Innovation is nothing but the constructive application of newly discovered ideas or techniques that lead to the creation of new products or services or enhancement in delivery of existing products or services. However, innovation can also be a change in methods or manner of doing things (or a combination of both) that has positive economic, social, or political impacts. A more specific definition would be an achievement of something beneficial in terms of enhancing business performance, providing value to customers and employees, adding value to the environment, or creating or preserving competitive advantage.
The word ‘disruptive’ was first used by linguists John Locke and David Chalmers in 1832 to describe disruptive innovation. According to them, it is an incursion into an old market where the customer is already satisfied with a product or service. The original firm then adopts disruptive innovation by producing the same product or service in a new shape or form that serves to reduce costs and increase profitability. The original firm comes out of the process of being disorganized and disenchanted with its own practices and gets back into the business and ultimately delivers new products or services that are more satisfactory and advantageous than those that it had been previously producing.
On the other hand, eco-innovation refers to process innovation that is geared towards environmental benefit. A common example is the production of cars that is more fuel efficient and does not pollute the air. Both eco-innovation and disruptive innovation refer to the fostering of more efficient ways of doing things, but the process of eco-innovation is more directly linked to the cause of the environmental crisis.
In contrast, disruptive innovation refers to unjustified innovations that displace established firms in a market. The most common examples are the launch of lower priced smartphones that undercut the profitability of established brands like iPhone in the face of higher and better priced smartphones from Samsung and others. However, eco-innovation often times has the effect of developing new, more superior products at a lower price. Disruptive innovation thus tends to displace established product innovation by producing something that is better, more convenient, cheaper, and easier, or by introducing a new feature at a lower cost where it can be exploited to serve a new market segment.
With regards to which type of innovation is more helpful for society, it depends upon how it is handled. On one hand, eco-innovation and disruptors allow the first companies to get in on new ideas while allowing established ones to use their established methods to maintain a foothold. The new ideas thus allowed to enter the market serve as a catalyst for disruption. It also forces established companies to adapt to new practices so that they can continue to profit from their market position. The same is true for product innovation. The process allows new products to gain traction in the market that was previously held by established brands.
Therefore, although it may appear that new ideas are detrimental to an industry’s ability to innovate, this need not be so. Innovation can occur both through disruptive and incremental innovations, which allow an industry or company to maintain its competitive edge and remain relevant in today’s marketplace. As such, business leaders need to consider how to utilize their time and resources to craft an effective strategic plan that would allow them to maximize the amount of time and resources they could dedicate towards making new products, enhancing existing products, and seeking to disrupt existing markets. By taking full advantage of their time, businesses can stay ahead of the competition and stay true to their overall company goals.