The name of this forum, “The Disrupting Business Journal”, refers to the disruption of the ordinary circumstances of our personal and commercial activities. Implicitly, this is an allusion to the idea of “creative destruction”, developed by Joseph Schumpeter to describe the nature of innovation.
Innovation is currently considered as the “new” and universal solution to almost every problem in society, concerning areas such as health, economy and business. However, the use of innovation as a means of advancement is very old. It is even older than human existence, since innovation is not exclusive to human beings. Research from renowned universities proves that animals are also able to innovate and disseminate their inventions. Examples of it are found among numerous animal species such as otters, dolphins and birds and it is widespread among primates.
One of the most important innovations known, which is critical to the evolution of Homo sapiens, is the invention and diffusion of oral language, followed by the birth of writing. Through language, human beings acquire the capacity to communicate their experiences and develop incremental innovations, accumulating knowledge at increasing speed. This marked the beginning of culture and human progress, with the on-going control and transformation of our planet as its first consequence. Oral language is therefore a great innovation and the one that caused the most important disruption known to date.
Although the ability to innovate has always existed, the study of innovation is recent. French researcher Gabriel Tarde pioneered the field in 1890 when he published a piece of work on the diffusion of innovation under the title “Les lois de l’imitation“. Schumpeter further developed this field of research, introducing the idea that innovation can also have a destructive side. Following this argument, Masaaki Hirooka made one of the most recent contributions in his work “Innovation Dynamism and Economic Growth“. One of the undesirable effects of innovation is the potential cause-effect relationship between major global innovations −such as steam, electric energy or the petrol engine− and the slowdown phases of economic cycles. Quite often innovations generate serious difficulties for the industries that they are threatening. These difficulties begin when the innovation is still at its initial stages and is a long ways away from becoming really productive and efficient. As a result, productivity reductions are experienced for some time and, in the case of global innovations, this may lead to an economic downturn.
As an example, let us consider all what is needed to spread the use of internal combustion engine vehicles after their invention. On one hand, there is the need of factories, oil refineries, gas stations, repair workshops, roads, regulations, traffic signals, training for drivers, etc. This, in turn, demands huge investments over a long period of time which will yield benefits over the medium and long term. On the other hand, the new emerging activities may lead to undesired secondary effects such as environmental damage, and require regulation would still need to be developed. Some innovations result in negative balance due to their highly destructive effects. Mortgage-backed securities, for example, have undoubtedly contributed to the recent financial crisis.
We should study, prevent and minimize the destructive secondary effects of innovation. However, the history of human development, this is to say the history of innovation, has shown that the overall global result is clearly positive. In the case of verbal, written and multimedia language, successive innovations such as mail, printing press, radio and television, have increased the diffusion of knowledge, boosting innovation in a great number of fields.
As a means of interactive and multimedia communication, the Internet is extraordinary. It leads to the creation of new services and business models of great relevance, and affects firms and individuals in a disruptive way. Its effects are creative and destructive at the same time.
The Internet is also a tool to enhance collaboration in analysis, research and development. It is a global, high speed network for the diffusion of ideas and the exchange of knowledge, practices and experiences. An outstanding example of the potential of the Internet is the various initiatives undertaken by some top universities to offer high quality training for free or very low cost to anyone interested. The Internet has already become the tool to exponentially increase our capacity to innovate and therefore to progress.
The Disruptive Business Journal is meant to be an online open forum to spread, collaborate and discuss on innovation-related subjects. It aims to share lessons from successful cases as well as from failures, to analyze new propositions and theories, to warn of potential destructive effects of innovations, and to promote good practices.
The Internet will greatly boost innovation and make possible outstanding improvements to society in many fields. Good times are coming.