Lepore on disruption

What’s driven me crazy from the start about the gospel of disruption is that on one reading it commits the naturalistic fallacy–we should change everything because this thing is happening. Even if it were true, there’s no evidence that we would know how to predict and act on the disruptive process. Or that we should act on it. But if you don’t assume that, you can’t make the money on disruption.

Note that the New Yorker put Christiansen out there as some kind of profit earlier, which was extremely irksome.

I literally cackled with glee about 2 paragraphs in. I’ve been desperately waiting for someone to puncture this balloon.

Another glorious thing about her piece was that she really shows how the capacity to do actual historical analysis is necessary for these wanna-be gurus. (Well, necessary if they want to make claims approximating truth. It’s not necessary for them to make absurd ideological claims and make money doing so. Thomas Friedman’s house is proof of this.) And they don’t have a clue how to do history.

Ah, I should explain just a bit more:

The problem with intelligent people is that they can create elaborate arguments to buttress weak sentiment, e.g. Charles Murray. Because people are complex and contrary, such gossamer arguments usually depend on talking about essential aspects, where there aren’t any, of people. The arguments are constructed that way because it slants the playing field anytime the axiomatic stuff isn’t blasted to smithereens. Adversaries thus tend to find venally neutral terms in place of acid and evisceratory rhetoric, of course, in the name of decorum. We all then start talking as if capitalist utilitarianism is here, natural, and always the best dictionary and thesaurus, no matter how crazy the bland is…

Great post, Eric. Thanks particularly for the quote/paraphrase from Charles Beard. When you find or remember where it’s from, would you mention in a comment or update?

An excellent article.

Wall Street spends 58 minutes of every hour trying to predict which technologies will prove to be disruptive and which will make little difference. History has proven definitively that despite all of energy and motion they can do this correctly exactly 50% of the time (less fees and expenses of course).

(Before anyone asks, the other two minutes are spent pilaging innocents, maiming adorable puppies and otherwise causing global mayhem, unless of course they are simply wasted.)

As regards Lepore’s secondary argument, in Systems of Survival Jane Jacobs argued at length that applying the values and goals of business to enterprises whose values and goals are different is problematic. Jacobs said that doing so produces “monstrous moral hybrids”.

I always thought that “disruption” was something about how you can’t beat the local maximum by starting from the local maximum (because someone else is there already), so you have to start somewhere else (“downmarket” is the typical example); in turn, the occupier of the local maximum won’t be able to compete with you once you’ve found a higher maximum. Of course, that’s also pretty much tautological if you assume that incumbent businesses occupying the local maximum will refuse to leave it – you just need to assume that some greater maximum exists elsewhere, then start climbing a bunch of hills until you find it. It certainly makes a neat model.

The problem is that Clay Christensen picked the aggressive-sounding word “disruption” for this concept, and people now think that calling their crummy new business “disruptive” makes them sound edgy and exciting. Rich middle-aged white men exhorting their naive proteges to be more “disruptive” is not a pretty sight for anyone with a modicum of self-awareness.

These people are certainly distasteful. It does not follow, however, that they are necessarily wrong. Maybe the top of the hill that the MOOCs are climbing right now is going to turn out to be higher than the hill that traditional universities are sitting on. It’s probably worth finding out if that’s the case. In the abstract, the idea that new interactive and communicative technologies ought to change how we educate ourselves (and how much that costs) does not seem particularly outlandish. I can’t feel terribly upset that some people are trying it, even if I think they’re occasionally a tad obnoxious about it.

Is being “disruptive” good for business? In a way, probably not. It rests on the assumption that the path less traveled does actually lead to a pot of gold, which probably isn’t true in most cases. Trying to disrupt an industry is hard and most of the time it won’t work. Most plans to disrupt existing, proven business models are simply going to fail. It might be better in most cases to aim lower and make some existing business a little bit more efficient.

The flip-side is that improving existing institutions might be even harder. There’s good evidence that most improvements in productivity come about through the entry of new firms rather than the sudden improvement of existing ones (whatever Bain Capital might say otherwise). Hierarchical organisations really don’t like listening to the tier 7 functionaries even if they have a much better idea for how the business should work than the people who are in charge. It’s probably a good thing that some firms get disrupted, and the ones we should be really afraid of are the ones who seem to be immune to it.

I’m not sure I get Eric’s point about why, then, some organisations – those consisting of “people”, as opposed to the soulless droids who start, own, operate or work for other organisations – ought to be immune from disruption. The example institutions were, in some cases, disruptive themselves once. Churches have pretty much always been in the business of disrupting each other, and using technology to do so. I’m going to hate myself for typing this, but many religious movements start off as downmarket outsiders, being dismissed as cranks by the establishment, which they eventually infiltrate and take over. At a sufficiently abstract level, that’s disruption in action. There’s no obvious reason why organisations of people cannot, or should not, be disrupted.

I can understand people saying that they don’t like the specific disruptions on offer: disrupting education is simply not possible as universities represent a centuries-old tradition that cannot be improved upon by a team of Silicon Valley 20-somethings on caffeine drips; or, if it is possible, it will lead to education that is worse, not better, and therefore we must now allow it; or, even if it is possible to deliver better education by some measure, the wider costs make it undesirable. The problem is that if you’re picking your arguments from The Rhetoric of Reaction, you’re probably not making very good arguments. Sitting athwart history shouting “stop” has never worked very well, least of all in America.

If I’ve understood correctly, the argument is that, since disruption isn’t the only way to improve things, we could profitably attempt to rediscover some of the other ways. To borrow from Hirschman again, we could use a bit more Voice and a bit less Exit. To which I would wholeheartedly agree, but I would point out that here the disruptionists have an advantage: they’re well-organised, well-funded and have a clear and ambitious program of action. Those of us who think that we could make institutions run better by, say, making them more democratic, are sadly reduced to carping about the excesses of the other side most of the time.

The problem is that if you’re picking your arguments from The Rhetoric of Reaction, you’re probably not making very good arguments. Sitting athwart history shouting “stop” has never worked very well, least of all in America.

The trouble is that that line of argument can be used to push any brand of snake oil or hucksterism or just plain bad idea under the sun.

“There’s no point in sitting athwart history shouting ‘stop’; in the future everyone will be ordering their pet food online. You might as well get on board with the inevitable and buy as many shares of pets.com as you can…”

“This rhetorical tactic aims at moral ends by appealing to a venal calculus. Like the commuter who rescued his fellow-citizen from a train track because he didn’t want to be late to work, maybe we will rescue our public goods from disruption – not because it’s the right thing to do, but because we won’t profit if we don’t.”

This could very well work, and sometimes does; but then the problem is of course, what happens when we are faced with a situation where the right thing to do is not efficient, and does not save resources? 100+ years (at the least) of liberals making this tactical decision in terms of argument makes sense in the short term — it’s a good strategy — but is disastrous in the long term, as we actually feel awkward, queasy, and annoyed by argument about the public good and the ethical society. Since not enough people go ahead and make that argument, we lose the capacity to even make it a viable option, strategically speaking.

The Real

The primordial Real in which a (pre-Oedipal) human subject is born is differentiated from the real which a subject integrated into the symbolic order experiences. In the former, the real is the continuous, “whole” reality without categories and the differential function of language. Following the mirror stage, however, and the eventual entrance of the imaginary and the symbolic (the split of the subject between the conscious imaginary and the unconscious symbolic), the real may only be experienced as traumatic gaps in the symbolic order. An example of this are traumatic events such as natural disasters, which effectively break down the signification of everyday life and cause a rupture of something alien and unrecognizable, without the usual grammar of the symbolic that conditions how to make meaning of something and how to proceed.

But that’s a little narrow and technical. We come into being as speaking subjects by means of a disruption in the Symbolic.

