Challenge of Discontinuous Innovation

Most of time innovation takes place within a set of rules of the game which are clearly understood and involves players trying to innovate by doing what they have been doing (product, process, position etc) but better. Some manage this more effectively than others but the rules of the game are accepted and do not change.

But occasionally something happens which dislocates this framework and changes the rules of the game. By definition these are not everyday events but they have the capacity to redefine the space and the boundary conditions – they open up new opportunities but also challenge existing players to reframe what they are doing in the light of new conditions. This is a central theme in Schumpeter’s original theory of innovation which he saw as involving a process of creative destruction.

What seems to happen be that a given set of technological and market conditions there is a long period of relative stability during which a continuous stream of variations around a basic innovation theme takes place. Essentially this is product / process improvement along the lines of doing what we do, but better. For example the Bicball point pen was originally developed in 1957 but remains a strong product with daily sales of 14 million units worldwide. Although superficially the same shape, closer inspection reveals a host of incremental changes that have taken place in materials, inks, technology, safety features etc.

These steady state innovation conditions are punctuated by occasional discontinuities and when these occur one or more of the basic conditions (technology market, social, regulatory etc) shifts dramatically. In the process the underlying rules of the game change and a new opportunity space for innovation opens up. Do different conditions of this kind occur, for example when a radical change takes place along the technological frontier or when completely new markets emerge. A merging example of this could be the replacement of the incandescent light bulb originally developed in the late nineteenth century by Edison and Swan (amongst others). This may be replaced by the sold state white light emitting diode technology patented by Nichia Channel Chemical. this technology is 85% more energy efficient has 16 times the life of a conventional bulb, is brighter, is more flexible in application and is likely to be subject to the sale economies associated with electronic component production .

In their pioneering work on this theme Abernathy and Utterback developed a model describing the pattern in terms of three distinct phases. Initially under discontinuous conditions, there is what the term a fluid phase during which there is high uncertainty along two dimensions:

1) The target what will the new configuration be and who will want it?
2) The technical — how will we harness new technological knowledge to create and deliver this.

No one knows what the right configuration of technological means and market needs will be and so there is extensive experimentation (accompanied by many failures) and fast learning by a range of players including many new entrepreneurial businesses.

Gradually these experiments begin to converge around what they call a dominant design – something which begins to set up the rules of the game. This represents a convergence around the most popular (importantly not necessarily the most technologically sophisticated or elegant) solution to the emerging configuration. At this point a bandwagon begins to roll and innovation options becomes increasingly channeled around a core set of possibilities is called as technological trajectory. It becomes increasingly difficult to explore outside this space because entrepreneurial interest and the resources which it brings increasingly focuses on possibilities within the dominant design corridor.