Disruptive technology, in business, refers to an innovation that has the potential to replace existing

technologies and systems. Such technology can drastically change market behavior, operations,
and social or economic norms, which is why they are disruptive. Common examples include block
chain disruptive technology, smartphones, IoT, etc.
Disruptive technologies can be said to be time-relative. Some technologies might be revolutionary
at some point in time, but at a later time, they might become the standard. Nevertheless, such
disruptive innovations are essential for businesses that try to hold or gain a significant market
share.

 Disruptive technology refers to any product or service innovation that can alter the market to a
great extent and bring revolutionary changes to consumer behavior and habits.
 Major disruptive innovations have always taken over the market. However, such innovations are
primarily associated with startups rather than established and reputed companies.
 It has many advantages and disadvantages for both customers and disruptive technology
companies. The main benefit is that it makes life easier for customers and helps increase
companies’ profits. The disadvantage is that it can be risky and subject to security and safety
concerns.

Internet banking was initially subject to many security concerns, and many people were reluctant to
use it. However, the norm has shifted to mobile banking, and many people have accepted it. But
perhaps the most recent of the lot is the blockchain disruptive technology. It has facilitated anonymous
transactions and formed the base for cryptocurrencies, another disruptive innovation during its launch.

Disruptive innovations are important because companies that do not adopt it will start losing the market
and eventually have to shut down their operations. Also, interestingly, most disruptive technology
companies are startups, which might be so because disruptive innovation can be a highly desirable
market entry method.

Example #1
Consider a hypothetical example of a tech startup, X. It partnered with a travel and
entertainment company, P, to develop virtual reality (VR) software that allows people to visit any
place around the globe in real time. VR is increasingly used for entertainment purposes – sports
and games, meeting people online, etc. As a result, the partnership between X and P was seen
as a disruptive innovation.
Example #2
Here’s recent news from Forbes regarding emerging disruptive technology and how employees
cope with it. Loss of jobs due to technology disruption is prevalent among middle-level
executives in companies. Automation, AI, IoT, etc., are some factors. But new studies show that
even top-level executives are now in fear of being replaced.

Advantages
Emerging disruptive technology makes the life of consumers easier. It makes daily tasks faster,
efficient and reduces the effort required. For example, online banking enables people to transfer
and receive money anytime. Some technologies even reduce the cost involved.

It can help companies profit, gain market share, and enhance customer loyalty. Especially
for startups, disruptive innovations can do business and increase their valuation. The producers
of existing tech can also take a moment and analyze measures to improve their products.
Disadvantages
The main disadvantage of disruptive innovation is that it might become controversial and have
security or safety concerns. For example, critics argue that VR technology might make it difficult
to differentiate between the real and virtual worlds. Another example is blockchain technology
which powers the dark web.

As for businesses, such innovations can also break a business. Introducing a whole new system
can be risky. And except for a few early adopters, the innovation might not be welcomed or have
a late pick-up. But by then, if it’s too late, the business would’ve already made a loss. Another
demerit is that there are fears of job losses due to disruption.

Advantages Disadvantages
Make life easier and more efficient Security or safety concerns
Help companies make a profit Can negatively affect existing businesses
Enhance customer loyalty Can be risky
Existing tech can introduce improvements Fear of job losses

Disruptive Technology vs Sustaining Technology

Before differentiating between disruptive and sustaining technologies, let’s first understand the
latter. Sustaining technology is employed by businesses that want to offer their highly-profitable
customers the best products or versions of existing products. The primary motivation behind this
is to earn higher profits and hence, a loyal customer base.
Sustaining innovation, thus, is aimed at customers who do not mind spending more for a better-
performing system, whereas disruptive innovations are aimed at the market as a whole. Again, it
is a section of early adopters who popularize an innovation.
Also, the business models of these two types of innovations are significantly different. The
sustaining technology is built on a high-profit and possibly high-cost model, while the disruptive
technologies are built on comparatively low-cost, low-profit models.

1. What are disruptive technology examples?

Popular disruptive innovations include the blockchain, the internet of things, internet and mobile
banking, artificial intelligence, voice assistants, etc. Since such technologies are time-relative,
even televisions and computers were disruptive when they were first introduced.

2. Why was the first smartphone considered a disruptive technology?

Smartphones are an excellent example of disruptive innovations, as they improve navigability,
accessibility, and connectivity to a level never imagined before. GPS, video communications, and
24X7 networking are some features that make the smartphone disruptive.

3. Why is the IoT considered a disruptive technology?

The IoT, or the internet of things, is a perfect disruptive innovation as it is changing dimensions
and crossing many technological borders. Therefore, it has wide applications and is especially
useful in virtual healthcare.

4. Is disruptive technology good or bad?

The nature of a disruptive technology depends on its applications and the attitude of its user. It
has many benefits, and its purpose is to make our lives easier. But at the same time, it is prone
to misuse and can be used in undesirable and unethical ways.