And of course, what Anarcissie said. And also, the proletariat comes into class consciousness-for-itself by means of a rupture with the prevailing hegemony. Revolution is a rupture with atrophied institutions. Etc

It is very bourgeois liberal to be frightened of a discourse of discontinuous change.

Phil’s comment, not surprisingly, is insightful (and his link foregrounds some things Lepore herself says (not all of which I agree with)). But the point of disruption, and you see this is you read Lepore’s article, is not that employees hold back companies from surviving. It’s that non-survival is a foregone conclusion. Disrupted companies can hold on for years, sometimes, but not forever, and they never come back to where they once were. That doesn’t mean–and no one says, except the kind of people who were chanting “paradigm shift” twenty years ago–that everyone is disrupted. It does mean that once no one wants minicomputers anymore, you can’t just make better minicomputers and still play in the big leagues.

Back in 1990, companies were dealing with two disruptions: the PC and Microsoft. We are down to exactly one company that existed in 1980, out of a dozen or more, still making a good amount of money on state-of-the-art computers (and IBM and a few others in smaller markets). On the other hand, in 1995 it had been “decided” that nobody could compete with Microsoft and they’d have 100% of every software market, and that did change.

Anarcissie & quoter-sama:

I’m not sure what the Marx quote has to do with disruption in this case, but it’s a point worth pursuing. The “innovators” really don’t care about the relationship between business or workers – hence SN’s mention of the naturalistic fallacy. The author’s focus on capitalism in America at a particular period in time does not mean that we can’t apply these same categories to relationships between workers. It’s an interesting omission.

This Amazon review by Kartick Vaddadi of The Innovator’s Dilemma says the book contrasts three types of change. All of them are useful for consumers. Then there is a discussion of how it is that responsiveness to protecting particular kinds of change is useful and gets enshrined in companies, and where it isn’t.

Kartick Vaddadi’s statement that SSDs in computers are “disruptive” over regular hard drives is right – if we mean what the difference is for consumers. If we’re talking about the difference to manufacturers, though, patent portfolio sharing and cross-licensing, as well as the expiration of many fundamental research patents, mean that there are a large number of companies that manufacture them.

Many other recent technologies that are arguably “disruptive” have been developed within a notably stable industry. Take the video space: sedTV and FED could have been disruptive for providing great new displays, but cost ruled them out years ago. Digital coin miners have kept graphics hardware manufacturers nVidia and AMD well in the black for a period, though that party is now over. It’s not just external events that push these changes, though: AMD and nVidia seem to mirror each other when they roll out DX12 (from nVidia, in collaboration with Microsoft) after Mantle, or when AMD decides it needs FreeSync after nVidia announces G-Sync. These are two technologies (and standards) that provide that experience of a “disruptive” improvement to consumer technologies, and they appear to have been done through cooperation, instead of winner-takes-all strategies.

Both companies are paying very close attention to ways in which they might be able to catch up their competitor dipping into forbidden secrets, in hopes of forcing a disruptive exit from the marketplace. But it’s not clear that this is anything more than just churning on. Even in the case where some company can force such an issue through the courts, the government has been cautious of throwing an established company overboard (when such a large part of the economy could trail behind it). At this scale, companies are more likely to settle for patent cross-licensing and royalties to evade criticisms of monopoly (which is basically one result of directionless “disruption” taken to the extreme), as with Intel and AMD.

Yet the idea of disruptive technological development isn’t all bunk.

Onto quoter-san’s point: The “local maximum” sounds close to saying that there is an upper bound of some type, like ‘how pure can we refine our materials,’ ‘how precise are the production processes,’ ‘which metallurgy and crystallography textbooks do we read.’ All these things can improve over time. But at every step the level of research and understanding is far less than it could be, so we never actually do what is “optimum” (or among the optimal choices) when imagining a complex piece of technology. Only relatively recently (I think in the mid-80s) did we really start moving computer modeling of technology to incorporate physical modeling. And of course there is a limit to how far we can spend calculating what is best. Electrical engineering textbooks state as standard that you can use a “lumped load” model for many tasks, and below certain frequencies you don’t need to pay close attention to RF effects and the like. The latter is an omission by design; the former is omitted by accident.

The idea of “disruptive technologies” is best when it points out that not only do we somewhat lag behind achieving what is possible, but in fact whole fields of discovery often go unnoticed due to accidents of history, physiology, and everything else. Start thinking of “what would aliens value in technology?” or alternative histories (wouldn’t Neal Stephenson approve?) and this becomes clearer. What if IBM researchers hadn’t stumbled across the eclectic raft of insights (spin-coating, the analogy to vinyl discs) that made the magnetic rotary hard disk a reality in 1956?

“Disruption’s” place in advancing technology seems way overrated. We can find Usenet posts from the early 1990s with people accurately predicting how much RAM people would have. Moves away from 2D manufacture to more 3D manufacture were known and used by Seymour Cray when his computer company was relatively young, even though only recently have such ideas started to be developed for consumer products.

But it still happens.

The basic problem seems to be a simple human one: It’s easy for bureaucracies to get too focused on things that are entirely extraneous to the decision making, and even if they try to do everything right, there’s still the possibility somebody else will find that low-hanging fruit first. The key, I think, is trying to figure out whether we actually need companies to become immortal institutions – are HP or IBM immortal? GM or Ford? – and also how it is that we can make sure that companies with the expertise and the people get rewarded.

I’ll just end up by mentioning one of the all-time technology whoppers: Sight-shorted businessmen looking for something like the next “disruptive change” gave away one of the crown jewels of 20th century display technology, because the grass was greener on the other side. From the piece:

The four Jewish men who worked in an almost-secret division called Autometric for Paramount Pictures on the project then called Chromatron—which after a handshake became the Japanese “invention” the Trinitron—are barely a footnote on Wikipedia, while the engineers at Sony live on in glory. Nobutoshi Kihara, who in 2011 died in Tokyo at eighty-four, was as celebrated in Japan for his role in the Trinitron’s invention as he was for inventing the Walkman. The project was sold for a mere one million dollars in a deal cooked up at a cocktail party. Within a few years it made billions, the Trinitron dominating the world market. Sony tweaked five years of research for sure, but in this daughter’s opinion they should share credit. Even if in my father’s opinion: “Who cares? I don’t think about it, only you.”

The story as I have it so far, is that the stores wouldn’t stock color sets because the picture was so unsteady. Engineers were under fire to produce a bankable consumer model. The head office was always breathing down their necks. Someone was going to make a killing. If a man at RCA made the breakthrough, it would reestablish his company as the leader. The big executives visiting the floor would say things like, “That Tokyo fellow put SONY on top of the map with the transistor radio. Out of nowhere, they led the world.” Or: “Think bigggg. New ideas saved Ford, the ’49 Sedan was introduced in ’48 and saved the company from bankruptcy.”

Finally, prediction #4 off this list should sound pretty familiar today.

@bob mcm:

Sometimes I work hard to agree with you; more often I have difficulty getting past my initial “Oh, FFS.”

“Ontological hegemony” is one of those big green things they put around large British estates, isn’t it? They used to hunt people in them.

Don’t want to derail substantive discussion here. But do want to note that the principle triumph of Reaganists is the invidious creep of market think into all aspects of life.

This is just recycled Schumpeter.

Schumpeter tried to reason out how it was that there were so many obvious market inefficiencies and so much obvious waste in the economy, when the invisible hand ensures that there will be hardly any waste or inefficiency.

He argued that each industry inevitably approaches monopoly, and this makes it easier for innovators to come up with alternative technology. The old established industry has had a long time to improve on their learning curve, they will be somewhere near their local optimum. The innovators will be far from their own local optimum, but they must get better than the established approach before they can compete. Monopoly lowers the bar, and so helps to increase the rate of innovation.

He argued that business cycles are a good thing because in recessions the least productive businesses fail and so release the resources they were inefficiently using to be available for new purposes. People see the inefficiency of recessions, but they don’t see the higher efficiency they cause.

