13.7 INCREMENTAL VERSUS DISRUPTIVE INNOVATION

Innovation is often characterized as either incremental innovation or disruptive innovation. Incremental innovation has to do with improvements to a particular system, while disruptive innovation makes a system obsolete and replaces it with something better. An automobile electrical systems manufacturer may be seeking a lighter electrical conductor to help reduce the weight of a car and thus improve energy efficiency. Such an improvement is considered incremental innovation. On the other end of the spectrum, the Internet is a disruptive innovation, which changed such diverse industries as cable and broadcast television, telephones, newspapers, publishing, music, education, and all types of sales industries. To illustrate, the traditional “paper news” industry became largely obsolete due to the improved means of sourcing and distributing news via the Internet. The Internet disrupted the newspaper publishing business. The buggy whip business became obsolete when cars become the preferred means of transportation over the horse and buggy. The automobile was a disruptive innovation. The personal computer is a disruptive innovation.

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