Maybe you thought disruptive was bad. And disruptive, when you are disturbing things and people that shouldn’t be disturbed, is indeed bad. But it also turns out that a lot of people think that disruptive is very good, and it even seems that we are all either trying to be disrupters or are being disrupted.
So what is disruptive? Disruptive is defined in two ways: as causing or tending to cause disruption and, in business, a new product, service, or idea that radically changes an industry or business strategy by creating a new market and disrupting an existing one. Harvard business professor Clayton Christensen coined the term “disruptive innovation” in 1995 to describe innovations that literally create new markets and discover new customers.
Disruptive innovation can be new technology or a new business model that uses old technologies in new ways. One example is the affordable personal computer that created a new mass market, replacing the huge, expensive, mainframe computers that took up an entire room, used only by big companies and research universities.
Today, disruptive is everywhere. Entire industries are being reshaped with disruptive innovation. Think of Netflix that changed the rental of DVDs to streaming on-demand video, or making long-distance calls by phone to Skype, or buying music in stores to iTunes, or doing research in libraries to Google, or calling taxis on the street to the mobile app Uber, or getting news from print to Twitter.
Disruptive innovation can be new technology or a new business model that uses old technologies in new ways.
We book our own flights rather than with travel agents, we rent more rooms through Airbnb, a company that does not own or manage a single piece of property, than from the entire hotel industry combined, we shop for more goods on Amazon than in physical stores, and the list goes on. We are constantly being disrupted, in fact. And being disrupted more and more, and faster and faster.
And we are so used to being disrupted that we don’t resist it, in fact, we seek it and even celebrate getting disrupted. Dinner conversations and social gatherings often turn to the latest disruption and what we can do differently and better.
And not only are we as consumers buzzing with disruptive innovation, but it is also changing how we do business. Partly because of disruptive innovation, people change jobs faster and more radically, and the average job tenure of a CEO of a Fortune 500 company has been halved from ten years in 2000 to less than five years.
And the pace of change is likely to continue to increase, as the power and reach of the internet widens. There are entire websites, conferences, journal publications, and organizations focused on disruptive innovation, like CNBC’s annual list of the most disruptive companies, TechCrunch’s annual “festival of disruption” and, closer to home, Disrupt-Africa.com, which is, contrary to what it might appear to be, a web portal showcasing African startups.
So, is all of this disruptive innovation confined to only a small share of society that is modern in outlook, high-income,and internet-connected? Is the benefit of disruptive innovation mainly for those at the top layers of a developing society? And is the supply of disruptive innovation limited to those in the technologically and economically advanced world? Well, it turns out that the answers to all of these questions are largely and resoundingly no.
It appears, in fact, that, in any society, disruptive innovations usually find their first customers at the bottom of the market, that is, the broader mass of customers who likely did not have an established alternative that they were happy to continue using. Disruptive innovations are those providing something at low-cost and easily accessible to a large number of people who likely did not know they had a demand for it. And it seems that disruptive innovation is very much alive all over the developing world. And it does not only flow in one direction from North to South, or rich to poor.
Rather, disruptive innovations may start in an emerging market and spread to more advanced economies. This is all very good news.
My favorite example of a disruptive innovation that is spreading across the world is the mobile banking model of mPesa in Kenya that started with the simple concept of using airtime as currency to transfer money between people who were largely unbanked, in remote, rural places where banks had not yet established brick-and-mortar branches. Today, 60pc of Kenya’s economy goes through mPesa, with direct payments for things like electricity and water utility bills, monthly income taxes, and purchases of airline tickets and just about anything else on mPesa, with more bank accounts on mobile telephony than there are in physical banks. This is all very encouraging and very exciting.
Disruptive innovation is everywhere. More disruptive innovation comes out of small companies and entrepreneurs than it does out of big corporations. Some believe that, as the internet’s reach and globalization spreads, there will be more disruptive innovation in emerging markets than in Western economies, led by China and India. Think of Tata Swach, an eco-friendly, portable water purification system; the chotuKool, India’s portable, low-cost refrigerator that can be battery powered, or mPedigree, a mobile app developed in Ghana to check against fake or counterfeit medical drugs, among thousands of examples on a path to truly disruptive innovation, all over the developing world.
Do we need more disruptive innovation in Ethiopia?
Absolutely. Disruptive innovation is a tremendous force for transforming millions of lives and vital for achieving broad-based development, the kind of development we seek in Ethiopia. Disruptive innovation comes from two key elements: the provision of low-cost and easily-accessible products and services combined with demand from a lot of people, usually those without an alternative, willing to adopt those products and services.
As a society, we have to encourage and nurture and invest in creativity, risk-taking, original thinking,out-of-the-box ambitions, and failures along the way too, if we are going to be a society that fosters disruptive innovation, the kind of innovation that takes our economy to another level and changes our lives for the better.
In our new company, blueMoon (bluemoonethiopia.com), Ethiopia’s first youth agribusiness incubator, we are trying to find the sweet spot between youth, innovation, and agribusiness. We believe that this generation of Ethiopian youth,the products of the pasttwo decades of expandedsecondary and higher education and vocational training, is a youth that is socially-connected, global-minded, tech-savvy, entrepreneurial, and impatient for change.
This youth has what it takes to drive the disruptive innovation revolution that we need to see sweeping across our country, developing all sorts of low-cost and easily accessible agri-business products and services for a huge population of people at the bottom of the pyramid engaged along the value chains for agriculture, livestock, dairy, honey, fisheries, agro-forestry, and more.
We are excited to see what innovations emerge. We are betting on those between 15 and 29 years old, on their ideas, their hopes and dreams, and we are investing in their ambitions to aim high, to transform, to change Ethiopia and, yes! the world beyond. Let’s ring in disruptive this new year. We can all do this.
Disruptive innovation is everywhere.
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