Left to itself, everything the economy does encourages creative destruction which improves the economy in the long run.

Schumpeter made JustSo stories to explain the contradiction between observed facts versus the theory of efficient markets.

Anyway, apart from the hoopla there is something important about the disruptive concept. If you are running a business in a particular market niche, and you get an innovation which results in

1. Higher prices
2. Bigger sales

that’s very good. Like, customers get improvements they are willing to pay more for, and also those improvements let them use your product more. Even after your competitors catch up with you, you get a slice of a bigger pie.

But what if instead you get an innovation which results in

1. Lower costs
2. Lower or same sales.

Then you can sell cheaper and increase market share. But when your competitors catch up, you get a slice of a smaller pie.

If you already have a significant market share, you benefit from the first kind of innovation and you suffer from the second kind. But if you start out with no market share, you benefit either way. Assuming you have sufficient resources to actually break into the market with your cheap innovative product.

There are various ways to assign importance to this. It’s a concept that has some uses. I don’t see that it has a lot of moral significance, unless you are in the market for moral justifications and you think this is a better fit to your needs than competing intellectual products.

Business is boring and discouraging for most of those participating. There’s a market for preachers, who can feed the spiritual need. Clayton Christensen, I’m sure, imagines himself a scholar and a theoretician, but what he is, is a coach-at-half-time of a losing game for dispirited salesmen, wishing they were doing anything half as meaningful as playing a high school basketball or football game.

For this reason, the strongest parts of Jill Lepore’s essay, for me, concerned the concept of disruption as a cultural phenomenon, expressing the intense anxiety of the times. (And, bob mcmanus, with all the incisiveness of the impenetrable Nagel, may have been addressing this, I don’t know.) I wanted her to make the connection between the depth psychology of the faith in disruption and the yawning vacuum where public purposes and ethical commitment should be in the political and business discourse. I wanted her to make that connection and explain it, and I feel disappointed.

She did try to challenge the pretension with which Christensen transforms his “case-studies” into just-so stories, decorated with bumperstickers masquerading as analytic concepts. It is kind of mean to challenge Christensen’s enthusiasm for “disruptive” innovation with the fact that Seagate, a focus of one of his first studies, is still the largest hard-drive maker, after more than 40 years. And, I like mean. But, it was not clear to me what her point was. Ditto, for the observation that U.S. Steel is a unionized workplace. And, for the record, journalism is a profession; journalists work for businesses that publish stuff.

For this reason, the strongest parts of Jill Lepore’s essay, for me, concerned the concept of disruption as a cultural phenomenon, expressing the intense anxiety of the times.

I may not be a cheery and content person but I don’t recall the times that weren’t anxious. Maybe “disruption” is the Late, Great Planet Earth for suits.

Temporary Name: I don’t recall the times that weren’t anxious.

Yes, of course. To every age, etc.

I thought Lepore was fairly clear, though, in tying this particular concept of disruption to the particular character of our anxieties, in contrast to other times.

I thought Lepore was fairly clear, though, in tying this particular concept of disruption to the particular character of our anxieties, in contrast to other times.

It does occupy a funny space as a manual for and justification of self-immolation.

In 1960, business offices were full of people typing, running mechanical calculators, running copiers, receiving and sending and carrying mail around and so forth.

Heck, in 1975 my Highlights magazine came with an address label written out longhand! In 1959 the US Government and General Motors sent out payroll checks engraved on rock–true fact!

Seriously, trying to drum up sympathy for the person who lost their job saying “we need this in triplicate” and “that was a computer error” like they did in 1970, by claiming other industries not only caused their problems but that other industries didn’t have job losses themselves, seems to me terribly misguided.

Should sympathy be drummed up for that person?

WTF kind of a question is that?

Is that a question you really think the answer might be “no” to? What a craptastically insulting thing to say.

@ Anarcissie / #37:

I think I reached close to the same conclusion in my second overlong post, roughly.

If you’re saying that there is a disruption inherent in capitalism and that focusing only on one aspect of it causes a disconnect with reality – then probably, yes, that appears to be the case.

Not sure that it’s quite accurate to the history of IBM to say that the PC didn’t disrupt things – but it’s really beside the point (for reference, I remember an IBM insider saying “IBM at the time had the people, had the technology, everybody was ready to go…and the company just didn’t.”) The PC, and the Microsoft/IBM split, really was disruptive for IBM.

The bigger story behind that, though, is this: IBM’s still around, and they’re still selling services and computers that would look fairly familiar to people who sold System 360s back in the day. So it turns out that protecting that market actually has kept IBM in good stead. They weren’t beating the world with software development, during the heyday of Microsoft, but they didn’t need to be.

@ bianca steele / #40:

I’ve seen stacks of old printing plates used by IBM to print their punched cards. You can probably find them on eBay still. It’s not a stone tablet – but close enough, right?

Interesting point on shifting blame. In this discussion, you often hear people say “we have to spin off a company to protect the main company (and also isolate the spinoff from entrenched staid corporate culture), and that “entrepreneurs” must always try on their own and fail repeatedly. There are lots of emotional reasons why these things might happen, but I can’t accept the argument that things must be this way, that companies can’t have internal leadership to follow a new vision while protecting old strategies. The idea that a spinoff is isolated from the main company seems silly, like moving an office across the street or into another state somehow means that it’s no longer in competition with the old markets.

#37

Lepore says, very generally, well, it didn’t really happen, a lot of the old companies are still around, a lot of the new disruptive ones disappeared, and so on.

http://www.thinkinenglish.com/jokes_in_english.php?option=kawal&id_kawalu=972

But senor, the old nondisruptive company does not always lose.

okay, a bit OT, but what’s the deal with all the replies with comment numbers that don’t match? I’m having to work a bit harder to follow what’s going on.

If we’re looking for concrete examples, what about Apple, Inc.? Apple, it seems to me, is the perfect embodiment not only of Christensen’s thesis, but of LePore’s antithesis as well. And if, a thousand years from now, archaeologists should uncover the remains of Apple’s apparently empty spaceship headquarters, and its thousands of apparently empty retail outlets, all emblazoned with Jony Ive’s tantalizingly reductionist version of the apple-with-a-bite-out-of-it corporate logo, what will they think they’ve found?

The temples of a successor to Judeo-Christianity, maybe — the cross of humility replaced by the symbol of a belated, yet somehow insanely successful acceptance of the serpent’s gift? I’m indulging myself in a fanciful vision here, I suppose, but I’d argue that it’s not entirely inconsistent with what Apple does in fact represent. And what about that iPhone — what it is and what it does? Can you think of a more perfect symbol of both the streamlined moderne and the classic contradictions of capitalism? Mirabile dictu, it even fits in your pocket.

neew spahse space
What happens when the ‘infinite number of monkeys’ are slysdexic?

Obviously meant ‘new phase space’ :)

The temples of a successor to Judeo-Christianity, maybe — the cross of humility replaced by the symbol of a belated, yet somehow insanely successful acceptance of the serpent’s gift?

Also don’t forget that the first Apple went on sale for $666.66 and the Apple start up sound is in fact the …

Tin foil hats for everyyone!

Okay, you all, just wait one second…

What is it when we’re talking about when we are talking about disruptive innovations? Going through this thread, it seems like “disruptive goods” seems to outweigh any other kind of innovation. Not disruptive logistical/backoffice/manufactoring device, nor do we talk about disruptive government services like the damming of the Colorado, victorious armies, or welfare programs. I mean, shouldn’t a big part of this discussion be about Obamacare and the theorizing/politics leading up to the startup, since a big part of health care reform was precisely how and how not to disrupt? If we’re talking about ideology, shouldn’t we be talking a bit more about the split between private and public good in more than just the sense that this managerialism helped to reduce the public infrastructure or bust unions? Where, how, and when discourse about disruption is probably important, as well as where the discourse is aimed it. I started thinking about this stuff because floopmeister @53 is talking about clearing away dead wood. All the leftover buggywhips? What?

