UPDATED BY
Brennan Whitfield | Jan 24, 2024

Disruptive technology refers to innovation that upends traditional methods of industry, creating new markets that change the way consumers and companies operate. Like the first smartphone or today’s online streaming platforms, these goods and services introduce novel approaches, ideas or solutions that challenge the status quo. They hold the potential to completely overturn existing business models and entirely reshape industries.

What Is Disruptive Technology?

Disruptive technology refers to novel innovations that transform an industry’s landscape, either serving overlooked customers within existing markets or creating new markets entirely.

 

What Is Disruptive Technology?

Disruptive technology, or disruptive innovation, is any innovation that has significant impact on consumer, company and industry behavior, to the point of generating new markets, transforming conventional business operations and sometimes displacing established markets altogether. When a disruptive technology replaces an existing industry system or staple, this is due to it being considered as higher quality, more efficient or of greater value to customers than current innovations. Disruptive technology often emerges from risk-taking companies looking to target new markets and fulfill unmet needs within certain industries.

The term ‘disruptive technology’ was coined by professor Clayton Christensen in a 1995 Harvard Business Review article, identifying it as a strategy by which small startups could eventually displace major players by serving overlooked consumers and their needs. Once these entrants move upmarket and gain mainstream adoption, established companies must adapt to compete, or risk shuttering completely.

“Disruptive technologies bring about substantial change, rendering previous methods or technologies obsolete,” Iu Ayala Portella, CEO and founder at Gradient Insight, a data science consultancy that specializes in artificial intelligence, told Built In. “Incumbents often scramble to catch up, and new entrants emerge,” he said, noting that the shift in market leadership can lead to regulatory changes, ethical discussions and even prompt changes in consumer behavior.

Related ReadingIs Your Industry Primed for Disruption? Study Weak Signals to See It First.

 

10 Examples of Disruptive Technology 

Without going as far back as the wheel, the following list includes the latest innovations that are changing the game.
 

A breakdown of generative AI and what it does. | Video: Oracle

1. Generative AI

Generative AI is a type of artificial intelligence that uses generative models to create content. Using massive amounts of data, these machines learn how to generate new content — spanning text, images, audio and video — by way of complex algorithms and neural networks. By identifying patterns and structures from an existing data set, these systems are able to answer prompts inputted by a user, predicting one word or pixel at a time.

Why it’s disruptive: Generative AI bots create content, music, art, trade stocks and perform administrative tasks. Industries that rely on manual, time-consuming creative work — like graphic design or writing — may be under fire; however, computer programmers, research analysts, paralegals and financial traders aren’t exactly safe either.  Generative AI offers unprecedented levels of personalized content delivery and does so at scale with nearly instant turnaround times. Despite ethical concerns around authorship and originality, generative AI content has been embraced by global press organizations and used to train facial recognition technology.

Related ReadingAI as a Service Will Disrupt Everything. Is Your Business Ready?

 

An explanation of edge computing and how it works. | Video: Accenture

2. Edge Computing

Edge computing is a distributed computing framework that brings data processing and analysis closer to where it's generated, rather than relying solely on centralized cloud servers.

Why it’s disruptive: By processing data right at the “edge” (closer to where it’s needed), edge computing reduces latency, which is crucial for applications that operate in real-time, like autonomous vehicles and augmented reality. Edge computing has a wide reach, as it is applicable to any sector that handles data or data analysis.

For example, edge computing allows for real-time patient monitoring in healthcare, making data more immediate and accessible. In manufacturing, it improves automation and quality control by minimizing delays. It’s also playing a significant role in the development of smart cities, where it manages traffic, security, utilities and the distribution of energy in smart grids. In tandem with AI, edge computing enables the real-time processing required for tasks like facial recognition, language processing and object detection.

 

Virtual reality and mixed reality as demonstrated by the Meta Quest 3 headset. | Video: Meta Quest

3. Virtual, Augmented and Mixed Reality

While virtual reality is a fully immersive, computer-generated and interactive digital environment that simulates the experience of being in a totally different place, augmented reality simply overlays real-world surroundings with a sort of digital filter. And, as you may have guessed, mixed reality is a blend of the two. These digitized experiences are typically delivered through a device, like a wearable headset, glasses or smartphone, and have developed beyond the game room.

Why it’s disruptive: When training, these immersive tools can help healthcare professionals practice complex surgical procedures via a digital test run or foster empathy by virtually experiencing a patient’s symptoms. In retail, stores like IKEA and Sephora are using AR apps to help customers visualize furniture or test makeup virtually before making a purchase. This same tactic is being used in design, real estate and architecture, where clients may walk through digital, 3D models before breaking ground, and in education, bringing interactive textbooks and educational apps to life with immersive, virtual lessons and field trips that are more engaging, and can improve retention rates among students.

 

An overview of blockchain technology and how it works. | Video: Institute for the Future (IFTF)

4. Blockchain

Blockchain is a public, digital ledger that records transactions in a secure and transparent way, making it virtually tamper-proof. By using a peer-to-peer network, the decentralized system removes the need for intermediaries, like banks or notaries, and enables people to transact directly with one another. Blockchain is reimagining how data is stored, verified and transferred — making it a useful application across various industries.

