The automotive industry has the potential to cause disruption across many sectors.
We hear the term “disruptive innovation” thrown around all the time – back in January, the Economist even described it as the business buzzword of the year. As with most words that fall into such common use, it means many different things to different people. I’d always assumed it referred to any breakthrough technologies that made good products or services even better.
In fact, the term and the theory, first coined by Harvard professor Clayton M. Christensen, means something much more specific than I had at first thought.
For Christensen, the term refers to an innovation that transforms an existing market or sector by replacing complication and high cost with simplicity, convenience, accessibility and affordability. By making existing products and services more affordable and accessible, they become available to a much wider population.
With the automotive sector – an industry well over 100 years old – some people believe innovation, disruptive or otherwise, has stagnated, at least for those companies that are as old as the industry. I think that couldn’t be further from the truth.
The first example of disruptive technology in the automotive industry was mass production of the Ford Model T. Before that, although vehicles were available, they were too costly to displace horse-drawn vehicles.
“ This industry has the potential to disrupt many industries, including steel, aluminium, mining and manufacturing.”
The automotive industry has continued to disrupt over the years, with the latest example being when the Ford F-150 full-size pick-up truck moved to an all-aluminium body from a standard steel execution.
It’s still not completely clear what the market will make of it, but if consumers embrace it, it has the potential to disrupt many industries, including steel, aluminium, mining and manufacturing.
Tesla is another example of a company disrupting the industry with their electric vehicles and sales strategy, neither of which have yet crossed the chasm of full acceptance.
But to build on the original understanding of disruptive innovations, I would say it is about more than just making products and services more accessible and affordable; it’s also about making products that integrate our lives more deeply and seamlessly.
Smartphones are an obvious example of this. The iPhone was ultimately disruptive because it integrated our lives, our families and our friends, in a way no one had envisioned but everyone was able to benefit from.
“ Apple saw beyond the way we lived and worked, but still used our basic needs and interests to drive their design.”
If you were asked to name the most disruptive innovation in the automotive industry, I bet there’s a good chance you would choose autonomous vehicles.
Forbes would agree with you – at the 2015 Consumer Electronic Show, they named autonomous vehicles the number one disruptor.
I’m not sure I agree. You see, simply making a technology available to a new set of customers or a new market will not cause the same impact as some of the previous disruptors.
To really make an impact, innovators will have to follow the path of the smartphone: they will need to integrate to disrupt.
This means integrating the future layout of cities with the design of autonomous vehicles, or the future health tracker with pharmacies’ blood screening results.
This article first appeared on World Economic Forum Agenda and was republished with permission.