Must I spell it out?

Only if you think I was serious :(

Of course Marx has something (important) to say about disruption. It is at the heart of his theory of relative surplus value. Lepore may be right to claim that “disruption” is used in a facile way – and is no doubt uttered a thousand times a day in pitches by 20-somethings to angel investors here in the Valley. But if you don’t think the phenomenon isn’t real you haven’t been paying attention – just spend a few minutes looking at the DRAM industry or considering the implications of Moore’s Law.

@ shah / #58:

I can understand why everybody missed it, but I believe I mentioned “Not disruptive logistical/backoffice/manufactoring device” arenas in my second post. Actually, in my draft I was even more explicit about this.

List-o-mania:
– Relations between workers and management
– Bureaucracies (Gone Wild!)
– Common artifacts (TVs)
– Devices and techniques commonly used to create artifacts (metallurgy and the Heavy Press Program…speaking of that, I don’t think there has been any technology to disrupt the merits of the Alcoa-type presses, which remain useful in specialized industries. Likewise, the heavy engineering investments going into automotive weight reductions to meet the new CAFE standards would seem to put steel industries in a tight spot, but actually there’s a lot of room there, even if you don’t believe the bullish-on-steel reports out of ArcelorMittal.)

– Space goat holy shrines! They like them apples.

I really don’t accept Amazon’s supposed disruption of the book selling business. Amazon “disrupted” the book selling business only because, for reasons I do not understand, its stockholders allow it to operate as basically a charitable enterprise dedicated to providing consumers with staff that’s really cheap because Amazon doesn’t need to turn a profit.

I don’t think Amazon would be particularly disruptive if it had to turn a profit to stay alive. I think it would be out of business in a year or two. to turn a profit to stay alive. I think it would be out of business in a year or two.

Bruce Wilder @ 65

Every now and again one of us has, but after Blake, we’ve been afraid to mention it to anyone above the rank of corporal. So…what in the fullness of time ought to have become an Umwertung aller Werte is now generally considered a form of onanism.

This criticism seems narrow to me. It is more generally the market, of which one manifestation may be Schumpeterian disruptive innovation, from which certain institutions need to protected. For example, Richard Nelson argues that the provision of the news is a public service, but we can’t count on private institutions guided by profit made through paid subscribers and advertisers to provide the journalism that a democracy needs for its functioning.
Disruptive innovations that take a lot of advertisers and paid subscribers elsewhere may further compromise the quality of the news, but even in the absence of disruptive technologies, the market already poses grave threats to the operation of some important institutions.
This criticism, as quoted here, does not seem to cut deeply enough.
But I look forward to reading the article.
I am reminded that Nathan Rosenberg, most sympathetic to Schumpeter, once criticized his exaggeration of the economic importance radical innovations and relative neglect of the incremental innovations that were responsible for most technological progress. Another place to look here is Chris Freeman’s theory of national systems of innovation in particular at the performance of systems in which venture capital, looking for next big thing, has less power.

I think it is important to understand that in Capitalism, Socialism, and Democracy, Schumpeter describes his idea of “creative destruction” in the context of a very careful argument that capitalism will destroy itself by setting up OTHER seeds of its own downfall. It is as if he wants to counter any opinion that “creative destruction” is part of that downfall process: “creative destruction,” he says, is really the process of capitalism being healthy. So don’t point to it, and say that is why capitalism will fail. Capitalism’s failure will come certainly, but for very different reasons. (In a similar way, his book starts out with a learned four-chapter criticism of Marx: Schumpeter dismisses some of Marx on the way to presenting his own theory of why capitalism will fail — and which he finally calls a Marxian analysis!) I think however as we enter an historical stage that uses fantasy rhetoric like “disruptive innovations” for what appear to be self-marketing ploys, Schumpeter himself might have wondered whether the real story here is that finally, capitalism is mentally imploding, which is indeed part of his argument about how capitalism will set up the seeds of its own downfall.

Disrupted companies can hold on for years, sometimes, but not forever, and they never come back to where they once were.

But that (as Lepore points out) is the trouble with the ‘disruption’ story – it’s an each-way bet. $DISRUPTOR succeeds and $DISRUPTED goes bust? What did I tell you! $DISRUPTOR goes bust? Failure’s all part of the process! $DISRUPTED is still around and doing fine? Ah, but they’re not dominant any more… Like Lepore, I’ll take a disrupted Seagate over a disruptive MiniScribe any day.

And this is also the point of the article I linked – not to discuss the details of Disruption, The Process but to identify the distinguishing marks of “Disruption”, The Snake Oil. Whether disruption corresponds to anything real or not, “disruption” is a very influential – and mostly pernicious – brand of management-speak; that article suggests where it came from and why.

… we swapped paperback novels—Kurt Vonnegut… that kind of thing

I feel strongly that Lepore’s article wants to be called Schumpeter, Foma and Granfalloons

To me, it seems like disruption is a misuse of Schumpeterian creative desctruction for tech-business guru purposes. The whole point of creative destruction is you can’t know where its coming from next; some people can make vaguely intelligent guesses. You just benefit from a good market position while you can. There is no way of taming it. In that sense, Lepore is right on target calling bullshit.

But I think criticising creative destruction itself on the basis that these companies last longer than implied by supposedly overwhelming market forces slightly misses the point: we are fundamentally interested in profits going to firm owners or shareholders. The fact that firms themselves survive in some form by changes in ownership does not imply that creative destruction hasn’t taken place. Their products and practices have still been changed dramatically. The question is instead how long out-sized returns to existing owners are maintained. I think one does see large swings in returns on that front. You don’t do THAT well buying shares in already successful companies, and not consistently.

Shareholders don’t benefit all that much when a big company they own stock in sucks in a new entrant – its actually a cost of maintaining their market position, while the owner of the new entrant walks away with millions or billions.

In his Ethics Badiou reminds us that there was a time that Deleuze was for disruptive innovation–the creation of free, i.e. private-sector radio stations at the time that French radio was entirely state-run. Deleuze spoke of this as the conquest of a fragmented, multiform territoriality. Badiou grants that this was partly right. But notes that what took place was mostly the conquest of radio by capital. Badiou argues that to oppose capital we must oppose one univeralism against another, not merely react to it or counterpose particularism against universalism. Lepore seems to be saying that we should not simply welcome disruption of the status quo for a greater plurality of options as progress?

Uber is another case where there really isn’t anything that should be considered patentable, and it will inhibit competition in other “uberable” areas, so to speak. I wonder how much of this “disruption” rhetoric is driven by winner-take-all strategies enabled by our ridiculous system of intellectual property.

Metatone @ 15

“I think the point is that sometimes the theory of disruption breaks down and is effectively snake oil.”

I thought the point is that there is no theory of disruption to break down, for commonly understood definitions of ‘theory’, e.g. predictive utility. If “sometimes someone comes up with something new, and sometimes it works, and sometimes the someone in question is an upstart, and sometimes the upstart is successful, and sometimes that success topples some established giants, and sometimes the upstart eats them; but more often not”, now what?

@74

I’m all for calling out people who pull technical jargon out of its proper context and apply it haphazardly to anything that interests them at the moment. The thing is–if you look at firms from the inside, from the point of view of people who work and (metaphorically) move around inside of them, not only from the point of view of academic economists–when you get disrupted, you damn well know it. It’s not something the boss has to explain to you. If a consultant has to explain it to you, using theory about what “has to” be the case and about how your employer doesn’t fit the narrative anymore so you’d better change the way you work to change your employer to a different kind of thing, it probably isn’t disruption. No one had to explain to the cabbies that Uber was “disrupting” them, and nobody is arguing they have to be more like Uber to survive either.

