Disruptive Innovations Create Jobs, Efficiency Innovations Destroy

Every Disruptive Innovation Is Powered By A Simplifying Technology, And Then The Technology Has To Get Embedded In A Different Kind Of A Business Model. The First Two Decades Of Digital Computing Were Characterized By The Huge Mainframe Computers That Filled A Whole Room, And They Had To Be Operated By Phd Computer Scientists. It Took The Engineers At Ibm About Four Years To Design These Mainframe Computers Because There Were No Rules. It Was An Intuitive Art And Just By Trial And Error And Experimentation They Would Evolve To A Computer That Worked.

The Transformation At The Corporate Level Was Achieved By Selling Off Business Units In Old Markets And By Creating New Business Units To Pursue The New Opportunities. But The Individual Business Units Themselves Within Those Transformed Corporations Were Almost Inert To Change.

Justification For Infidelity And Dishonesty In All Their Manifestations Lies In The Marginal Cost Economics Of “just This Once.

By The Time It Becomes Obvious That A Technology Will Have Truly Disruptive Impact, It Is Often Too Late To Take Action. This Is One Reason Why We Are Such Advocates Of Using Theory To Try To Analyze Industry Change. Conclusive Evidence That Proves That A Company Needs To Take Action Almost Never Exists. In Fact, The Data Can Fool Management, Lulling Them Into A False Sense Of Security.

The Outsourcing Gurus Have Been Driving The Theory, And They Are Saying Everybody Ought Always To Do This. But It Is Really Contingent On Where You Are On The Spectrum From "not Good Enough" To "more Than Good Enough," Relative To Each Tier Of The Market.