The current hot phrase among innovators is disruptive technology. Instead of merely improving on an existing technology, a market disruptor completely changes the way an industry operates.
For a current example, look at the explosive growth in streaming and on-demand media. The concept and new capabilities have blurred the lines between Internet service providers, content providers, telecommunication companies, and computer/technology companies. Nobody is quite sure how it will shake out, but media consumption will certainly never be the same.
What are the top five products that revolutionized industries? It's almost impossible to get consensus. We came up with the following top five products by limiting the focus from the 1900s to present (ignoring things such as the cotton gin and the Gutenberg printing press) and focusing on physical products instead of service providers. Feel free to let us know which products we may have missed.
- The Model-T – Henry Ford's assembly line innovation and the concept of interchangeable parts made mass production of affordable cars possible. Ford introduced production efficiencies that allowed manufacturers to take full advantage of the economy of scale. Ford also focused on the important elements of customer-based design without sacrificing efficiencies, as in the famous quote, "Any customer can have a car painted any colour that he wants so long as it is black."
- The Transistor – Bell Labs' invention of the transistor opened a new era in communications. By replacing clunky and unreliable vacuum tubes, the transistor introduced portability as well as greater reliability into communications products. Arguably, the transistor radio started the information age, providing cheap and nearly instantaneous communication through radio stations throughout the world.
- The Microprocessor – The next step in the evolution and use of transistors led to the microprocessor. Intel engineer Ted Hoff had the original concept of creating a transistor network to make a self-contained mini-computer (the central processing unit, or the essence of today's computer chip). By allowing computations at speeds never before imagined, the microprocessor allowed increasingly powerful computers to be created. This in turn gave powerful tools to researchers and engineers to solve problems that previously had been too complex even to be addressed.
- Personal Computers/User Interfaces – It's easy to start a spirited argument about who should be credited with inventing personal computers and the GUI (graphical user interface) that took computers out of the purely scientific realm and made them available, understandable, and usable to the average person. Within a few years, computers went from being convenient to being essential.
- Smartphones – Smartphones are the next logical progression in mobile computing. The smartphone, starting with the iPhone, blurred the lines between a simple mobile telephone and a computer. We'd bet that most people's primary use of smartphones is not to make phone calls, and calls may not be in the top five.
Consider the symbiotic relationships in all these developments. Important industrial principles that made transistors, microprocessors, computers, and smartphones capable of mass production have their genesis in Henry Ford's process.
If the focus were put on companies, there would be many recent disruptors from which to choose. For example, both Wal-Mart and Amazon qualify for finding new and more efficient distribution and sales models and changing the face of retail sales, each in their own way.
We have no idea what disruptive technologies await us over the next few decades, but there's only one thing we can predict with certainty — disruptive technologies will continually be invented. Those who can identify them correctly and invest in them at the early stages will do well.