ICOMS 2018

Disruptive Innovation

Disruptive Innovation:
Current Trends and the Way Forward
(Keynote Speech of ICOMS 2018)

Punang Amaripuja, S.E., S.T., M.IT

Department of Management
Faculty of Economics and Business
Universitas Muhammadiyah Yogyakarta
p_amaripuja@yahoo.com
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Famous Incorrect Predictions

“The horse is here to stay, but the automobile is only a
novelty – a fad” The president of the Michigan Savings
Bank advising Henry Ford's lawyer, Horace Rackham, not to
invest in the Ford Motor Co., 1903

“The wireless music box has no imaginable commercial

value. Who would pay for a message sent to nobody in
particular?” Response of Associates of David Sarnoff, when
invited to invest in radio

Drill for oil? You mean drill into the ground to try and find
oil? You're crazy. --Drillers who Edwin L. Drake tried to enlist
to his project to drill for oil in 1859.
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“I think there is a market for about five computers.”

Thomas Watson, Sr. Founder of IBM, 1943

Computers in the future may weigh no more than 1.5

tons. --Popular Mechanics, forecasting the relentless
march of science, 1949
“There is no reason anyone would want a computer in
their home.” Ken Olsen, President and Founder of Digital
Equipment Corp., 1977

“640k ought to be enough for anybody”

Attributed to Bill Gates in 1981
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Why Are These Predictions Incorrect?

• People predict the future incorrectly because the “wrong”

answer makes sense at the time
– Watson could not have known about:
• Miniaturization
• Networking
• The Internet
• User friendly, graphical user interfaces
• Falling costs of computer components
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Why are Disruptions Overlooked?

Accelerating Growth in Technology

Technology’s progress is exponential, not linear

(quantum.mu)
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Types of Innovation
Innovation
Sustaining
Innovation which sustains an
existing product, market, and
value network
Disruptive
Innovation which prompts a
disruption towards current
existing products, market, and
value network, thus
subsequently replacing the
previous technology
(Christensen, 2013)
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Types of Innovative Technologies

• Sustaining – Steady, linear improvement of
existing technology
• Disruptive – Introduction of completely new
approaches that have the potential to create a
new industry or transform an existing one
– Revolutionary – radical innovations
• digital photography, microbots, high-temperature
superconductors
– Evolutionary – formed by the convergence of
previously separate research areas
• MRI imaging, faxing, electronic banking
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Sustaining vs. Disruptive Innovation

http://probitasreport.com/disruptive-innovation/
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Not all innovations are disruptive,

even if they are revolutionary
• Automobiles in the late 19th century were luxury
items and not a disruptive innovation

• Mass-produced automobile was a disruptive

innovation, because it changed the transportation
market, whereas the first thirty years of automobiles
did not.
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What is a Disruption?
• Disruptive innovation is an innovation that creates a new
market and value network and eventually disrupts an existing
market and value network, displacing established market
leading firms, products, and alliances. (Clayton M.
Christensen, 1997)
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Disruptions in the Past

• Automobiles
• Radio
• Telephone
• Television
• Computers
• Tablets
• Smartphones
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Electric
Cars
(1907)
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(politico.com)
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Elements of
Disruptive
Innovation

http://probitasreport.
com/disruptive-
innovation/
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The Disruptive Innovation Model

(Christensen, 1995)
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Characteristics of Disruptive Innovations

• Disruptive innovations tend to be produced by outsiders and

entrepreneurs, rather than existing market-leading
companies.
– The business environment of market leaders does not allow them to pursue
disruptive innovations when they first arise
• A disruptive process can take longer to develop than by the
conventional approach and the risk associated to it is higher
than the other more incremental or evolutionary forms of
innovations
• Once it is deployed in the market, it achieves a much faster
penetration and higher degree of impact on the established
markets
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Stages of Disruptive Innovation:

Explosion of
Divided
Disruptive disruptive
opinions
Emergence technology innovation
between
of disruptive starts to gain and
industry
technology consumer’s naturally
player and
acceptance replacing its
companies
predecessor

(Christensen, 2013)

Not all disruptive technologies automatically

becomes disruptive innovations

At every stage, there is a risk of failure

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Emerging technologies
with disruptive ability

(Rahman, 2017)
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Emerging Disruptive Technologies

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Advancements in
Information Technology
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Google Glass
Google Glass is a wearable
computer with an optical
head-mounted display
(OHMD) that is being
developed by Google in the
Project Glass research and
development project, with
a mission of producing a
mass-market ubiquitous
computer. Google Glass
displays information in a
smartphone-like hands-free
format, that can
communicate with the
Internet via natural
language voice commands.
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AerScreen

AerScreen is an innovative display screen unlike

any other type of display. Our screen is
comprised of only air and water particles, which
produce a translucent screen flowing in mid air.
A display screen that you could touch and
interact with. Check out the video below for an
example of what you can do.
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Knightscope K5 Autonomous Data Machine

