What is the difference between Schumpeter’s “Creative Destruction” and Christensen’s “Disruptive Innovation”?
Rokon Zaman
Disruptive technologies drive creative destruction for offering us increasingly better quality products at a lower cost. Such reality is raising questions for clarifying this phenomenon. The line of questions often leads to a non-conclusive debate. Let me try to shed light to bring some clarity. The primary purpose of creative destruction is to offer a substitution, which is better and often cheaper than the incumbent one, to the existing product. But the substitution may show up primarily in two different forms. The first one is the improved version of an existing product, and the second one begins the journey in a rather primitive form, often around a new technology core, and consequentially grows as a substitution.
In a general sense, the society is in
Creative destructions have been taking place in our personal, family, and most importantly, in professional spaces. It has been taking place in both the open market and command-driven economies. I presume, this question is about to find the meaning of these two related phrases within the competition space of firms in the market economy. Creative destruction, sometimes known as Schumpeter’s gale, is a concept in economics that since the 1950s has become most readily identified with the Austrian economist Joseph Schumpeter who derived it from the work of Karl
In the first form, the substitution is offered to existing customers in creating the appeal of
On the other hand, disruptive innovation, as described by Prof. Christensen, does not focus on bringing a better version of existing products in creating an enhanced appeal of the product to the same group of customers. Rather, the innovator focuses on innovating a solution around a new technology core, having the potential to be a
For example, digital cameras caused disruption to film-based cameras. But initial emergence in the 1980s created no appeal to film camera owners to replace their cameras with digital ones, as at that time, digital cameras were very primitive. Who did buy those cameras? Often children were gifted with them to make fun of taking pictures—who later became serious customers of digital cameras. But the underlying technology core was amenable of rapid progression in making subsequent versions of digital cameras better as well as cheaper. In the course of time, the quality of digital cameras became so good in the later 1990s or in the early 2000s that they became a strong substitute to film cameras causing disruption to the f
It appears that Prof. Schumpeter broadly attempted to explain the role of innovation in economic dynamism, without giving adequate clarity in different variations. On the other hand, Prof. Christensen established a demarcation line between two important forms of creative destruction. By the way, these two creative forms of destruction require different forms of strategies to succeed as well as survive. Creative transformations of music and portable computer storage industries offer important lessons about creative destruction, causing disruptions.
It’s also to be noted that not all cases of creative destruction cause disruption. For example, subsequent releases of the iPhone caused destruction to previous versions, but without causing disruptions. On the other hand, the emergence of the digital camera caused disruptions to the film based imaging industry.
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