Innovating for Sustainability Transitions: Disruptive Innovation or Discontinuous Innovation?

Disruptive innovation has become a chewing gum in the mouths of the CEOs of small and big companies. Everyone wants to be a “disruptor” regardless of their market positioning or innovation approach. Unfortunately, disruptive innovation has also become a buzzword haunting the theoretical, practice-relevant and practical work of design and innovation academics who can be broadly placed in the field of system innovations and transitions for sustainability. I am not intending to argue against the general usefulness and relevance of the term within the mainstream management theory and practice. Instead I’d like to argue against its use in the context of system innovations and transitions for sustainability and propose that we use “discontinuous innovation” instead. The following paragraphs have a go at why.

The term “disruptive innovation” was coined by Clayton Christensen in his seminal book “The Innovator’s Dilemma” in 1997 (Christensen, 1997). Hoping to avoid any injustice to the intricacies of his theory, my simplified understanding of Christensen’s use of disruptive innovation puts emphasis on business model innovation (i.e. organizational innovation) by adoption and use of new technologies for offering new products/services that’ll meet the anticipated needs of users instead of focusing on meeting the current needs as an innovation strategy. This we understand as design researchers and practitioners very well albeit implement only occasionally. One could argue even, the whole premise of the non-diluted version of design thinking movement is based on this approach to innovation. If you’re not inclined to read Christensens book but would like to develop your understanding based on primary source, Harvard Business Review has an article in this month’s issue (Christensen, Raynor &McDonald, 2015) (in which the authors complain about the misuse of the term and how it has been made meaningless – just like what happened to “sustainability” and “resilience in the hands of greenwashers and whitewashers).

The theory of disruptive innovation is very relevant to system innovations and transitions as it explains how niche innovations can become successful and take over the incumbents (at least within the dominant economic paradigm). Nevertheless, the emphasis is on single companies and the “disruption” is not necessarily disruption at the level of socio-technical systems. The chances of a particular disruptive innovation being a significant factor –a core cause- in systemic transformations at the level of socio-technical systems is low, although, considered within the dynamics of a socio-technical system, one disruptive innovation may trigger a series of changes over time that could eventually add up to a systemic transformation. Disruptive innovation theory is somewhat congruous to the multi-level model of system innovation and these two could be integrated for a better leveraging of the niche-level. I’ll leave thinking of potential alignments of two theories to another time and move on.

Discontinuous innovation, although also a management buzzword, hasn’t made the mark disruptive innovation has, perhaps because no Harvard professor has yet written a book about it. According to the “lexicon” of the Financial Times, discontinuous innovation and radical innovation are synonymous and point to: “a paradigm shift in science or technology and/or the market structure of an industry”. Garcia and Calantone (2002), on the other hand, provide a more nuanced explanation and articulate that discontinuous innovations may be radical innovations or really new innovations depending on which level they influence (firm and the customer, i.e. micro, or the world or whole industry and market, i.e. macro) and whether they affect marketing or technology S-curves or both. According to them, radical innovations create discontinuity both at micro- and at macro-levels as well as embody new technologies and create new markets. On the other hand really new innovations create either technological or marketing discontinuity at macro- level and at micro-level they may create either or both (see table below). So, in this typology, the most common yet least acknowledged type of innovation –really new innovation- becomes visible and better articulated in terms of discontinuity.

Garcia_et_al-2002-Journal_of_Product_Innovation_Management

From Garcia and Calantone (2002, p. 121)

Nevertheless, the problem with innovation typologies developed in management and engineering disciplines perceives the world of innovation to consist of two dynamics, i.e. market and technology, and as only taking place in firms. When we talk about system innovations and transitions on the other hand, we include innovations in socio-cultural and politico-organisational contexts (i.e. individual and group behavior, business model, governance model, institutional set-up) and several other actors in addition to firms. Therefore, framing discontinuity in system innovations with a narrow set of parameters and with references to only one actor is not sufficient, however, the strength of the concept of discontinuous innovation as understood in mainstream theory comes from its acknowledgement of the contextual changes that an innovation may create in addition to changes within the organizational boundaries where the innovation took place. For this reason, discontinuous innovation as a concept is more promising in terms of being able to take into account the complex dynamics of socio-technical systems.

Another reason for discontinuous innovation to be the preferred term in the context of system innovations and transitions is the implicational alignment of the concept of discontinuity with the required level of change for socio-technical systems to become sustainable (which is often referred to as “radical”) and the methodologies used in identifying the practical interventions necessary (mostly visioning and scenario development work to identify policy development and/or R&D investment requirements). I am hoping to write another post on creating imaginaries of discontinuities using these futures inquiry approaches in the near future.

References I cited in this post:

Christensen, C. M. (1997). The innovator’s dilemma: when new technologies cause great firms to fail. Boston, Mass.: Harvard Business School Press.

Christensen, C. M., Raynor, M., & McDonald, R. (2015). What is disruptive innovation? Harvard Business Review, 93(12), 44-53.

Garcia, R., & Calantone, R. (2002). A critical look at technological innovation typology and innovativeness terminology: a literature review. Journal of Product Innovation Management, 19(2), 110-132. doi: 10.1111/1540-5885.1920110