Why it’s disruptive: In the financial sector, blockchain authenticates faster and cheaper cross-border payments while reducing the risk of fraud. And industries like supply chain management use blockchain to ensure validity and traceability of products, while the healthcare sector uses it to encrypt and safely transfer patients’ medical records and track the outbreak of diseases.

 

An introduction to Internet of Things (IoT) devices. | Video: GCFLearnFree

5. Internet of Things

The Internet of Things, or IoT, refers to a digitally connected network of smart devices. These items, like your Alexa or smart TV, are embedded with sensors, software and connectivity, which is how they collect and exchange data over the internet.

Why it’s disruptive: IoT’s role in transforming industries has to do with collecting, analyzing and utilizing data from a multitude of devices and sensors that fosters greater automation and efficiency. In agriculture, IoT redefines farming practices with smart sensors that monitor soil conditions, weather, and crop health, leading to more sustainable and productive farming. Smart cities use IoT to enhance urban planning, managing resources more efficiently, and improving public services, all while reducing the environmental footprint. And from healthcare with wearable devices and remote patient monitoring to logistics with real-time asset tracking, IoT is revolutionizing the way we live, work, and interact with our environment.

 

A demonstration of the Digit robot working in a warehouse. | Video: Agility Robotics

6. Robotics

Robotics is where engineering and science meet to design, construct and apply mechanical robots. These programmable machines are typically equipped with sensors, artificial intelligence and capable of autonomously carrying out tasks.

Why it’s disruptive: The power of robotics as a disruptive technology is in its ability to produce mechanized systems that can consistently and precisely perform dangerous tasks. Employing a robot in place of a human alleviates safety concerns, boosts productivity and efficiency while cutting labor costs.

Today, industrial robotics have stepped onto assembly lines while others assist in surgical operating rooms, making procedures more precise and less invasive. Robot bees have supplemented waning bee populations, helping pollinate crops and monitor hive health, while social robots aid social-emotional learning, provide customer service and general companionship. Other models explore space, offering a cheaper, safer and more efficient substitute to human-led missions.

 

An overview of green technology and how it's used. | Video: Simply Science

7. Green Tech

Green tech, short for green technology, is a diverse set of innovations and practices aiming to promote sustainability and reduce environmental impacts. Also known as cleantech, its goal is to curb or reverse the effects of human activity on the planet through things like carbon emission reduction, electric alternatives or responsible waste disposal.

Why it’s disruptive: Green tech, poised to surpass $61 billion by 2030, qualifies as a disruptor since it challenges established norms, unveiling new opportunities for business and industry as the byproduct of a transition to cleaner alternatives. The eco-conscious shift is supported by both a global demand for ethical consumption as well as a widespread regulatory framework combating climate change.

One example of green tech in action is in vertical farming, an indoor, tech-assisted alternative to farming that produces crops in a stacked fashion as to reduce water use or the need for vast tracts of land. While combating air pollution with zero tailpipe emissions, electric cars are agitating conventional automotive companies to figure out how to stay competitive as more resources pour into longer-lasting batteries and implementing charging infrastructure.

 

An explanation of 3D printing and how it works. | Video: Mashable

8. 3D Printing

3D printing is a process that uses specialized equipment to create physical objects from a digital file, one thin layer at a time. This additive manufacturing method provides a pathway to rapid and cost-effective prototyping, allowing designers and engineers to physically render one-of-a-kind concepts via computer-generated designs.

Why it’s disruptive: In the medical field, 3D printing has made custom prosthetics, implants and even organs a reality, enhancing patient care and outcomes. Industries like aerospace and automotive benefit from 3D printing's ability to craft lightweight and complex parts, improving fuel efficiency and performance. (It’s even built a rocket from scratch.) The food industry is testing out ways in which it can apply 3D printing for aesthetics, automation and sustainable purposes, while construction startups use this tech to build housing with little human oversight and in record times. At large, 3D printing is reshaping the manufacturing landscape, giving rise to decentralized and on-demand production, which reduces waste, lowers costs and undercuts traditional supply chain flows.

 

5G wireless technology use cases and how it works. | Video: CNET

9. 5G

5G, the fifth generation of wireless technology, is the latest standard for mobile communication and connectivity. It’s a leap forward in terms of data speeds, latency, network capacity and connectivity compared to its predecessor, 4G, performing 100 times faster on average and peaking at 20 gigabits per second. Being able to transmit data at incredibly high speeds, with low delays, means that more devices can connect to a network simultaneously without error.

Why it’s disruptive: This level of instantaneous connectivity will fundamentally change the way we communicate, both with each other and with technology, and set the stage for large-scale disruption across various sectors. In healthcare, 5G delivers fast and stable connections to support telemedicine, allowing doctors to perform remote surgeries and share medical data in real-time. Autonomous vehicles and smart cities rely on 5G’s low latency and high bandwidth to provide instantaneous communication between its sensors and the surrounding environment in order to execute urgent decision-making and respond to unpredictable circumstances or behaviors.

