In 1997, Clayton Christensen, an influential management thinker, introduced the theory of disruption and coined the term disruptive innovation. He defines it as a process whereby a small company with few resources successfully challenges a larger established incumbent business or invents entirely new markets.

According to Clayton, Netflix is a good example of a technological disruptor. The streaming giant with humble beginnings acknowledged the internet as a disruptive force and started by reaching out to traditional studios and networks to license their old content. Today, it creates its own content with the most respectable actors, directors and producers in the industry, competing with established and legacy movie studios.

The fear of disruption

For established businesses, disruption can either be embraced as an opportunity or it can be seen as a destructive shift that threatens the very existence of the company. If one had to gauge an overall mood surrounding disruptive innovation, whether in a social circle or around a board room table, it would be that of speculation and suspicion. A report by Accenture states that while 93% of executives say they know their industry will be disrupted at some point in the next 5 years, only 20% feel they’re prepared to address it.

However, this techno-panic around new technologies and innovations that question the survival of businesses across industries is far from being a modern phenomenon. In fact, the nervousness of new goes back as far as the 14th century when printed books democratised information. By inventing the printing press, Gutenberg revolutionised the way people consumed information. This made the Church uncomfortable as they felt that the distribution of scripture to the masses, which prior to the printing press was only accessible to the privileged few, would distort or dilute the word of God.

 “To help men and women be literate, to give them knowledge, to make books so cheap even a peasant might afford them. That is my hope, yes”. 

— Gutenberg

History of disruption at a glance

History of technological revolutions depict the regularity at which disruptions make way for new or redefined industries. A book by Carlota Perez — Technological Revolutions and Financial Capital: The Dynamics of Bubble and Golden Ages, talks about how economies react to technological revolutions in predictable ways. In her blog, she outlines various technological revolutions and the subsequent impact on industries:

1771: The Industrial revolution in Britain gave way to a mechanised cotton industry, wrought iron and machinery. Mechanised loom created quite the riot upon its arrival as it reduced the demand for skilled hand-weavers.

1829: The second tech revolution started with the invention of the steam engine. Steam power was used in many industries and the construction of a robust railway system made way for telegraphs. Despite the railway’s potential to raise the standard of living in Britain, several opponents blamed the railways for ruining and desecrating natural landscapes.

1875: The age of steel, electricity and heavy engineering led to an electrical equipment industry, copper and cables, canned and bottled food and also created a paper and packaging industry.

1908: The fourth technological revolution created automobiles that could be mass-produced. In fact, it was in this phase when mass-production was adopted by various industries including home electrical appliances and frozen foods.

1971: The age of information and telecommunications made computers, software and microelectronics cheap and accessible. According to Perez, the first commercially available microprocessor was “the big bang of a new universe of all pervasive computing and digital communications.”.

If you look closely, a strong pattern can be traced throughout these technological revolutions. Each of them met with resistance and generated what we today call techno-panic. Loss of jobs and changing social dynamics were consistent fears. But more importantly, each innovation made previously expensive or exclusive technologies accessible and affordable.

Current state of disruptive forces

The pace of change has accelerated, even more so in 2018. Disruptive technologies such as AI, augmented reality, machine learning and IOT are closing in on traditional businesses. A recent Forbes Insights/data survey reported that one-third of executives are directly affected by competition from digital and data-savvy players in the market.

Indeed, disruption is not just a buzzword, but a reality. Robots as co-workers on factory floors, computer-assisted diagnoses in healthcare and systems that decide which lead is worthy for a salesperson’s time are just some examples of how AI can redefine several industries.

Another innovation with the potential to disrupt is 3D printing. Using additive manufacturing techniques, 3D printing can deliver speed, precision and capacity to create more complex products in larger volumes.

IoT is driving disruption in our very homes by giving us access to smart devices which change the way we use lights around the house, watch TV or exercise.

As Steve Denning, author of The Age of Agile, puts it, the disruptions caused by new technology are larger and longer lasting than previous disruptors like railroads, steel and the like. So, how does our technological past help businesses navigate the disruptive forces surrounding them?

Harness the power of disruption

As the Cutter Business Technology Journal suggests, to achieve digital transformation, businesses need to understand and visualise the current state and the desired future state. Studies have shown that disruption follows a pattern. Disruptors are simply releasing new forms of value — value that was ready to be unlocked as a result of technological progress, combined with external changes. Once you dissect disruption into its key components, you can address its risks with confidence and enable business growth.

An analysis by Accenture gets under the surface of disruption and shares insights devoid of any speculation or wariness associated with disruptive technologies. Accenture’s thought leadership in disruptive technologies has helped many businesses understand disruption better. By capturing critical information and knowledge of how leading companies harness the power of disruption, Accenture provides a sound strategy for a seamless digital transition. To understand disruption and take advantage of the opportunities it provides, visit www.accenture.com.

This article was produced by the Scroll marketing team on behalf of Accenture and not by the Scroll editorial team.