Disruptive Technology: Definition, Pros vs. Cons and Examples

By Indeed Editorial Team

July 30, 2021

Disruptive technology is a term that applies to gadgets, electronics, services and concepts that have a major impact on their respective industries, ultimately changing them in irreversible ways.

Working with disruptive technology, businesses can often establish themselves in new markets or take advantage of the opportunity to displace big companies in an established landscape. Understanding how this type of technology influences industries is important. In this article, we explore what disruptive technology is, its benefits and major examples of disruptive technology.

What is disruptive technology?

Disruptive technology is any innovation that dramatically changes the way consumers, businesses and industries operate. When they're first developed, disruptive technologies often create a new market. They establish their own value network and are often seen as risky outliers when they're introduced.

In other cases, disruptive technologies enter an established market but radically change the way business is handled and needs are met. These technologies completely replace their predecessors by offering revolutionary benefits that are notably superior. When a disruptive technology enters an existing market, it can make current items or processes obsolete.

Examples of disruptive technology

Here are a few examples of disruptive technologies:

Artificial intelligence

Artificial intelligence is a technology that allows computers to problem solve and reason in the same ways that humans do. Examples of Artificial Intelligence include:

  • Robots

  • Self-driving cars

  • Home assistants

  • Chatbots found on retail sites

  • Digital travel agents

3D Printing

3D printing is used in several industries—primarily the medical and aeronautical fields— and is the process of creating three dimensional objects from a non-three dimension source, such as a digital source. Objects are created layer by layer in this process and this allows people to print unusual shapes with fewer materials.

Blockchain

Bitcoin and cryptocurrency are examples of currency that are exchanged in digital ledger transactions through what is called a blockchain service. While this process is still evolving and hasn’t quite reached the masses yet, it’s considered a disruptive technology that is changing the ecommerce industry. It’s important because it involves a cashless system that will change how we exchange money.

Smartphones

Smartphones have replaced landlines, traditional cell phones and even computers for many people. As new apps become available, smartphones increase their functionality, disrupting other industries as well. A smartphone can act as a GPS, radio, television, e-reader (which itself replaced printed materials), camera, remote control and more.

E-commerce

E-commerce makes nearly any product accessible via the internet. Shoppers no longer have to leave their homes and shop at brick and mortar stores and startup companies don't need physical retail locations to sell their products. E-commerce disrupted the retail industry by making it possible to shop online and receive anything from shoes to produce in a matter of days or even hours.

Ride-sharing apps

With the advent of ride-sharing apps, customers can now order transportation from individuals rather than a taxi cab company. Customers use an app to arrange where and when they’d like to be picked up. Ride-sharing changed the industry, both for the consumer and the driver, who can now work independently for ride-sharing companies, setting their own hours and choosing jobs.

GPS systems

Global Positioning Systems (GPS) have replaced paper maps. Drivers once had to consult paper maps to find their location if they were lost. Modern GPS technology can find users instantaneously by satellite and provide route choices for their destinations. With convenient, turn-by-turn directions, and rerouting options for traffic and road obstacles, the driver is able to focus on driving.

Social media networks

Social media networking disrupted traditional social interactions in numerous ways. It made it possible for people to see what friends were doing, without having to call, email or text them. With the ability to check in on friends without actually speaking to them, some chances for deeper connections were lost. Social media networking has influenced not only, personal interactions; but also, those that take place with businesses as well.

Streaming entertainment

With the invention of streaming entertainment, cable networks and local programming are no longer necessary for viewers to watch their favorite television series. Consumers don't need to purchase or rent DVDs or Blu-rays to see the latest movies at home. Some films are even available to stream while still in the theater, so customers can stay home and stream them.

When is something considered a disruptive technology?

To be considered disruptive, technology must be easily accessed by a majority of the population. Revolutionary inventions are often not disruptive because they're too expensive for the common consumer. In many cases, it's not until the technology is refined enough to become affordable that it's considered disruptive to the market. A disruptive technology is one that enters the mainstream and changes the way most people think or behave.

An example of disruptive technology would be the personal computer. When it was first introduced it was too expensive for the typical consumer to afford. However, as technology advanced, computers became more affordable, more efficient and less expensive to produce, so therefore the price point dropped and computers became more affordable to a greater percentage of the population.

How is disruptive technology different from sustaining technology?

Most technology is considered sustaining rather than disruptive. Sustaining technology evolves slowly and steadily over time. Established businesses typically work with sustaining technologies that allow them to refine their production methods and corner a known market. However, over time a disruptive technology can become a sustaining technology as it becomes firmly established.

Here are some examples of sustaining technologies:

  • smart phones

  • smart TVs

  • personal computers

  • home assistants

Advantages of disruptive technology

Disruptive technology offers many distinctive advantages to both consumers and companies including:

Innovative benefits

One of the key features of disruptive technology is its ability to offer consumers new and notable benefits. When this type of technology enters the marketplace, it changes the entire industry. The internet disrupted previous ways of gathering information, such as libraries, newspapers and even social interactions.

It also revolutionized the way that individuals could perform research. By embracing disruptive technology, individuals and businesses alike can enjoy the benefits that the technology offers to their regular activities.

Startup opportunities

Disruptive technology provides opportunities for startup companies to gain a significant foothold in existing industries. Those who begin offering the new technology early can establish themselves as thought leaders in a fresh market.

This provides a unique chance for small startups to experience rapid growth and potentially outperform larger, more well-established companies.

Related: What Is a Startup? Everything You Need To Know About Startups

Room for business growth

When an established business willingly embraces disruptive technology, it enjoys prime opportunities for growth either within its current industry or within a new industry that's been created by the technology.

Companies that can smoothly incorporate disruptive technology in their existing line of products and services can help existing customers transition into using the disruptive technology while also capturing new buyers with their entry into the fresh market.

Disadvantages of disruptive technology

While disruptive technologies are largely beneficial once they're well established, they can create some challenges in their early stages including:

Unrefined inventions

New technology is typically untested and unrefined during its early stages and development can continue for years. During this time, businesses offering the technology may struggle to market an innovative product. The earliest users of disruptive technology may find themselves working with clunky prototypes that don't yet offer the sleek refinement that's presented in later stages of development.

Early performance problems

Nearly all innovations go through a period of problem-solving. Modern consumers are accustomed to experiencing this with a newly developed app or piece of software. Updates and patches are necessary to overcome the glitches and other challenges that the technology might present. The same process applies to any disruptive technology and can make early adoption more challenging.

Related: 15 Things To Know About What It’s Like To Work in Tech

Unproven applications

It can take time for a disruptive technology to find its place in the marketplace. The potential applications for the innovation are at first unproven. Users may doubt whether they can use the product to replace its predecessors. For example, when small kitchen appliances were first made available, cooks may have doubted whether electric mixers could deliver the same quality as their own skilled hands.

They were also unaware of the countless applications for these products, which have since become a staple in most homes, eliminating the need for a professional hand and hours to produce quality homemade meals.

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