A dynamic model of disruptive innovation in the space of market recognition: a high-tech perspective

Phillip A. Cartwright
Marketing Science Centre, Research International, United Kingdom; and eLab, INSEAD, Fontainebleau, France

Philippe Silberzahn
Digital Airways; and Management Research Center – Ecole Polytechnique/CNRS, France

PREFACE

This paper presents a model for understanding how markets can be created in the space of market recognition. In an earlier paper, Silberzahn, Cartwright and Buisson (2005) suggest the failure of incumbent firms in the face of a disruption can be ascribed to three broad causes: a failure to see the disruption, a failure to act upon it by developing radical products, and a failure to successfully launch these radical products.

The focus of this paper is on the first two causes: See and Act. We contend that failure owes to a 'mechanistic' view of see and act that assumes opportunities exist per se and that the job of market research is to identify them for the firm to act. Instead, we propose an alternative, 'organic' view of see and act that integrates them into a continuous process of market creation. Based on this, and drawing on insights from complexity theory, we propose a dynamic process model characterized by the Innovation Recognition Path (IRP). The IRP results from interaction between the innovator-entrepreneur, the marketing research and business intelligence roles and end-users that converge toward an equilibrium state corresponding to a new market. We then extend our thinking to include barriers to efficient information transmission and the role of judgment under uncertainty that might prevent equilibrium and lead to innovation failure. A role of marketing and business intelligence is providing information content and knowledge to match up the technology push and the customer requirements. Finally, based upon previous research and experience, we believe our model, the IRP and the causes of market failure, have relevance beyond the high technology sector where disruptive innovations occur. We have focused on high technology owing to the depth of our joint experience in this area.