DISRUPTIVE INNOVATION

Disruptive Innovation and Aurora Health Care

Disruptive Innovation and Aurora Health Care

Introduction

Innovation covers a broad spectrum of technological developments, from small improvements that subtly affect a product's performance to radical re-envisioning of the technologies used to deliver a particular feature or function (McKnight, 2011).

Incremental innovations are those that gradually improve on an existing product through reworking or redesigning parts or components of the whole product to effect gradual improvement to the product. An example of an incremental innovation in energy can be found in motor vehicle internal combustion engines. Incremental innovation has allowed the fuel economy and emissions of internal combustion engines to gradually improve over time; however, the fundamental product remains recognizable (McKnight, 2011).

Disruptive innovations are those that will completely reshape the marketplace of an existing sector by virtue of delivering amenity through entirely different modes, methods, or techniques. They often require substantial investments in infrastructure and production methods. Disruptive innovations often come from outside an industry sector, and as such are not always welcomed by existing producers that supply that sector (McKnight, 2011).

Discussion

Disruptive Innovation and Technologies

In addition to the effects of innovation on society and economy, technological change affects companies and their competitive position within an industry. Christensen's concept of disruptive innovation shows how creative destruction works on the industry and enterprise level (Harper, 2010).

Disruptive innovation can be summarized in the three keywords: simple, cheap, and revolutionary innovation. Disruptive innovation theory points to situations in which new organizations can be relatively simple, convenient, low-cost innovations to create growth and triumph over powerful incumbents.” Research distinguishes between sustaining innovations and disruptive innovations. Sustaining innovations involve a firm attempting to provide its customers with better quality and ultimately more profitable products or services. In other words, firms listen to their best customers to fine-tune their product or service; this approach has been valued in the past, and—as described it can lead to the failure of market leaders in the face of disruptive changes (Harper, 2010).

For innovation strategy, “existing companies have a high probability of beating entrant attackers when the contest is about sustaining innovations. But established companies almost lose to attackers armed with disruptive innovations”. Disruptive innovation brings industry leaders to question whether to invest their money in sustaining innovation that seem to be much more attractive in terms of profit margin compared with disruptive innovations that take place in low profit margin markets (Harper, 2010).

Innovation and Technology

Innovation is closely related to technology development. New technologies can help to improve the environmental performance of products or services, processes, institutions, and systems. Within technology studies there are two competing views on what drives technological change. Technological determinism views technology development as an autonomous process that determines the nature of society. Social constructivism acknowledges the influence of groups of people on technology development. There is an interaction between technology and society. People can attribute different meanings to artifacts—human-made things—and they may value technology differently. This view also emphasizes that technology takes time to adapt to changing demands in society, or that society takes time to ...