Can you spot the next ‘disruptive technology’?

Another thought for those of you who like spotting trends and ways in which the changing technological environment can have a huge impact on firms.

In 1995, two researchers at the Harvard Business School invented a new term: “disruptive technology”. This is an innovation that meets the needs of a small segment of consumers better than the existing technology. Once a niche is established, the product can develop, become cheaper and eventually sweep away its rivals. Their problem is whether they should ignore the threat or switch to the new system.

The obvious example is the digital camera, which came from nowhere as an expensive and inferior alternative to conventional cameras. But, you could look at a picture immediately after taking it and download an image onto a computer to use or share. Within about a decade you would struggle to buy a new camera that uses film.

The Economist is asking a ‘thought experiment’ this week. Could the battery powered car be the new digital camera? First, the negatives:

Electric cars are expensive
They have a limited range
They take a few hours to recharge

But on the other hand:

Motor manufacturers are under huge pressure to become ‘greener’
Batteries are getting better and most car journeys are short anyway
Once bought, the car would be much cheaper to run
Electric cars have better acceleration

That’s were cars like the Tesla roadster come in (at a cool £74,000, pictured below). It’s clearly a niche product, but niche markets are the classic way in for a disruptive technology. Tesla’s next vehicle, the Model S, is a more mainstream (though £30,000) family car.

You’ve heard of the Toyota Prius and watch out for the GM Ampera next year. They mix an engine with batteries. Is this the beginning of a great disruption? It certainly hasn’t been a quiet time for the motor manufacturers recently…