies that are responsive
to their customers and have excellent research and de-
velopment. These companies tend to ignore the markets
most susceptible to disruptive innovations, because the
markets have very tight proﬁt margins and are too small
to provide a good growth rate to an established (sizable)
Thus, disruptive technology provides an exam-
ple of when the common business-world advice to "focus
on the customer" (“stay close to the customer,” “listen to
the customer”) can sometimes be strategically counter-
While Christensen argued that disruptive innovations can
hurt successful, well managed companies, O’Ryan coun-
tered that “constructive” integration of existing, new, and
forward thinking innovation could improve the economic
beneﬁts of these same well managed companies, once de-
cision making management understood the systemic ben-
eﬁts as a whole.
Christensen distinguishes between “low-end disruption"
which targets customers who do not need the full perfor-
mance valued by customers at the high end of the mar-
ket and “new-market disruption” which targets customers
who have needs that were previously unserved by existing
How low-end disruption occurs over time.
“Low-end disruption” occurs when the rate at which
products improve exceeds the rate at which customers can
adopt the new performance. Therefore, at some point the
performance of the product overshoots the needs of cer-
tain customer segments. At this point, a disruptive tech-
nology may enter the market and provide a product which
has lower performance than the incumbent but which ex-
ceeds the requirements of certain segments, thereby gain-
ing a foothold in the market.
In low-end disruption, the disruptor is focused initially on
serving the least proﬁtable customer, who is happy with a
good enough product. This type of customer is not willing
to pay premium for enhancements in product functional-
ity. Once the disruptor has gained a foothold in this cus-
tomer segment, it seeks to improve its proﬁt margin. To
get higher proﬁt margins, the disruptor needs to enter the
segment where the customer is willing to pay a little more
for higher quality. To ensure this quality in its product,
the disruptor needs to innovate. The incumbent will not
do much to retain its share in a not so proﬁtable segment,
and will move up-market and focus on its more attrac-
tive customers. After a number of such encounters, the
incumbent is squeezed into smaller markets than it was
previously serving. And then ﬁnally the disruptive tech-
nology meets the demands of the most proﬁtable segment
and drives the established company out of the market.
“New market disruption” occurs when a product ﬁts a new
or emerging market segment that is not being served by
existing incumbents in the industry.
The extrapolation of the theory to all aspects of life has
as has the methodology of relying on
selected case studies as the principal form of evidence.
Jill Lepore points out that some companies identiﬁed by
the theory as victims of disruption a decade or more ago,
rather than being defunct, remain dominant in their in-
dustries today (including Seagate Technology, U.S. Steel,
Lepore questions whether the theory
has been oversold and misapplied, as if it were able to
explain everything in every sphere of life, including not
just business but education and public institutions.
3 Disruptive technology
In 2009, Milan Zeleny described the high technology as
disruptive technology and raised the question what is be-
ing disrupted during this process. The answer, according
to Zeleny, is the support network of high technology.
For example, introducing electric cars disrupts the sup-
port network for gasoline cars (network of gas and service
stations). Such disruption is fully expected and therefore
eﬀectively resisted by support net owners. In the long run,
high (disruptive) technology either bypasses, upgrades or
replaces the outdated support network.
Technology, being a form of social relationship, always
evolves. No technology remains ﬁxed. Technology starts,
develops, persists, mutates, stagnates and declines – just
like living organisms.
The evolutionary life-cycle oc-
curs in the use and development of any technology. A
new high technology core emerges and challenges ex-
isting Technology Support Nets which are thus forced
to co-evolve with it. New versions of the core are be-
ing designed and ﬁtted into an increasingly appropriate
TSN, with smaller and smaller high-technology eﬀects.
High technology becomes just regular technology, with
more eﬃcient versions ﬁtting the same support net. Fi-
nally, even the eﬃciency gains diminish, emphasis shifts
to product tertiary attributes (appearance, style) and tech-
nology becomes TSN-preserving appropriate technology.
