Understanding Disruptive vs. Radical Innovation

April 29, 2021

The art of innovation has been a subject of interest, research, and action for a long time (at least 40 years). While business models across industries advance and innovation takes various shapes in technology stacks, mindsets, organizational structures, and more, a group of researchers from RWTH Aachen University—Christian Hopp, David Antons, Jermain Kaminski, Torsten Oliver Salge—took a 40-year-long dive into understanding two distinct areas types of innovation: disruptive and radical.

“While disruptive innovation is inextricably linked to variations of business models and low-end market encroachment, radical innovation is reliant on organizational capabilities and individual & organizational human capital. Whereas incremental innovation helps firms to stay competitive in the short term, radical innovation focuses on long-term impact and may involve displacing current products, altering the relationship between customers and suppliers, and creating completely new product categories. In doing so, firms often rely on advancements in technologies to bring their firm to the next level.” – What 40 Years of Research Reveals About the Difference Between Disruptive and Radical Innovation

Pick #1. What 40 Years of Research Reveals About the Difference Between Disruptive & Radical Innovation

“Disruptive innovation research describes a process in which new entrants challenge incumbent firms, often despite inferior resources. This may happen in two ways. Entrants may target over-looked segments of the market with a product considered inferior by incumbents’ most demanding customers and later move up-market as their product improves. Or, they may create markets where no market exists and turn non-consumers into consumers. Importantly, the research landscape we mapped out suggests that disruption is not about technology alone but rather the combination of technologies and business model innovation.

“Radical innovations, on the other hand, stem from the creation of new knowledge and the commercialization of completely novel ideas or products. Research on radical innovation, therefore, focuses on the types of organizational behavior and structures that explain and predict the commercialization of breakthrough ideas.

“To be disruptive, a business must first gain acceptance in the low end of the market, the segment by and large ignored by incumbents in lieu of more profitable high-end customers.” – What 40 Years of Research Reveals About the Difference Between Disruptive and Radical Innovation

Read the full article by the researchers from RWTH Aachen University at HBR.


Pick #2. Santander Launches the First Blockchain-Based International Money Transfer Service Across Four Countries


Banco Santander launched a new international payments service using blockchain-based technology. The service is available to retail customers in Spain, the UK, Brazil, and Poland; it will be rolled out across more countries in the coming months. The new service uses xCurrent, a technology based on distributed ledgers owned by Ripple.

The new service, known as ‘Santander One Pay FX,’ allows customers to complete international transfers on the same day in many cases or by the next day. The service also shows them the exact amount that will be received in the destination currency before they make the transfer.

With the launch of the service, Santander will become the first bank to roll out a blockchain-based international payments service to retail customers in multiple countries simultaneously.

Read more.


Pick #3. Chinese Authorities Nab Fugitive in a Crowd of 60K Thanks to Facial Recognition AI


A Chinese fugitive was arrested after an AI-powered facial recognition system alerted authorities to his presence in a crowd of 60,000 people attending a pop concert. Welcome to the age of robot snitches.

Chinese authorities have entirely embraced facial recognition systems and AI-powered surveillance monitoring: if you’re out in public in China anywhere, a camera can see you, and you’re being identified by AI and tracked in real time. If you get caught jaywalking on camera, you’ll be texted a fine. If you don’t pay the fine, your ‘social credit’ score will drop, and you can be banned from public transportation, car rentals, airports, financing options, and making large purchases, among a myriad of other punishments.

Read more.

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