Disruptive Technologies

Lecture (8) Notes

(pg.1)

1. What is disruptive technology?

* Definition, Intro (Schumpeter).

* TB pg. 61 a briefing on Schumpeter and view against the classical

* 62- Schumpeter’s ‘normal healthy economy’ and consistency with Nikolai Kondratieff

(pg.2)

2. Some basic observations on how inventions and innovation occurs in industrial firms:

* (3 Forms of R&D) – Meaning and comparison

* Basic

* Applied

* Development

(pg.3)

3. Fitting the above three R&D types into evolving product life cycle curves:

* Figure 1

* Explanation for “S” shaped product life cycle curve

* Example of jump

* Figure 2

* Efficiency up & Cost down over time

(pg.4)

4. Complicating factors - lessons from the philosophy of science literature:

* Figure 3

* Popper (Smooth) vs Kuhn (step) Debate on tech progress

* Reason for diff – Period of normal science (status quo)

(pg.6)

5. Disruptive technologies in the modern era:

* Role of disruptive technology in promoting radical tech progress – concept popularized by Clayton Christensen (1997).

* Examples of disruptive techs

* In fig.3 – disruption occurs during normal science period.

(pg.7)

6. Institutional Inertia:

* Large firm domination (Monopoly/Oligopoly):

* Result of large capital/R&D investments

* Govt agencies protect large firms in the interests of their national economic competitive performance (eg.)

* Exert strong financial/political pressure (through donations)

* Enjoy status quo (eg.)

* Governments as instigators of tech progress:

* Ensure invention & innovation inhibiting monopoly power does not develop

* Regulations that encourage beneficial innovation (eg.)

* In circumstances - invest public capital to “demand” technical solutions (eg.)

(pg.8)

7. The Role of the Entrepreneur...