How can you assess the potential of a new technology to be a disruptive force?
Researchers Stoiciu et al examine disruptive technologies within the context of innovation management and how the theory of disruption first introduced by Christensen (1997) may apply to companies in practice.
The core objective of their paper is to provide a practical assessment framework that can be used to assess the potential for technologies to be disruptive. This framework was validated against five renewable energy technologies to provide an index for disruptiveness.
The assessment framework is underpinned by eleven disruptiveness criteria across six categories (A-F). These were developed from a combination of literature and consultation with energy experts.
Each technology being assessed is scored on a scale of 1-5 against every criterion, with 1 fully sustaining (innovative but not disruptive), 5 fully disruptive and 3 the disruptiveness threshold.
The scoring is semi-quantitative in nature, and is based on a combination of desk research and expert interviews to reduce subjectivity in the scoring. The overall degree of disruptiveness is calculated as an average of all the disruptive measurements, with all the criteria being equally weighted.
A. Market share development: the two factors of current and the future estimated market share (e.g. at 20 years) together provide an indication of scalability of the technology. The higher the scalability, the more likely the technology will be disruptive.
1. Current market share
2. Estimated market share
B. Value proposition: this provides an indication of the level of value latent in the technology. Disruptive technologies are expected to bring new value propositions to the market.
3. Superior value proposition
C. Costs: a comparison of initial and maintenance costs between the new technology and the existing alternative.
4. Initial costs
5. Maintenance costs
D. Time to market: this is a measure of the technology readiness. The closer the technology is to being fully commercial, the higher its potential to be disruptive.
6. Stage of development
E. Barriers: these provide a measure of the various obstacles that the technology and its adoption face. The higher these are, the less likely it is for the technology to become disruptive.
8. Economic and financial
9. Political and legal
10. Social barriers
F. Learning rate: this is measured by considering improvements in performance and costs savings (i.e. improved efficiency) through the years of the technology’s development.
11. Potential learning rate
While this framework was developed primarily for use with new energy technologies, the criteria applied would appear to be extensible to other industries and their new technologies.
The full version of this paper can be found at http://epub.wu.ac.at/4310/
(Assessing the Disruptiveness of New Energy Technologies – An Ex-Ante Perspective, Institute for Strategic Management, Energy & Strategy Think Tank, Stoiciu et al (2014))
Written by Dr Imoh Ilevbare for R&D Today
Product Manager (Innovation and Technology Management Services) at Institute for Manufacturing, University of Cambridge