Whether disruption corresponds to anything real or not, “disruption” is a very influential – and mostly pernicious – brand of management-speak; that article suggests where it came from and why.

Thanks for “that article”.

One thing I’m paying attention to, because so many finance bloggers are paying attention to it, is the potential disruption of international payment via online parabanking companies. Think: http://blogs.reuters.com/felix-salmon/2010/06/22/competition-in-payments/http://blogs.reuters.com/felix-salmon/2010/06/22/competition-in-payments/

As with Bitcoin and money created by cell phone companies, I tend to view all this as being about the combat of networks rather than the combat of best practices. In this sense, I believe that there is going to be a major crash in the internet economy in Silicon Valley, leading to the resolution of a few, large, networks, whether that means a big company or some sort of cartel. The collusion lawsuit over tech pay is just one sense of what people are really trying to process, whether that was by one network or another. Since so much money is flowing into what is a business war zone, invariably the debt that supports this isn’t going to anything that will pay it back, even at .01% interest. When the money flows out, business is rationalized, and we see the processes and products that actually are winners, and then imagine that those things “disrupted” “uncompetitive” organizations.

For instance, when we talk about Nokia, we talk a lot about Elop’s disastrous effort to change course, which had “disruptive intent” all over it, what with prematurely obsoleting the Symbian platform in favor of Microsoft OS, Cortez style, and then rushing out a product everyone hated, at least at first, Lumia. However, take a look at the sort of networks centered by Google, using the Android platform, or the sort of walled garden that Apple cultivates. It seems to me that the urgency of Elop’s actions were pretty much all about the fear of being left out of a vital international corporate ecology, and not quite about the lack of products or innovation in and of itself. In the end, the real record most of us has, aside from deep diving Google, are the products that we see on store shelves, and their commercial success/failure tends to mask everything that went on before it. Broader economic trends and geopolitics determines what new innovations are successful and what old innovations are obsolete, and not the inherent worth of the innovation. Nokia just picked the wrong alliances, is all.

J Thomas @90

Why cable and later satellite TV was disruptive relative to plain old broadcast TV is that it created 100s of new content producers. When they first started laying cable there was no CNN, no ESPN, no HGTV ….. none of it. They laid cable and broadcast things that were already in existence, but because for example CNN didn’t need to put up a tower in every city in America they could reach a national audience via the distribution chanel of cable, not via free airwaves.

People were happy to pay for the ‘premium’ content of CNN, weather channel, sports channels etc. and it expanded the pie without canibalizing any of the incumbents. Simply put the creation of a distribution channel created its own product content – if you build it they will come. If that’s not distruptive I’m not sure what is.

“Should you feel sorry for me? Does it make a difference that under employment allowed me to discover serious joy as an amateur woodworker? ”

Sorry about your job loss and good luck with your new passion.

@93. Thanks! Things are good. I get $30 an hour to review docs and $40 an hour as a handyman. Not to mention the ineffable joys of trying to understand the comments of unreconstructed Marxists, Hegelians, and whatever you call folks who love Schumpeter!

Too few Americans question this whole thing. They just seem to take it on faith that “creative destruction” is the norm, natural, the only way possible of doing things . . . and that humans are naturally competitive, blah blah blah.

In reality, the vast majority of humans hate competition, run from it, and would rather cooperate with one another, peacefully, enjoy their free time with friends and family, kick back, perhaps even smell the roses from time to time.

It’s always been a small percentage of humans that have a need to compete and win, to control others, to order others around. The alphas and the sociopaths among us — who, in America, mostly go into business.

And the con has always been these alphas, these sociopaths, telling everyone else that we all share the same need and drive for competition and victory as those alphas and sociopaths . . . . which isn’t true. But it is an excellent way of ensuring “cooperation” and acceptance of our own exploitation. It is an excellent way of brainwashing us into believing that what the alphas and sociopaths do is perfectly “natural” to them and to all of us.

In reality, however, the vast majority of us don’t seek competition — or at least competition of the decisive and far-reaching kind. We don’t want to be conquerors and world beaters. We’re cooperative, social beings first and foremost, and we need to stop buying into the con.

“I get $30 an hour to review docs and $40 an hour as a handyman.”

Hmmm. Perhaps I need to look into “laid off lawyer” as my next career move.

/More seriously, glad to hear things are going well. :-)

Thanks, MPAV,

Have finished my novel and am now starting another. Getting some friends to read the former before deciding what to do with it.

Lee A. Arnold: I wonder how much of this “disruption” rhetoric is driven by winner-take-all strategies enabled by our ridiculous system of intellectual property.

!

You use the case of Uber, which is attacking taxi service, and more pointedly, the public system of taxi service regulation, while also rather cynically abusing the intellectual property system.

This goes back to the central point of the OP: drawing attention to the hidden, deprecated, second thesis of the Lepore article, deprecated because the OP speculates, ” A significant portion of her readership would find it tedious to be told less briefly that we need to remember, or revive, the language of public trust, public interest, public service.”

Any long established way of doing business allows us to work out an ethic within that framework, an acceptable boundary between private interests and public values. The ethic is only sustainable in that business model framework, even though it may relate to some more transcendental standard of moral conduct and values. And, when the business model goes, the ethic — and often a whole slew of public administrative functions and understandings — get trashed as well. The question of a public interest does not go away, but the old answer no longer applies in the disrupted circumstance.

Clayton Christenson takes a sidelong glance at this issue, by generalizing to the effect that the disruptive innovator is often introducing a product or service that doesn’t meet established expectations for “quality” and talking about how the incumbent is often inhibited by commitments to technical or engineering standards that are “higher” than apply in the brave new world of the disruptive innovator.

Lepore may be taking notice, when she mentions that U.S. Steel is unionized, but the rival minimills are not. Certainly, as she takes up the case in relation to journalism, when she discusses the concept of a journalistic wall, which some think, with almost religious devotion, ought to separate editorial operations from publishing and advertising. As the old order of production is disrupted, the old order of ethics and public service is disrupted with it.

Innovation is a strategic play, an attempt to change the game and the rules of the game. And, attacking, or leveraging, the institutions, including regulatory institutions, that define and enforce rules of the game in the public interest, is necessarily part of the game. The rules governing cellphones are different from the rules governing landlines. The rules governing newspapers are different from the rules governing blogs. The rules governing car service may be different from the rules governing taxi service. The rules governing international payments by innovative parabanking or bitcoin or whatever may be different from the rules governing clearing houses and correspondent banking.

There’s a real risk, when innovation is a private affair, driven by private money seeking private gain exclusively, that the defense of the public interest becomes a reactionary and ultimately doomed activity. Public goods and public infrastructure are just opportunities to cannibalize, to be absorbed in privatization or discarded as obsolete.

@103 Bruce Wilder

I’m confused about the import of your comment. In the case of Airbnb the public has an interest it not being ripped off and, not being discriminated against based on race, etc, just like in any hotel or motel. And, of course, the vast majority of the investment in this “disruptor” was from the DOD and other govt sources. Is it the latter (the source of the investment) that causes the former (the fact that our old regime of values is still applicable)? Is it just a lucky case? Or are you saying the total opposite?

What a coincidence. Here’s a puff piece about Christensen in the current issue of the Harvard alumni magazine: here.

“Equally – disruption doesn’t have to imply being cheaper or inferior.”

It is important to Christenson’s model that it is inferior in some way. Otherwise, the customer base of the original product will demand it and the original companies will try to provide it.

“‘He’s a stupid person’s idea of what a smart guy sounds like’.”

I have always liked that joke.

