Strategic observation

Disruptive innovation: Here's what to expect

2018-05-15 20:07:39 (Beijing Time)         English.news.cn

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BEIJING/WASHINGTON, May 15 (Xinhua) -- U.S. consumer electronics retail giant Best Buy recently announced that it would shut down all 250 of its mobile phone stores, effective on May 31. This is just the latest in a series of expected closings by major U.S. retailers.

Some observers blame the rise of e-commerce, calling it disruptive to the traditional retail industry.

This reminds us of "disruptive innovation," a term coined by Clayton Christensen from Harvard Business School in 1995, which describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.

Just like digital photography left behind film camera giant Kodak, and smart phone growth blunted Nokia's once-leading mobile phone business, new disruptive technologies in recent years have knocked down numerous seemingly unbeatable giants, and reshaped various industries.

Such new technology is not necessarily much more complicated than the previous one, it's just better suited to market demand, said Wu Hequan, an academic at the Chinese Academy of Engineering.

A 2013 report from the Mckinsey Global Institute had estimated that the applications of 12 disruptive technologies, including advanced robotics, Internet of Things and the Cloud could have a potential economic impact between 14 trillion U.S. dollars and 33 trillion a year in 2025.

In October 2017, Chinese President Xi Jinping said in a report to the 19th National Congress of the Communist Party of China that his country will prioritize innovation in key generic technologies, cutting-edge frontier technologies, modern engineering technologies, and disruptive technologies, highlighting the importance of disruptive technologies at the national level.

As China transforms from high-speed development to high-quality development, the country should vigorously support growth with key original innovations, from which disruptive technologies might emerge, Wu said.

According to a KPMG report released in late March, 26 percent of those surveyed named China as the second most promising market for tech breakthrough; the United States ranked first at 34 percent.

As disruptive technology breeds new opportunities, China needs to create a more favorable environment for its development, above all reforming its evaluation system in the field of science and technology, experts said.

An objective evaluation system should focus on long-term achievements, and strictly follow peer review, rather than overemphasizing the journal impact factor and paper quantity, said Zhang Fuchun, director at the topological quantum computing center of the Chinese Academy of Sciences.

Wu highlighted a tolerance of failure in the process. "If we don't allow failure and everyone thereby follows the routine, how can we have the motivation to create something disruptive?"