New tech has the power to "disrupt" the status quo, changing the way we live our lives. But how is disruptive technology affecting us right now? And is breaking the mould always a good thing? Adam Oxford investigates
"I am always writing about the period we"re in, and sometimes I"m telling people things they don"t want to hear,” scriptwriter Matthew Weiner recently told The Atlantic magazine. “The economy, the internet - all these things are isolating us and making us feel defeated. Our national culture feels defeated, our exceptionalism.”
Weiner is the creator of one of TV"s most successful shows about the workplace, Mad Men. The show is set in the hard-drinking, chain-smoking, very non-PC world of a 1960s advertising agency based on New York"s Madison Avenue. A large part of its appeal is that it"s the story of a time when things seemed more predictable and stable than they do for the current generation. After the period in which Mad Men was set, the workplace began to change fast, and Weiner says that the subtext of the show is really “present-day angst” about the disruptive technologies that have transformed work and society in recent times.
It is, after all, less than three decades since the internet went mainstream and turned over tried and tested business models - from how to send a letter to how to break the news. These days, a child under the age of 10 living in a developed country may never watch broadcast TV or pick up an encyclopedia.
The phrase "disruptive innovation" was coined in 1995 by Professor Clayton M Christensen of the Harvard Business School, who described it as the process of creating entirely new markets and sets of customers. He emphasised that while new technologies have a role to play, it"s the business models of disruptive firms that are important, and often they emerge from market niches thought too small to be of value to established firms.
Who would have thought, for example, that a company that developed a niche algorithm for searching databases would go on to become the most valuable - and arguably most powerful - in the world? Or that a website for organising student parties would become the de facto method for 1.32 billion people a month to stay in touch with their families and friends and, in many cases, receive their daily news.
As young, agile companies like Google and Facebook quickly overtook the traditional media and IT firms they disrupted, so the term "disruptive tech" has passed from a popular buzz-phrase among Silicon Valley start-up culture into everyday business parlance. And that may not necessarily be a good thing.
For disruption"s sake
“It"s really fashionable to talk about disruption,” says Matt Chatterley, Founder of Jersey-based software developer Mattched IT. “It"s suddenly gone mainstream in the last six months, even though it"s really just the way that innovation works. Lastminute.com is a good example, in that it was highly disruptive at the time it was launched, but is now commonplace.
“People looking for disruption now often do so for no good reason, though. They"re developing things like scalping apps for selling parking spaces, and that"s not such a good thing.”
As an example, WhatsApp, the disruptive and free alternative to SMS popular with everyone from Welsh teenagers to Malaysian businessmen, is unlikely to feel threatened by newcomer to the instant messaging space, Yo, which allows you to transmit the message "Yo" and nothing more to contacts. Some do see the value in disruption for disruption"s sake, though - Yo recently received a $1.5 million investment, indicating that someone sees a future in its simplicity, which others may not yet perceive.
Chatterley says that the industry most ripe for disruption now is banking and finance, and points to the recent proposals to regulate Bitcoin in New York as an example of how revolution in the sector is inevitable.
“Whatever you think of cryptographic currency, it"s a great medium of exchange,” Chatterley says, highlighting increasing concern among consumers around sharing payment details online. “The big revelation is that you can push money to a target rather than exchange information,” he explains.
Established financial players are waking up to this too. In July, MasterCard launched its MasterPass service in 10 countries, which allows online shoppers to make payments without sharing card details with retailers. However, it"s in the developing world where the biggest disruptions are happening.
Banks and mobile operators have been fascinated for years by the rise of mobile money in African states like Kenya and Tanzania, where a majority of working-age adults now use Vodafone subsidiary Safaricom"s M-PESA system for transferring small amounts of money using voucher codes over SMS. By providing a cost-effective way for urban workers to save and send money to families in rural areas, M-PESA and its many imitators are seen as both a mechanism for disrupting heavily regulated and expensive formal financial systems common in lower income countries and a way to bring the "unbanked" into the fold.
Japie van Niekerk, Managing Director of Bidvest Bank, which underwrites M-PESA in South Africa, says he eventually sees mobile remittances working across borders too, removing often complex currency controls that hurt migrant workers" ability to send money home.
More to come
Disruption, then, is far from over, and while Christensen was keen to distinguish disruptive innovation from technological advances, the coming of age of cloud computing with its near infinite resources of processing power and storage will ensure that the next 10 years will be just as innovative as the last.
Just like the word disruption, the phrase "Internet of Things" (IoT) is also starting to enter the mainstream, and many believe it heralds yet another period of rapid change. IoT describes everything in the world of connected devices, ranging from tiny networked sensors to heavy plant machinery with on-board intelligence. Analysts at Gartner recently predicted that 26 billion devices will make up the IoT by the end of this decade, providing real-time information about almost everything, and a fertile ground of data for disruptive innovation.
“The next technological revolution will connect the world, quantifying the environment and sharing that data in vast databases,” says Lawrence Lundy, ICT Consultant for analysts Frost and Sullivan, “The mattress will know when a body is present, clothing will know when it needs to be washed, and the lights will know when to dim. The natural world is about to be quantified, automated and made more efficient.”
If you thought the last 10 years were interesting, strap in - there"s definitely more "disruption" on its way.
Drivers of disruption
“I"m "Airbnb"ing my flat at the moment,” says Maxine Brady, an Interior Stylist from Brighton, ”I made £1,500 last month. It"s a great alternative to renting in the short term.”
Brady is one of millions of people who are using a new generation of websites and mobile apps to rent out their homes or skills - where brokerage platforms replace old-fashioned bartering for mutual benefit.
The emergence of sharing in a particular business sector is rarely met with warmth by established firms. In the same way Craigslist, a network of free local classified ads, destroyed the business models of newspapers, Airbnb is seen by those in the hospitality industry as stealing business from traditional hoteliers. And to make things worse for them, it just closed a half a billion dollar funding round.
The best known of these disruptive sharing services is arguably Uber, a mobile app that matches owner-drivers with potential passengers. Uber improves on traditional minicab services by providing real-time location data on the car - so you know exactly when your ride is going to turn up - and handling the financial transaction, so you don"t need to carry cash around at night.
Not everyone is a fan. Licensed cab drivers from New York to London have attempted to get Uber banned because its drivers aren"t always subject to the same strict regulations around testing and insurance. And owning a licence to operate a taxi is traditionally a lucrative affair, which Uber seeks to undercut. In June, black-cab drivers in London joined their colleagues across Europe in a day of protest against the service.
Uber"s General Manager Alon Lits, however, is sanguine about the image his firm has among professional taxi services, and sees disruption of any long-standing business model as both inevitable and desirable. “Cab operators must improve, or people and drivers will both choose Uber,” he says.