This technological equilibrium state becomes established
and ﬁxated, resisting being interrupted by a technological
mutation – new high technology appears and the cycle is
Regarding this evolving process of technology,
“The technological changes that damage
established companies are usually not radically
new or diﬃcult from a technological point of
view. They do, however, have two important
characteristics: First, they typically present a
diﬀerent package of performance attributes—
ones that, at least at the outset, are not val-
ued by existing customers. Second, the per-
formance attributes that existing customers do
value improve at such a rapid rate that the new
technology can later invade those established
explained the process of how disruptive
technology, through its requisite support net, dramatically
transforms a certain industry.
“When the technology that has the poten-
tial for revolutionizing an industry emerges,
established companies typically see it as
unattractive: it’s not something their main-
stream customers want, and its projected proﬁt
margins aren’t suﬃcient to cover big-company
cost structure. As a result, the new technol-
ogy tends to get ignored in favor of what’s cur-
rently popular with the best customers. But
then another company steps in to bring the in-
novation to a new market. Once the disruptive
technology becomes established there, smaller-
scale innovation rapidly raise the technology’s
performance on attributes that mainstream cus-
The automobile was high technology with respect to the
horse carriage; however, it evolved into technology and ﬁ-
nally into appropriate technology with a stable, unchang-
ing TSN. Main high-technology advance in the oﬃng is
some form of electric car – whether the energy source is
the sun, hydrogen, water, air pressure or traditional charg-
ing outlet. Electric cars preceded the gasoline automobile
by many decades and now it returns to people’s life to re-
place the traditional gasoline automobile.
Milan Zeleny described the above phenomenon.
also wrote that:
“Implementing high technology is often re-
sisted. This resistance is well understood on
the part of active participants in the requisite
TSN. The electric car will be resisted by gas-
station operators in the same way automated
teller machines (ATMs) were resisted by bank
tellers and automobiles by horsewhip makers.
Technology does not qualitatively restructure
the TSN and therefore will not be resisted and
never has been resisted. Middle management
resists business process reengineering because
BPR represents a direct assault on the sup-
port net (coordinative hierarchy) they thrive
on. Teamwork and multi-functionality is re-
sisted by those whose TSN provides the com-
fort of narrow specialization and command-
4 High-technology eﬀects
High technology is a technology core that changes the
very architecture (structure and organization) of the com-
ponents of the technology support net. High technol-
ogy therefore transforms the qualitative nature of tasks of
TSN and their relations, as well as their requisite physi-
cal, energy and information ﬂows. It also aﬀects the skills
required, the roles played, the styles of management and
coordination – the organizational culture itself.
This kind of technology core is diﬀerent from regular
technology core, which preserves the qualitative nature
of ﬂows and the structure of the support and only al-
lows users to perform the same tasks in the same way,
but faster, more reliably, in larger quantities, or more ef-
ﬁciently. It is also diﬀerent from appropriate technol-
4 8 NOTES
ogy core, which preserves the TSN itself with the pur-
pose of technology implementation and allows users to
do the same thing in the same way at comparable lev-
els of eﬃciency, instead of improving the eﬃciency of
Based on the framework, modern information and
knowledge-based technologies currently tend to be high
technologies with high-technology eﬀects. They inte-
grate task, labor and knowledge, transcend classical sep-
aration of mental and manual work, enhance systems
aspects, and promote self-reliance, self-service, innova-
tion and creativity.
In comparison, the “low” technolo-
gies, no matter how new, complex or advanced, are those
which still require the dividing and splintering of task, la-
bor and knowledge, increase specialization, promote di-
vision and dependency, sustain intermediaries and dimin-
As for the diﬀerence between high technology and low
technology, Milan Zeleny once said:
" The eﬀects of high technology always
breaks the direct comparability by changing
the system itself, therefore requiring new mea-
sures and new assessments of its productivity.
High technology cannot be compared and eval-
uated with the existing technology purely on
the basis of cost, net present value or return
on investment. Only within an unchanging and
relatively stable TSN would such direct ﬁnan-
cial comparability be meaningful. For exam-
ple, you can directly compare a manual type-
writer with an electric typewriter, but not a
typewriter with a word processor. Therein lays
the management challenge of high technology.
However, not all modern technologies are high technolo-
gies. They have to be used as high technologies, function
as such, and be embedded in their requisite TSNs. They
have to empower the individual because only through the
individual can they empower knowledge. Not all infor-
mation technologies have integrative eﬀects. Some in-
formation systems are still designed to improve the tra-
ditional hierarchy of command and thus preserve and
entrench the existing TSN. The administrative model of
management, for instance, further aggravates division of
task and labor, further specializes knowledge, and sepa-
rates management from workers and concentrates infor-
mation and knowledge in centers.
