What is Discontinuous Innovation? (And Why It’s the Key to Staying Ahead)

Ever felt like the world is evolving at a speed that’s hard to keep up? This is the essence of innovation– and its importance in the modern business landscape is explored in our article, ‘What is innovation in business – and why is it so important in 2024!“

But perhaps you’re wondering ‘what is discontinuous innovation’?

Well, we’re glad you asked!

In short, it’s a type of innovation that introduces a completely new product, service, or technology that has the power to disrupt entire existing markets… and creates new ones. It implies a radical departure from established norms, often requiring significant changes in consumer behavior and industry practices.

This isn’t your average product upgrade; it’s about groundbreaking shifts that leave entire industries scrambling to catch up. The kind of change that makes you say, “Whoa, where did that come from?” and “How did we ever live without it?”

In this article, we’ll cover what it is, why it matters, the different types, real-world examples, and how your business can either ride the wave… or get swept away by it.

What is Discontinuous Innovation, Really?

Discontinuous innovation is the ultimate paradigm shift, a revolutionary breakthrough that introduces products, services, or processes so radically different that they create entirely new markets or fundamentally alter existing ones.

It’s basically the difference between a minor software update and the invention of the internet.

Forget about incremental improvements; we’re talking about disruptive leaps that leave competitors fighting an uphill battle.

Think of how the first iPhone wasn’t just a better cell phone; it was a pocket-sized computer that changed how we communicate, work, and entertain ourselves.

Key Characteristics

As you can probably tell by now, discontinuous innovations are a breed apart because they possess a unique set of characteristics that distinguish them from incremental or even dynamically continuous innovations.

Here’s what sets discontinuous innovation apart:

Breakthrough Technology or Approach: They’re based on a fundamental technological leap or a radical shift in how a problem is solved. This could be a new scientific discovery, a novel application of existing technology, etc.
Creates a New Market: These types of innovation create entirely new markets or significantly expand existing ones, targeting non-consumers who were previously unable to access or afford similar solutions.
Requires New Skills and Knowledge: Because they introduce entirely new ways of doing things, discontinuous innovations often require the development of new skills, knowledge, and infrastructure. This can involve everything from training workers to building new manufacturing facilities.
High Risk and Reward: Discontinuous innovations are inherently risky, as they venture into uncharted territory. However, they also offer the potential for significant rewards, including market dominance, high profitability, and the ability to shape the future of an industry.
Long-Term Impact: Discontinuous innovations have the potential to create lasting change – such as disrupting entire industries as we know them, redefine consumer behavior, and even transform societal norms.

5 Best Examples of Discontinuous Innovation

The Telescope: It’s interesting to look back and imagine that people once believed the world to be flat. But the invention of the telescope reshaped our understanding of the universe, which also led to other major scientific breakthroughs.
Penicillin: The discovery of penicillin back in 1928 revolutionized medicine, providing the first effective treatment for bacterial infections and saving countless lives.
DNA Sequencing: DNA sequencing technology transformed biology and genetics, opening up new avenues for research and medical treatments.
The Microprocessor: The invention of the microprocessor fundamentally changed how we work, communicate, and access information.
The Internet: Finally, have you seen the Netflix movie that Obama executive produced, “Leave the World Behind,” in which a cyberattack virtually destroys civilization? Can you imagine a world without the internet? Yep, neither can we.

Main Differences from Disruptive Innovation

In simple terms:

Discontinuous: Brand new; game-changing; creates new ways of life.
Disruptive: Starts simple and cheap; improves over time; takes over the market.

Now let’s go more in depth:

Discontinuous Innovation: This is when something completely new and different is invented, changing how we live and work. Think of the first car, the internet, or the telephone – these were game-changers that created whole new ways of doing things.

Disruptive Innovation: It starts with a simple, cheaper product that might not be as good as what’s already out there. But it’s good enough for some people, and over time, it gets better and better until it takes over the market. Think of budget airlines or digital cameras – they started small, but they eventually changed the whole industry.

We covered an entire article explaining what is disruptive innovation here.

Incremental vs. Discontinuous Innovation

What’s the difference here? Let’s break it down:

Incremental Innovation: This is about small, continuous improvements to existing products or services. Think of a new iPhone model with a slightly better camera or a faster processor.
Discontinuous Innovation: This is a whole different ball game. It’s a radical departure from the norm, introducing entirely new concepts or technologies that redefine an industry.

Dynamically Continuous Innovation: A Middle Ground?

There’s also a category called dynamically continuous innovation, which sits somewhere between incremental and discontinuous.