 

An overview of cloud computing and how 'as-a-service' models work in the cloud. | Video: Amazon Web Services

10. ‘As-a-service’ Models

‘As-a-service’ models refer to a paradigm shift in how products and services are delivered, where instead of traditional ownership, you access them on-demand, often through subscription-based or pay-as-you-go schemes. Cloud computing, connectivity and application programming interfaces — which allow different software systems to interact — make ‘as-a-service’ platforms possible.

Why it’s disruptive: No longer bogged down by closed systems and hardware, this disruptor creates ease and flexibility in the ways brands do business and how a customer experiences a product or service.

For example, in the software industry, software-as-a-service (SaaS) alters how businesses use and pay for software, reducing upfront costs and increasing accessibility. Other players in the tech sector now offer infrastructure-as-a-service (IaaS), where companies can outsource their IT infrastructure, alleviating data storage and cloud computing pain points. Platform-as-a-Service (PaaS) is another cloud-based service that lets developers focus on coding, while the platform manages the rest. Other iterations include data-as-a-service (DaaS), which leverages data sets for decision making, and knowledge-as-a-service (KaaS), which delivers data, information and experts on demand.

Related ReadingHow I Used Economic Theory at Spotify to Disrupt the Music Business

 

Advantages of Disruptive Technology

Disruptive technologies are often creative solutions to age-old problems. They’re smarter than what’s readily available and benefit both the company and consumer in the following ways.
 

1. Innovative

By definition, disruptive technologies change the game. The term is reserved for breakthrough products, services and solutions that fundamentally change the way in which one or several industries operate; take, for example, how we can gather information on the internet instead of from libraries or newspapers, or how we can watch shows on streaming services rather than cable television. 

 

2. Accessible

When undercutting existing markets, it’s important to launch a product or service that’s easily accessible to the masses. Attracting a sizable audience is a common feature of a disruptive tech, as they often hold cross-sectional appeal.

“[Disruptive technology] democratizes access to capabilities that were once exclusive, making advanced technology available to a broader audience,” Portella said. “This often involves reducing costs or simplifying complex processes.”

 

3. Efficient

If a product or service is enough to invert an industry for good, then it must be more than just a better mousetrap. Disruptive tech often involves automation, streamlined workflows, real-time capabilities and data-driven decision making, resulting in increased productivity and, oftentimes, new markets.

 

4. Affordable

Disruptive technologies sometimes devastate incumbents by offering high value products at low costs. When Google and Apple launched their respective maps apps at no cost to the user, a service that now comes preloaded on any smartphone or built into newer vehicle models, this was a devastating blow to stand-alone navigational systems, like the TomTom or Garmin devices.

 

Disadvantages of Disruptive Technology

Disruptive technology resets the standard and any new infrastructure is built around it. The downside to such drastic change, though, is that not everyone is equipped to make it through.
 

1. Uncertainty

It may take a while for certain innovations to be recognized as true disruptors, as the risk may not seem worth it in the beginning for early-round investors. It may even take decades. And, while some ideas may seem brilliant at first, even reaching mainstream status soon after launch, there is no guarantee it’ll last long. The next disruptor may be just around the corner.

“In my experience, skepticism is one of the most common events to unfold after a disruptive technology emerges,” said Cesar Johnston, CEO at Energous, a semiconductor company powering wireless IoT tech. After the skeptics are dealt with, the next hurdle is educating the market about your product and why it’s needed. “After that, one of two things can happen: acceptance or hesitation.”

 

2. Job Loss

As disruptors rise, sustaining technology and the businesses that back them may falter — in lieu of a successful pivot. Right now, the biggest threat is artificial intelligence. According to a global job loss report, United States-based employers cut 80,000 jobs in May 2023. Of that total, 4,000 of them were replaced by artificial intelligence.

And this may only be the tip of the iceberg. In a March 2023 report, investment firm Goldman Sachs predicted that generative AI has the potential to eliminate 300 million full-time jobs worldwide — about one-fourth of the entire workforce. 

 

3. Resistance to Change

Even if innovative technology seemingly hits all the right marks, it may still be faced with a wall of resistance barricading them from truly becoming a disruptor. Today, virtual and mixed reality systems are all the rage; however, early iterations of them, like Google Glass, flopped due to timing and steep price points, despite being poised as market disruptors.

“One major disadvantage of disruptive technologies is that adoption can be hindered by industries that have been accustomed to operating a certain way for the past decade or more,” Johnston said. “When certain industries are stagnant and do not evolve at the same rate as the rest of society, this can create a delay in new tech being created and incorporated.”

 

Frequently Asked Questions

What is disruptive technology?

Disruptive technology refers to novel innovations that serve overlooked customers within existing markets or create entirely new markets, which allows them to eventually displace established companies.

Why is disruptive technology good?

Disruptive technologies transform sectors, create new markets and more enjoyable user experiences. These novel goods and solutions challenge the status quo, and are accessible, affordable and efficient.

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