As knowledge surpasses capital, labor and raw materi-
als as the dominant economic resource, technologies are
also starting to reﬂect this shift. Technologies are rapidly
shifting from centralized hierarchies to distributed net-
works. Nowadays knowledge is not residing in a super-
mind, super-book or super-database, but a complex re-
lational pattern of networks brought forth to coordinate
5 Practical example of disruption
In the practical world, the popularization of personal
computers illustrates how the knowledge contributes to
the ongoing technology innovation. The original cen-
tralized concept (one computer, many persons) is a
knowledge-defying idea of the computing prehistory and
its inadequacies and failures have become clearly ap-
parent. The era of personal computing brought power-
ful computers “on every desk” (one person, one com-
puter). This short and transitional period was necessary
for getting used to the new computing environment, but
was inadequate from the knowledge-producing vantage
point. Adequate knowledge creation and management
come mainly from networking and distributed comput-
ing: one person, many computers. Each person’s com-
puter must form an access to the entire computing land-
scape or ecology through the Internet of other comput-
ers, databases, mainframes, as well as production, dis-
tribution and retailing facilities, etc. For the ﬁrst time
our technology empowers individuals rather than exter-
nal hierarchies. It transfers inﬂuence and power where it
optimally belongs: at the loci of the useful knowledge.
Even though hierarchies and bureaucracies do not inno-
vate, free and empowered individuals do; knowledge, in-
novation, spontaneity and self-reliance are becoming in-
creasingly valued and promoted.
6 Examples of disruptive innova-
7 See also
• Blue Ocean Strategy
• Creative destruction
• Killer application
• List of emerging technologies
• Paradigm shift
• Technology strategy
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olutionary” innovations as “discontinuous” “sustaining in-
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 Christensen 1997, p. 47.
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However the concept of new technologies leading to
wholesale economic change is not a new idea since Joseph
Schumpeter adapted the idea of creative destruction from
Karl Marx. Schumpeter (1949) in one of his examples
used “the railroadization of the Middle West as it was ini-
tiated by the Illinois Central”. He wrote, “The Illinois
Central not only meant very good business whilst it was
built and whilst new cities were built around it and land
was cultivated, but it spelled the death sentence for the
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• Danneels, Erwin (2004). “Disruptive Technology
Reconsidered: A Critique and Research Agenda”
(PDF). Journal of Product Innovation Manage-
ment 21 (4): 246–258. doi:10.1111/j.0737-
• Danneels, Erwin (2006). “From the Guest Edi-
tor: Dialogue on The Eﬀects of Disruptive Tech-
nology on Firms and Industries”. Journal of
Product Innovation Management 23 (1): 2–4.
• Roy, Raja (2014). “Exploring the Boundary Condi-
tions of Disruption: Large Firms and New Product
Introduction With a Potentially Disruptive Technol-
ogy in the Industrial Robotics Industry,” Engineer-
ing Management, IEEE Transactions on, vol.61,
no.1, pp. 90,100. http://ieeexplore.ieee.org/xpls/
11 External links
• Peer-reviewed chapter on Disruptive Innovation by
Clayton Christensen with public commentaries by
notable designers like Donald Norman
• The Myth of Disruptive Technologies. Note that
Dvorák’s deﬁnition of disruptive technology de-
scribes the low cost disruption model, above. He
reveals the overuse of the term and shows how many
disruptive technologies are not truly disruptive.
• “The Disruptive Potential of Game Technolo-
gies: Lessons Learned from its Impact on the
Military Simulation Industry”, by Roger Smith
in Research Technology Management (Septem-
• Disruptive Innovation Theory
• Bibliography of Christensen’s “Theory of Disruptive
Innovation” as it relates to higher education
• Disruptive Technology Portfolio by Information-
Week and Credit Suisse
• Diﬀusion of Innovations, Strategy and Innova-
tions The D.S.I Framework by Francisco Rodrigues
Gomes, Academia.edu share research
• CREATING THE FUTURE: Building Tomorrow’s
• Lecture (video), VoIP as an example of disruptive
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