@ lemmy / The Temporary Name on Christenson:

There doesn’t seem to be a requirement that anything be inferior about the product at all. Trader Joe’s argument is okay, but I’d point out that there are plenty of cases (tho mostly in the sundry consumables / dry goods space) where advertising makes or breaks a product. Yes, the low margins for dry goods probably rarely (if ever) meet the other definitions put forth for a disruptive product, but it’s certainly possible for something to simply be [i]different[/i] without actually being so. I don’t want to get too far into the weeds over this, but I think that what determines disruption is what is said and believed about a product, popularly, regardless of whether it’s actually true.

Part of the reason this happens is that techniques for discerning true comparative advantage of one product over another are rarely developed (at least in time to drum up support for sustaining the existing market). Companies have every incentive to distort these differences, because their belief that “in the future, Y product will be far better (at being future-proof in making $) than X ever was (it’s dead to us)” means they have to drum up support now.

It’s also important to note that disruptive technologies often are known to be inferior by large groups of people, but depending on the type of product and the scale of production, large groups of consumers may be powerless to do anything but accede to the change.

Some types of markets have built up accommodation for more maintenance/support-oriented companies servicing “disrupted” products. Others have barely any accommodation.

hix / #77:
If I had said that the Mittelstand was an absolutely universal alternative to market disruption, that would clearly be wrong for the reason you give. However, let’s note a couple things: The modern positioning of Mittelstand companies (or at least the conception of them) may turn out to be as much a historical anomaly as was the postwar era of low income and wealth inequality, though for very different reasons. If technology, and the economy at large, begin to afford less room for disruption, then it stands to reason that

And there is also the not wholly minor question of the Mittelstand companies having the ability to endure for a very long time. It seems that in fact some types of company – even those involved with the supposedly chaotic world of consumer-oriented parts distribution – have a large amount of immunity from disruption (if that means having the ability to continue operating as a business.

I also wonder whether your argument that Mittelstand-type companies are all sitting on “small upmarket niches.” There are plenty of companies which I think qualify as Mittelstand companies – i.e. http://www.goforward.com.tw/en/company.html with its claimed capitalization under $1M USD – in the rough and tumble of supplying major components for omnipresent low-market consumer appliances.

We’ll see if that large sound of vast amounts of loose change (the average value of the what Dave Jones of EEVBlog unflatteringly calls “Shenzhen market” cheapies) starts to turn to hard dollars, or what will happen if the regulatory scene around China shapes up. But let’s not forget that there is a huge domestic demand as well. If the fly-by-nights end up being pushed into closing or becoming Mittelstand themselves, then where is the argument?

(I wrote a bit more about this earlier, which I’m carrying over in my response to J Thomas

Rakesh / #80:
This is one of the most important points, for me, and nicely summarized.

J Thomas / #87:

Not sure what I was thinking with dismissing Kropotkin – the increasingly decentralized manufacture of tech (in many arenas) is starting to extend to precision parts, so his example (industrial weaving) starts to look like today’s 3D printers. Some things (Heavy Press stuff) probably don’t need to be everywhere, and can be shared. Other things (semiconductor and other ultra-precision refinement, manufacture, and testing facilities) also seem like they work better when more centralized (but perhaps this can change in the future with different manufacture methods). And, even if we don’t get an “official” standard, I think that the emerging Mittelstand-type companies can become the de facto standard (I think this describes most early companies in the 3D printing realm, though some large companies from other industries – i.e., one manufacturer of CAD software – are trying to muscle in as well).

I think a key element in this is the false technofuturist allure of ‘disruptive technologies,’ when ‘disruptive technologies’ mean you need a totally new design of physical plug for your new cable, with no parts in common, and this just to squeeze out people who previously made fine data cables, and who could easily upgrade their processes to meet the new standards. The dark side of IP, I suppose. Planned obsolescence, it’s been called, but here we have the specter of entire supply chains being flattened for no apparent reason other than pursuit of monopoly.

It would be nice if consumers had some ability to push back against cosmetic / monopolistic disruptions. I think one of the potentials of the Mittelstand type company is its ability to use its smaller size to insulate itself against change, so if its main source of demand starts to weaken, perhaps it can start to make up those losses by back-channel or direct service sales.

To achieve this, of course, it would be nice if the global market for service and maintenance of common goods was improved. Here we are in the year 2014 and we treat a startlingly high portion of the objects off assembly lines as one-off handcrafted, unserviceable, and irreplaceable works by artisans. The only thing that has changed is that no artisans can even service much of the new stuff. Not all of this is bad, though – in the old days, a lot of the functions we now take for granted in a computer required costly plug-in boards or extra modules, all of which represented extra points of failure; today a lot of that is down to one small chip which can be replaced with relatively little impact. So far, the argument against owning something forever (like a family buying an early cast iron stove might have thought about it) is that there are still sizable improvements being made from model to model.

I think we may be in for this if the pace of technological improvements start slowing down notably.

shah8 / #89:

Of course, watch them scramble to protect their interests and deny this disruption.

Banks are a puzzling fit in this discussion – clearly many of their functions don’t seem to be uniquely valuable, and all the competition promises to boost responsiveness to customer needs and pare back some of the most egregious tacked-on fees. But on the other hand, bank panic and the Great Depression. Maybe this just means we need a truly centralized bank serving microlenders and other smaller players who do not need to be enshrined as “too big to fail.” We would still have to police predatory and incompetent practices, but what’s new?

In reality, however, the vast majority of us don’t seek competition — or at least competition of the decisive and far-reaching kind. We don’t want to be conquerors and world beaters. We’re cooperative, social beings first and foremost, and we need to stop buying into the con.

Exactly! The application of the sterile ‘insights’ of orthodox economics to all fields of human endeavour (bye bye Gary Becker and good riddance to you…) is part of the con:

“[evidence] from many fields indicates that cooperation and altruism are the statistical norm and represent the more typical, “normal,” spontaneous (or natural) and healthy behavioral pattern in primates. In fact, cooperative sociality is a necessity for well-being in anthropoid primates.”
Sussman & Cloninger 2011, ‘Origins of Altruism and Cooperation’, Developments in Primatology: Progress and Prospects, Volume 36, Springer New Yorkp, pp. viii

Always avoid the comment sections of newspapers. They are where decency and good sense go to die.

I find it interesting that in the discussion of Lepore’s article, which specifically talks about continuity and incremental innovation, these terms disappear – as though innovation and disruption were identical. Her point, I think, is that they are not, and that there is a lot to be said for institutional continuity. I think this is a very good point. There’s a myth that when a technology is superceded, somehow, it will fade away. But horses are still massively used for plowing and even in the military – Osama famously got away on a pony. And many companies keep on doing the same thing for decades and even centuries. The internal combustion engine, using gasoline, is still the major mode of transportation in the US and most of elsewhere. We haven’t much changed the way we build roads, sewers, and skyscrapers. There was a nyt magazine article about the pacifier last week – the form with the little bulb attached to a small shield has been around since 1901.
Lepore isn’t denying that there are disruptive spillovers, but I do think the disruptive story of innovation is way overblown. Meanwhile, the destruction of r and d departments in favor of manic searches for disruptive apps is, I think, a fad that can’t last – although it can leave spillover damage. Here’s an article that seems pertinent, re the aging of our hard ware: http://www.nytimes.com/2014/03/16/magazine/silicon-valleys-youth-problem.html?module=Search&mabReward=relbias%3Ar%2C%5B%22RI%3A5%22%2C%22RI%3A16%22%5D

Sorry for the bad coding:

Here’s the link:

http://thebaffler.com/past/whats_the_point_if_we_cant_have_fun

David Graeber . . . talking about sociability . . .

hmmm

“Not to say” . . . . that is.

As corporations become ever more powerful, they attempt to take over the mind as well as everything else. Teaching college, we hear of “productivity” and are given brilliant solutions such as cutting remedial classes as a means of reducing the students who need help. Get rid of the class, and voila! the students magically write at a higher level.

Business is a lousy model even for business. That’s how we got in the mess we’re in now.