It involves significant improvements that don’t necessarily create entirely new markets but still change how we use products or services. In this case, consider the shift from film cameras to digital cameras – a big change, but still building on the basic concept of photography.

The Innovator’s Dilemma: A Missed Opportunity

While discontinuous innovations can create enormous opportunities, established companies often struggle to embrace them due to a phenomenon known as the “innovator’s dilemma.”

This occurs when a company becomes so focused on serving its existing, profitable customers that it neglects to invest in radical new technologies or business models.

The problem? This can leave them vulnerable to being overtaken by more agile newcomers who are willing to take risks and explore uncharted territory.

Benefits and Challenges of Discontinuous Innovation

Benefits

New Markets and Revenue Streams: Discontinuous innovations can unlock entirely new markets that were previously untapped or nonexistent, leading to significant revenue growth.
First-Mover Advantage: Companies that pioneer discontinuous innovations often gain a significant competitive edge, becoming market leaders and setting industry standards.
Enhanced Brand Image: Successful discontinuous innovations can elevate a company’s brand image, positioning it as a leader in innovation and technological advancement.
Societal Impact: Many discontinuous innovations have the potential to solve pressing social problems, improve quality of life, and contribute to overall progress.

Challenges

High Risk and Uncertainty: Discontinuous innovation is inherently risky, as it involves venturing into uncharted territory. There’s no guarantee of success.
Significant Investment Required: Developing and launching a discontinuous innovation often requires substantial financial resources and a long-term commitment.
Organizational Resistance: Established companies may face internal resistance to change, as discontinuous innovations often require significant shifts in strategy, culture, and operations.
Market Uncertainty: It can be difficult to predict how consumers will react to a radically new product or service, and whether it will gain widespread adoption.

Discontinuous Innovation Case Studies

The Transition from Horse-Drawn Carriages to Automobiles

The Old Way: Horse-drawn carriages were the primary mode of personal transportation for centuries, with a well-established infrastructure of stables, blacksmiths, and carriage makers.
The Discontinuous Shift: The invention of the internal combustion engine and the mass production of automobiles in the early 20th century completely revolutionized transportation. Cars were faster, more convenient, and could travel longer distances.
The Impact: This led to the decline of the horse-drawn carriage industry and paved the way for the development of highways, suburbs, and a whole new way of life.

The Shift from Landline Telephones to Mobile Phones

The Old Way: Landline telephones were tethered to homes and businesses, limiting communication to specific locations.
The Discontinuous Shift: The introduction of mobile phones ‘freed’ communication, allowing people to make calls from, well… virtually anywhere.
The Impact: Mobile phones revolutionized communication, making it possible to stay connected on the go. And guess what? It led to the development of smartphones, which have become indispensable tools for work, entertainment, and social interaction.

The Rise of E-commerce:

The Old Way: Shopping was primarily done in brick-and-mortar stores, with limited options and fixed hours.
The Discontinuous Shift: The advent of the internet and the rise of e-commerce platforms like Amazon completely transformed retail. Online shopping offered convenience, a wider selection of products, and the ability to shop from anywhere at any time.
The Impact: E-commerce led to the closure of many physical stores and the growth of online giants. What’s more, it also changed consumer behavior, with online shopping becoming the norm for many.

How to Find Discontinuous Innovation Opportunities

Want to be the next big disruptor?

Here are some of our top tips for sharpening your radar and spotting those cutting edge opportunities:

Look for Emerging Technologies

Keep an eye on the latest advancements in technology. Are there any new tools or capabilities that could be used to solve existing problems or create entirely new experiences?

Pay Attention to Shifting Consumer Preferences

What do people want and need now? Are there any emerging trends or unmet desires that could be addressed with a new product or service?

Identify Underserved Markets

Are there any groups of people whose needs aren’t being met by existing solutions? These are prime targets for discontinuous innovation.

Challenge Assumptions

Don’t be afraid to question the status quo. What if things were done differently? What if there was a better way? This kind of thinking can lead to breakthroughs.

Curious about how to put these principles into practice? Dive into our comprehensive guide to discontinuous innovation management to discover the top 10 best practices for fostering a culture of radical innovation.

Tired of Playing Catch-Up?

The pace of change is only accelerating, and discontinuous innovation will continue to reshape industries and our lives in ways we can’t even imagine. By understanding its power and potential, we can prepare for the future and seize the opportunities it presents.

The world doesn’t wait for those who stand still. Don’t be left behind by the next wave of discontinuous innovation.

Explore how innosabi can empower your business to uncover groundbreaking ideas and lead the next wave of industry disruption. Request a demo today.