2.1 Discontinuous innovation
Of course, this viewpoint runs counter to the strong tendency in contemporary societies to think of innovation only in terms of new products – which is an understandable trend given the scale and frequency with which the public are regularly bombarded with advertising for ‘stuff’, and particularly technological artefacts such as, ever ‘smarter’ phones, mini remote controlled drones, apps for just about everything, and many other forms of techie gadget. Yet arguably the greatest single innovation of the 20th century (and still as significant today) – the one which most changed society, the patterns of living and our economies – was not a new product but a process, a way of producing a product. Henry Ford’s production line for manufacturing automobiles made them affordable for the first time to people on moderate incomes. But it also had a profound impact on the way in which work within Ford’s factories was structured and carried out. In came the production line, with workers carrying out the same tasks, at a set speed, over and over for the duration of their shift.
The benefits (and costs) arising from Ford’s process innovation, obviously had a significant and lasting impact on the world for consumers and manufacturers and more widely. But there are, of course, many newer examples of technological innovations (and inventions) that have enabled more wide ranging process and organisational innovation – most obviously, the advent of the internet and World Wide Web.
These examples and many others of similar magnitude are frequently referred to as ‘discontinuous innovation’ in that they:
involve a fundamental change in an approach or technology. Every now and then a disruptive event occurs that changes markets, industries and even societies … Such world changing events give rise to a wave of discontinuous innovation across many industries. This has a destabilising – or disruptive – effect for established firms. (Together with management innovation, discontinuous innovation constitutes higher order innovation, which can be the source of lasting competitive advantage)
Clearly, both Ford and the internet are examples of discontinuous innovation. In practice, however, what most organisations and people experience are examples of innovation that are more incremental in nature and more limited in scope and scale. Nevertheless, as the quotation above indicates, it is discontinuous innovation that is the ‘game-changer’. It is worth noting, however, that evidence has existed for some years that demonstrates that organisations that are first to market with an innovative product or services are frequently less successful than those who follow on later (Rogers, 2003; Hippel, 2005). Why this arises is particularly important in a commercial setting, of course, and thus why some firms outperform others has been a long running subject of interest to researchers and commentators from a wide range of academic disciplines. Furthermore, in an age when it has become widely accepted that innovation is an important force in driving economic growth and creating various forms of value – as well as essential to the success or survival of any organisation, whether commercial or not – this issue takes on a far broader significance.