Plume 06.26.14 at 6:16 am @ 123 —
So you don’t think the state is (re)created in daily life? If only the leadership, the superstructure, is pathological, why can’t the rest of us just cast it off?

@ generally —
It is true ‘disrupt’ etc. are buzzwords. However, I believe Marx on this one: the disruption of human culture, institutions, and relations is inherent in capitalism, and, if you look at the situation with a long enough perspective, in the whole slavery-feudalism-capitalism sequence, just beginning to go really fast at the end (where we are riding along in the handbasket). The situation would be more hopeful if we could count on capitalism finally disrupting itself into nonexistence before it destroys the world physically.

Like clichés and stereotypes, buzzwords often contain a core of truth.

Disruption at the technology level is a somewhat important concept. Incremental change will get you closer to your local optimum. It’s fairly obvious how to do it, and the rewards decline logarithmicly — usually the closer you get, the smaller the improvements still available.

When you switch to a new local optimum, all the incremental changes you made approaching the old optimum are wiped away. Maybe you can still use some of them, and the methods you used to make them may still be valuable, but everything you put into getting closer to the old local optimum is now obsolete. But of course you have something better, and since you’re lower on the learning curve you can probably improve faster…. There’s something there.

Disruption on the company level is less interesting, unless you are an employee or stockholder of one of the companies involved. Sure, evolution often drives species into dead ends, where they are selected to do something that works in the short run but gets precarious. It’s like you’re traveling through a giant maze, following the trail of cheese crumbs, and you’re finding more and more crumbs, and then suddenly you hit a blank wall and you’re a long way from anywhere and there’s no cheese. It happens. It happens. You can blame it on your competitors, which implies that they played a deeper game than you, but chances are they didn’t. Probably they were just luckier, in the short run.

Then there’s the bigger picture. How can it happen that a worse product gains market share against better products, perhaps driving them to extinction so that people who want the better products simply can’t get them? If you deeply believe in free-market economic theory that will seem like a contradiction. Though it’s always possible to come up with some sort of JustSo story to explain each individual example. If the new product is cheaper then we can say the customers preferred to pay less more than they cared about any other factors. If it’s more expensive but it’s pink we can say that women liked it better because it was pink. Etc. There’s always a story you can make up. But how about this one — every time you buy a major-brand product, a significant part of the price you pay goes to the advertising and marketing that is cunningly designed to make you want that product. You pay them to influence you to want their product instead of competing products, and a lot of what you pay for is zero-sum — they pay (and so you pay them) to pull you in different directions. Why would anybody expect that products would get “better” for consumers? You pay them to convince you it’s better. The better they do that, the more money they can spend to convince you more. Any objective measure of quality only comes into play when the difference between products is so large that it can’t be overcome by NLP mind control techniques.

So what’s the problem? Do you deeply believe in free-market theory? Hey, I’ve got a great deal for you in a slightly-used tooth fairy….

That said, I agree with this 100%:

The situation would be more hopeful if we could count on capitalism finally disrupting itself into nonexistence before it destroys the world physically.

@129 the thing that does seem to have changed is the pace of change. There’s an interesting discussion about how this impacts business “moats” / monopolies / profits here: http://www.interfluidity.com/v2/5031.html

This stuff isn’t marginal, nor should we expect it to be. In fact, we should expect the prevalence of rent capture (or worse) as a source of economic profit to increase with technological progress. Why? Because, absent chicanery, technology increases the ease of production and the efficiency of distribution. As Schumpeter pointed out, the source of profit in real-life capitalism is the fact that monopoly power is ubiquitous because of natural barriers to competition. The corner store has a monopoly on the convenience of its neighbors, and so can capture some of the surplus that might otherwise be bid away to customers by competitors. On-demand delivery drones would eliminate that monopoly. Yet the corner store industry might lobby to prevent residential rooftop deliveries, in which case it is no longer exploiting a natural inefficiency but capturing a rent. In business school, students are taught that a successful business has a “moat” that makes it difficult for competitors to bid away ones margins. Technological progress renders moats that derive from nature harder to come by. Instead, successful businesses — and successful people (since under capitalism, a human is just a small business) — must rely increasingly on moats that result from social and political arrangements. We choose to grant monopoly rights to “creators” in the form of intellectual property and to expand their scope. We choose to limit the taxi business to medallion holders. We choose to prevent Indian doctors from competing in American hospitals, even though airplanes have eliminated locals’ natural monopoly. We choose to hire from the Ivy League. The distribution of profits is determined by social choices rather than by natural scarcities.

I have a rather personal stake in this issue because I worked at the ur-example of a disrupted company, Digital Equipment Corp. I was a chip designer there from 1981 to 1992. DEC’s collapse in the early 90s was a huge blow to Massachusetts, and was very much on the minds of people like Christiansen. It really did get un-done in the way he describes – it kept building better mini-computers as the far worse and far cheaper PCs overtook it during the 80s. DEC did take a stab at the PC business with the Rainbow line in the mid-80s, but the margins were awful and it was abandoned. The company itself was a great place to work and was wildly innovative, largely because of the workplace democracy mentioned above. “Those who propose, dispose” was the motto, and that meant that people worked on a huge range of technologies. Many have done stellar work elsewhere. Dan Dobberpuhl, for example, formed the processor team at PA Semi that now does Apple’s core chips.

So it’s not surprising that Christiansen and others looked for lessons in this disaster. It wasn’t the quality of the engineers and managers – those were both good. It wasn’t that the market was poor, or that the technology failed. It was just that they were too good at something that was becoming obsolete.

It’s now clear that he over-generalized this one case. Intel also faced disruption from smaller firms, particularly those adopting RISC architectures, and beat them back by expanding the x86 architecture farther than anyone thought possible. IBM was undercut by basement shops assembling PCs, and so found new markets. DEC could have done that in networking, or disks, or printers, or processor chips, but couldn’t manage the transition.

Companies fail all the time, and fail for a host of reasons. Christiansen-ish disruption is a real cause, and should be paid attention to, but doesn’t actually seem as important as he describes. DEC at least failed in an honorable way, by treating its people and its customers well. Dishonorable failure is far more common.

Roger Gathmann and Zamfir, thank you. Clearly there have been revolutionary developments in this area while I wasn’t looking. I think the old concepts are adequate for the point I wanted to make, but I need to look into the new ideas.

… incremental innovation is not a distinctly different type of innovation than disruptive, and I’d contend that sui generis disruptive innovation is extremely rare. Mostly, it comes out of incremental innovation, for the obvious reason that those technologies with one affordance are rare.

I’m guessing that what you’re talking about is like this — the old concept of hill-climbing pictured a simple solution space with a 2 dimensional domain and a 1 dimension range for goodness. When there’s an optimum it’s a finite optimum, and as you get closer you level off — if it’s very steep near the optimum that isn’t great because when you try to use your solution tiny changes could drasticly affect the “tuning”. But the new idea says that when you think you’re hillclimbing and it looks reasonably simple, particularly when there are many dimensions at any time you might “turn a corner” and get access to improvements you had no idea were there. What looks like slow small incremental improvement can suddenly blossom into something big.

My thought is that when that happens, a lot of what you thought you knew becomes no longer directly useful. That creates a kind of disruption.

When autos replaced horses, did blacksmithery get completely wiped away? No. Instead, the first auto mechanics generally came from the rank of the blacksmiths, because the innovations in metalwork and familiarity with the stresses of transportation, the road system, etc., were still valuable.

I was wrong to imply that all the old knowledge became suddenly useless. But I think usually some of it does.

