Tuesday, December 22, 2015

When Does Disruptive Innovation cause Disruption?

There are various factors which help a path breaking innovation to be successfully adoptive. These factors can be categorized into Ecosystem, Maturity of Technology and Consumption behavior. Let us try to understand these a little bit.

Ecosystem: Some innovation need the support of various stakeholders. Even the stakeholders need to adopt to the change. They need to be supportive of the idea. For example for the e-commerce boom to happen the suppliers needed to comfortable in adopting the new business model. In its earlier wave in the early 2000 the e-commerce wave didn’t take off as the stakeholders were not geared up. They were not willing to spent and adopt such a radical shift. Today the suppliers are getting over their inhibitions and adopting the change. They are willing to experiment with new business models to expand their revenue streams.
Maturity of Technology: Sometimes technology is not mature enough to provide the required customer experience for mass adoption. Today e-commerce boom is largely supported by the ease of availability and speed of internet. Even mobile technology has become cheap and is good enough to increase the penetration of internet and supports the e-commerce boom. Advancement in the field of analytics also means the people can do interesting stuff with the data and information available.
Consumption Behavior: Consumer’s behavior takes time to change. Organizations must sustain this process by helping to bring in the change. The big question is how long customers will take time to change and if it makes economic sense to keep on investing in such a shift. Investors and firms are constantly trying to look for signs of change in consumption patterns. This helps them to spot early disruptive innovations. However the change in customer behavior depends on various socio economic factors.
Today e-commerce is in the cusp of the inflection point where in it is being supported by these factors.