A disruption framework

One of the fundamental dilemmas of modern society is the unpredictable and problematic effect of rapid technological development. Sometimes the consequences are momentous not only on the level of a firm, but also on the level of an entire industry or society. This paper provides a framework to understand and assess such disruptions with a focus on the firm and industry levels. First, we give a generally applicable definition for a disruption as an event in which an agent must redesign its strategy to survive a change in the environment. Then we construct a layered model that spans from basic science to society and enables a systematic analysis of different types of disruption. The model also helps in analyzing the spread of innovations both vertically between layers and horizontally between industries. Thirdly, we introduce three main threats that may lead to a disruption and four basic strategies applicable when a disruption occurs. Finally, the framework is used to study four cases: GSM, GPS, the digitalization of photography, and 3D printing. The main contribution of this paper is the simple yet expressive model for understanding and analyzing the spread of industry-level disruptions through several layers and between industries.

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