I will make up a story about your blacksmith example. Since I am not a blacksmith I might get it all wrong, but I hope the story makes sense. There are various things people care about, about metals. Strength, toughness, elasticity, all within some temperature range, etc. So, imagine that as a blacksmith you have learned a whole lot about how to manage the metal to get a very good strength, toughness, elasticity, etc for horseshoes. You are an expert at doing things just right to create the best horseshoes. But now you want to work on automobiles. You have the opportunity to repair or perhaps replace auto parts. They each need a particular strength, toughness, elasticity, etc. Your skill at getting that just right for horseshoes might accidentally fit the need. But more likely the needs will be different. You must learn what properties are required, and learn how to provide those properties. The methods you used to find out what properties were required for horseshoes and how to provide them, might come in handy. The work you did to get it just right for the old case, will probably not be useful.

Similarly, a secretary who developed a powerful set of macros to help her do her work in WordPerfect, will have it all to do over again when she is required to switch to Microsoft Word. (That isn’t very disruptive so she has a clear idea what functionality she needs, and only needs to figure out how to make Word let her do it.) An engineer who has developed a complex set of shell scripts in Linux to link together simple routines into an efficient way to access oil well data, has it all to do over when his boss requires him to switch to Windows.

And when your whole thinking has to change, it’s harder.

Thanks to several for a variety of good ways to think about disruption. I guess the thing I struggle with, and its a point made several times, is why disruptive products have to be inferior, cheaper or otherwise destructive to the underlying product categorty.

I gave examples earlier with cable TV, let me try a different one – graphite shaft golf clubs. Prior to the use of graphite shafts a golfer had to make a trade off between straight shafts which afforded accuracy and flexible shafts which could produce distance.

The introduction of graphite shafts by Ping and others vastly improved the optimization between these two trade offs and over a fairly short period of time completely eliminated the prior technology. What’s more, because graphite shafts are more forgiving (because of the trade off) it sparked an surge of interest in the sport bringing in more dollars from amatures taking it up and more for professional golfters because a greater fan base led to bigger purses, more advertising and TV revenues.

While no doubt there were a few companies that were harmed by the elimination of the old technology, incumbents mostly adopted and benefitted from it as well. The ‘distruption’ allowed the pie to grow and enhanced the sport for both amaturs and professionals. Am I missing something in how this could be deemed both distruptive technology – i.e. completely replacing the prior, but at the same time not creating obsolescence, failure or inferiority?

@140

Your idea seems appealing in many ways but I am hesitant to break up communities/local cultures. These people may not want to just move to a completely new environment. Is there anything we can do to help them find employment near their social/family networks? I would support a huge infrastructure building program. Hardly a new idea I know but there are lots of useful things we could be building.

This is why providing job training for layedoff factory workers is just not good enough. Very few people can make the jump from assembly line worker to public relations consultant or whatever.

Sure. This is a side issue, but it doesn’t work very well even when it works.

“Here’s a high-paying job. We estimate there will be 2000 new people hired doing this work by the time you are trained, so we will train 5000 unemployed people to do that job. The best of you will take jobs away from people who’re doing them now, by getting lower pay.”

@146
100% right, 0% wrong.

Somewhat counterfactually, “disruption” could be public entrepreneurship on behalf of expanding the scope of the commonwealth, using or reviving “the language of public trust, public interest, public service.”

It doesn’t always have to be in the direction of “privatizing” wealth and socializing losses.

We don’t have to look on, as at a car wreck, and say, oh well, accidents will happen. We could greet a financial crisis, for example, with a determination to exercise the bob mcmanus option.

I find I agree with almost everything Plume says. I don’t think we can actually do away with hierarchy in the economy or wipe social domination out of the genome, but we can oppose it, and in opposing, tame it. The political pathology of our times isn’t the strength of the right so much as it is a product of the weakness of the left. Many of the impulses that seem to threaten the survival of civilization do so, only because they are so little constrained. They are part of a natural ambivalence in human nature, and useful when constrained and compromised.

“The only reason to give “advice” of this sort is to tell a story about how awesome you are, and to leave the idea unsaid but hanging out there that anyone whose job prospects are terrible deserves it.”

Well said!

142, the history of the development of the graphite club seems to me to be a classic instance of incremental innovation. First you have wooden shafts, then in the twenties you have steel shafts which simply replace wood and do not call for any redesign of the club, then in the seventies you get the flex, parallel tip shaft which is especially designed for metal – which means that wood and steel shafts are no longer inter-substitutable – and finally you get experiments with less weighty shaft materials, like aluminum, until the kinks were worked out of graphite. There wasn’t, in the meantime, a whole lot of change in the courses or the game. According to wikipedia, the number of people playing golf twenty five times a year has actually decreased since 2000.
The result of incremental change can be largescale change, but the problem with the disruptive model is it picks one event out of a series of events and ignores the other events in the series, as well as the structures – which are themselves constructed – in which the event takes place. Is the graphite shaft more revolutionary than the parallel tip shaft? How could it have even happened if it weren’t for the former change?

Like a lot of bad ideas, I think “disruption” might have been popularized by Neutron Jack Welch, who boasted of taking a staid, reliable, R&D-based, manufacturing company (GE) and turning it into something exciting (a stack-ranked, financial/insurance company with permanent floating layoffs), and is said to have whispered to his successor Immelt, “Blow it up!”

“You’re against public libraries? Really!?”

Hmm. I read him not as being against public libraries but as saying that building libraries doesn’t solve the problem of social mobility.

/likes libraries
//also buys WAY too many books.

Europe has no libraries, really? Germany spents over a billion a year on them (not even counting the scientific ones which are open with no charge to non students)

“He wrote that public libaries were buildings that could serve a million better purposes. A million sounds pretty “against” to me.”

Good point. I probably read him wrong.
/Still likes libraries.

I spent all my summers growing up spending a lot if time in the public library. It was great. Of course, where I should have been was in school. As a result of the policy choice of public libraries and summers off school, poor kids fall behind and the rich (like me) have a parent or nanny at home to drop them off at the library.

And when in the past I commented that libraries were ubiquitous, I was corrected by several international people. And I think they were basically right: the American obsession with a public library in every town is unique and down to the benevolent choices of one of the most powerful men in the history of the world who decided he knew best and bought the right to spend my tax dollars.

Libraries are great! They are where homeless people apply for jobs and health insurance. But they are an example of private money inefficiently and artificially directing the spending of public funds. On process alone they are horrible. And when you think about a century of opportunity cost that could have been spent democratically, really it’s too bad.

I feel the same way about disease charities and their awareness campaigns. I’m not pro-breast cancer. But private money created a demand for a lot of public money to be spent on mammogram for perfectly healthy young women. When you look at the science: false positives, no change in survival down to early detection, and you remember that a certain percentage of surgery patients die from complications, you realize the net effect is actual an increase in deaths. If we are going to kill people with public funds, at least we could vote on it, yes?

Thanks to those who thought the best of my unclear writing, but on balance, despite the great memories, I think I am against public libraries.

> Are business leaders throughout all sectors preaching this idea of disruption
> brings salvation? The business people I’ve worked with have not shouted out this
> buzz-word to their audiences at the corporate meetings. If
> academics/writers/b-school visionaries are preaching this gospel of
> disruption = salvation, then how silly!
In Silicon Valley, this buzzword is all the rage now.

> Perhaps this is why our economy is in the toilet now…
At Harvard Business School, it is even worse. If you dare suggest that the theory of disruptive innovation is old hat, just old stuff, Christiansen (pronounced sometimes with accent on “Christian”) and his acolytes will not just disagree with you, they will actually punish you.

In an indirect way, it is indisputable that this is why the economy is in the toilet. These fellows as well as many other professors who have acquired their own little kingdom of minions won’t let any actual research get done at the Business School. Business research is chiefly about monkeys throwing c**p at the disciples and leaders of rival factions.

Speaking of Dylan Matthews in Vox, he has another article where he uses the language of disruption to argue on behalf of prison abolitionism. (House arrest disrupts prison, basically.) Which aside from being an interesting idea, I think shows that disruption doesn’t really have to be a dehumanizing way of thinking about things.