The Technological basis of disruption

One of the main enablers of business model innovation is technology. The history of business is coloured with examples of disruptive technologies that were able to produce a profound impact on society and business world. For example, one can mention, the automobile, the locomotive, the semiconductor chip, the digital camera and the internet.

McKinsey identifies four characteristics of technologies that are likely to be associated with a disruption:

  1. Rapid rate of change in capabilities in terms of price/performance relative to substitutes and alternative approaches.
  2. Scope of impact is broad in terms of the number of industries and the range of machines, products and services.
  3. Potential to create massive economic impact in terms of, for example, profit pools that might be disrupted and additions to GDP.
  4. Potential to change the status quo in terms, for example, how people live and work or how societies develop comparative advantage.
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