Predict and Prevent Crime in Your
Community

• The Knightscope K5 Autonomous Data Machine utilizes a combination of autonomous robots and predictive analytics to provide a commanding but
friendly physical presence while gathering important real-time on-site data with numerous sensors.
Data collected through these sensors is processed through our predictive analytics engine, combined with existing business, government and
crowdsourced social data sets, and subsequently assigned an alert level that determines when the community and the authorities should be notified
of a concern.
If an alert is pushed, the K5 machine will turn on all of its sensors to allow the entire community to review everything and also contribute important
real-time information. Our approach alleviates any privacy concerns, engages the community on a social level to effectively crowdsource security,
and provides an important feedback loop to the prediction engine.
• Knightscope's Mission - Cut Crime by 50%
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• Prime Air is Amazon’s

new delivery system
with the goal to get
packages into
customers' hands in 30
minutes or less using
unmanned aerial
vehicles.
• Putting Prime Air into
commercial use will
take some number of
years as we advance the
technology and wait for
the necessary FAA rules
and regulations.
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3D Printing
3D printing or Additive
manufacturing is a process
of making a three-
dimensional solid object of
virtually any shape from a
digital model. 3D printing is
achieved using an additive
process, where successive
layers of material are laid
down in different shapes.
3D printing is considered
distinct from traditional
machining techniques,
which mostly rely on the
removal of material by
methods such as cutting or
drilling (subtractive
processes).
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Artificial Intelligence
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Advancements in
Healthcare Technology
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Medicine
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Google announces 'smart' contact

lenses that monitor glucose levels

• Google is testing a prototype for a contact lens that would help people with diabetes manage
their disease.
• The lens would measure glucose in tears continuously using a wireless chip and miniaturized
glucose sensor. The chip and sensor would be embedded between two layers of soft contact
lens material, while a pinhole in the lens would allow fluid from the surface of the eye to
seep into the sensor.
• Google says that using the lenses would be a less invasive method of measuring glucose
levels than finger-pricking. It also claims that the more frequent testing would consequently
reduce the risks associated with infrequent glucose testing such as kidney failure and
blindness.
• http://www.foxnews.com/tech/2014/01/16/google-announces-contact-lens-glucose-monitor/
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Bioprinting

• Sangeeta Bhatia from MIT, together with Jennifer West from Rice University, bioprinted living 3D
liver construct using stereolithography.
• Tsinghua University group in China printed liver construct using chitosan-collagen hydrogel.
• Forgacs' group at the University of Missouri printed branched segment of branched vascular tree.
• Group at Cornell University bioprinted living cartilage construct.
• Scanners and printers can be used to bioprint new skin directly on wounds or simply just create
organs on-demand.
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Transportation
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Hyperloop
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Hyperloop in Figures
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www.ibisworld.com
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Underground
Roads
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Space
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Space Transportation
• New technologies developed by Private Companies (Elon
Musk’s SpaceX , Jeff Bezos’ Blue Origin)
– Reusable rocket booster, self landing
– More frequent launches
• Cost is targeted to be 90% cheaper than current
technology
• Opens the door for deep space exploration and space
mining
• SpaceX aims to go to Mars 2022 (cargo) and 2024 (crewed)
to make humans a multi-planetary species. In the
meantime, the BFF rocket may also be used for inter-
continental travel.
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Intercontinental
Rocket Flights
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Space
Business
Opportunities
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Impact on Businesses
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Impact of Disruption on Businesses

Pratikno (2018). University 5.0: Powerful Agile Learner.

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Disruptive Innovation in Financial Services

(World Economic Forum, in

www2.deloitte.com)
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Impact on the Workforce

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Largest JOBS GAINED

Impact on in Trade (retail and
Existing wholesale) 12.8%

Jobs

Largest JOBS LOST in

Agriculture (55.9%)

(US Bureau of Labor Statistics, 2017 in

Pratikno, 2018))
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Impact on Existing Jobs

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Impact on
Existing
Jobs

Lost jobs due to

Automation in
Indonesia: 12.5%

(McKinsey Global Institute Analysis, 2017)

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WEF (2016). The Future of Jobs

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Probability Robots and AI Will Take Your Job

in the Next 20 Years, 1 = Certain
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Impact on Education
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Future of Learning

• Companies accept diverse forms of credentials

and certificate
• Work requirements will change so rapidly that
continuous career readiness becomes the norm
• Schools will take many forms, sometimes self-
organized
• Learning will no longer be determined by time
and space
• Learners will create individual learning playlist
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Massive Open Online Course (MOOCs)

• Coursera is the biggest provider in terms of enrollments, with 30 million in 2017, followed by edX
with 14 million, China's XuetangX with 9.3 million, Udacity with nine million and FutureLearn with
7.1 million.
• The number of massive open online courses being offered rose to 9,400, up from 6,850 in 2016.
About 800 universities contributed at least one MOOC last year.
• The most popular subjects for MOOCs in 2017 were technology and business, followed by the social
sciences, science and the humanities
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Personalized Education

(Pratikno, 2018)