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Understanding Disruptive

To fully understand disruption, we must first know from where this term came from. It was first used by Harvard Business School professor Clayton Christensen in 1995 to describe the transformation of business models and value networks by technology or business innovation.

Since then, we have seen an increasing number of article mentioning "disruptive innovation". However, despite growing commercial awareness, while only a handful of companies have successfully disrupted their own business models, thousands of firms failed to adapt in time and ended up either shadows of their former selves or out of business altogether.

It is increasingly evident that disruption does not stem solely from technology or business innovations. So, to begin the reflection on what causes disruption, we will assume three root causes behind it: technology, globalization and demographics.

Technology has been the main cause of disruption for centuries. This is true when we think about the Industrial Revolution and, in our lifetime, successive waves of IT revolution (PC, online, mobile, social). The next waves — the Internet of Things (IoT), virtual reality, AI, robotics — promise to be even more revolutionary.

Like technology, globalization is not new. Since the Age of Discovery and colonialism in the 15th century, it has accelerated in recent years, creating new competitors, reordering supply chains and lowering price points.

Migration and immigration will have profound impacts on workforces and economic development. Urbanization will increase cities' economic and public policy clout, even as it strains their ability to grow in sustainable ways. Aging populations will transform everything from health care to real estate. These demographic shifts will require new strategies and business models.

Business' response to disruption is perhaps the most important strategic imperative facing companies, because everyone is affected and it's easy to underestimate the pace of change. Today's leaders need to be aware of the game-changing threats and opportunities bubbling up in markets around the world. Organizations are typically structured and incentivized to focus on fulfilling the needs of their existing constituents — blinding them to disruptive opportunities, which often do not initially meet those needs.

Sectors are being redefined, as information technology lowers entry barriers and challenges driven by demographic change and globalization attract companies from far-flung sectors to develop innovative solutions.

As these new waves of technology, globalization and demographics interact, they give rise to a range of megatrends. Fortunately, as disruption becomes mainstream, organizations have become more proactive in addressing the challenge and exploring these megatrends in depth can give companies the power to understand a rapidly changing world and adapt accordingly.


Nobiletec is a multi-national consultancy firm specializes in B2B, B2C and P2P FinTech solutions.

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