Disruptive Technology

Disruptive technology is an innovation that drastically changes how a market or industry operates.

Disruptive technology is an innovation that drastically changes how a market or industry operates. This type of technology creates entirely new markets by offering more affordable, accessible and convenient products and services. It can be used to create new markets, unseat traditional market leaders, and drive market disruption. Disruptive technologies are those that force companies and industries to change their existing business and operational models.

Not all new technologies are disruptive - in fact, many innovations can be incremental. This means they can enhance existing products or services, but they don’t create new markets or disrupt existing ones.

Examples of disruptive technology include smartphones, social media, and the internet of things. These have drastically changed how companies around the world operate, including those in the retail, healthcare, and entertainment industries. By connecting people and companies to each other, they have opened up entirely new markets.

In terms of investing, disruptive technologies are attractive for investors because they hold the potential to drive significant growth once they are implemented. Before investing in a disruptive technology, it is important to understand its overall potential and also potential risks in the following areas:

• Market maturity
• Competitiveness
• Technology readiness
• Regulatory framework

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A good example of a disruptive technology is the streaming service Netflix. Before the inception of Netflix, video rentals were a market dominated by many brick and mortar stores. Netflix fundamentally changed how consumers rented movies by bringing the services online. It enabled consumers to access the same services from home, and it was much more convenient and cost-effective for consumers.

Netflix's successful implementation of a disruptive technology led to its dominance in the market of online streaming video. It displaced traditional video rental stores and forced many to close their doors, and once dominant market players had to make drastic changes to their existing business models to remain competitive.