The Need for Disruptive Innovation (part 1)

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At a recent liberal think tank in Montreal, speakers warned of possible very bad times ahead for Canada.  This was reported in an Ottawa Citizen column by Dan Gardner entitled “We’re facing a grim future“.

Rick Miner, formerly president of Seneca College correctly acknowledged that Canada is moving from a labour to a knowledge economy. This coupled with an aging population, and an educational system ill equipped to deal with the realities of the future Canada, could lead to the puzzling dilemma of millions of citizens out of work at the same time as there are millions of jobs without people to fill them.

David Dodge, former deputy finance minister and Bank of Canada Governor painted an even more bleak picture of future Canada with a health care system that will bankrupt the country.  Our overall productivity needs drastic improvement if we are to survive.

Since the room was filled with all the movers and shakers, you might have expected some potential solutions to all these problems being proposed.  The column ends with an overheard comment from the former New Brunswick premier Frank McKenna to former prime minister Paul Martin – “we’re f***ed.”

Ok- so no help there.  Let’s discuss “disruptive technology” as part of the solution to some of these problems.

This terminology was first coined by Harvard Business School professor Clayton M. Christensen in 1995 to describe a new technology that unexpectedly displaces an established sustaining technology.  Sustaining technologies usual rely on incremental improvements, while a disruptive technology may come from something that wasn’t even designed for how it is finally used.

For example, Bell was trying to help deaf people when he invented his “electrical speech machine”, and who could believe this nonsense about sending voice over copper wires anyways.  Yet, today, we have telephones world wide, and you seldom hear of telegraphy, outside of some older ham operators.

Christensen later changed this terminology to “disruptive innovation” as it was not so much the technology as the use of that technology that was important.  He defined “disruptive innovation” as ” allowing a whole new population of consumers access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill.”

When you think about it, you know this to be true.  The very first computer I used in the late 50s was a Bendix G15-D. It required it’s own room, air-conditioning unit and weighed more than a human could lift. Today my wife has a netbook she can carry in her purse and check her grandchildren’s photos on Facebook at the local coffee shop.

Do you remember the very time you saw Visicalc running on an Apple, or the windows/mouse interface on a Lisa?  Ok so some of you might not even have been born yet… but when I saw them, I knew something had changed. Visicalc automated the accountants paper spreadsheet, and turned the microcomputer from a hobby box to a business tool.  The graphical interface on the Lisa eventually morphed into the touchscreen interface of the iPad.

Ten years ago, could I have predicted that I would have a video production studio on a portable laptop that I could carry around and communicate wirelessly with the internet.  Internet – what was that?  Yet today, I use the same video processing system as the Coen Brothers to make “films”.  And today – I do make films.

I remember a CIPS talk I attended in Ottawa – where Douglas Mulhall (author of “Our Molecular Future” predicted there was “grain” in our future (i.e. the future of IT professionals).

  • G – Genetics
  • R – Robotics
  • AI – Artificial Intelligence
  • N  – Nanotechnology

While none of these seem to be “yet another payroll program”, they all involve “information processing” of one sort or another.

I was invited to attend the TEDx Carleton U conference in Ottawa.  Maria DeRosa – Assistant Professor – department of Chemistry illustrated the convergence of Genetics and Nanotechnology to solve a critical future global problem.  The problem – how to accomplish the 70% increase in food production required to feed the predicted number of humans who will be on this planet in the next 50 years ( and 1 billion people go hungry today – that’s 33 countries the size of Canada going hungry now)

The sustaining technology solution is to dump more fertilizers on our farm land, increasing crop sizes.  But this causes a leaching of nitrogen into our waterways, effectively polluting and killing off life in our waterways.  Now if there was some way, to use less fertilizer, make it “intelligent” and deliver it directly into the plant roots.  This would not only reduce the cost of the fertilization and increase crop size but eliminate the pollution of our waterways.

So if you could manufacture a nanobot that could detect when a plant needed nitrogen, release the nitrogen encapsulated in a bit of appropriate DNA in a way that the plant immediately captures the released nitrogen, then problem solved.  How this was done was her presentation and is a great example of disruptive innovation available in Canada.

Hey – that isn’t information processing – is it?  Think about this.  The first computers I used required you enter code in binary via switches on the front panel.  Later you entered this data via assembly code on a paper tape, and an “assembler program” converted it into the binary require by the machine.  Later we developed “higher level” and “specialized” languages, when the “compilers” became available.  This launched the building of “compiler generators” so we didn’t have to write a new compiler every time we invented a new higher level language. As we went up through the higher levels of abstraction, we didn’t need to worry about the details at a lower level.  Eventually we get to a levels where the construction of a DNA sequence, which is merely encoded information, can be accomplished, sort of like throwing binary switches on that early computer.  The lower information processing parts start to become invisible, and a technician in a lab supported by appropriate machinery can assemble the very basic parts of what makes up all life on this planet.

In May of 2008, the Gartner Group made a prediction for the top 10 disruptive technologies out to 2012

  • Multicore and hybrid processors
  • Virtualisation and fabric computing
  • Social networks and social software
  • Cloud computing and cloud/Web platforms
  • Web mashups
  • User Interface
  • Ubiquitous computing
  • Contextual computing
  • Augmented reality
  • Semantics

Many of these we are already seeing.  My laptop had multicore and 64bit processing.  Social networks and social software are running wild.  Cloud computing and ubiquitous computing is on our doorstep.

Yet non of these technologies alone will necessarily mean that a disruptive innovation will take place.  However, the convergence of some of these technologies in a framework that solves some of Canada’s pressing future problems just might be the source of some of innovation we need to turn around that dismal view of the future presented at that think tank in Montreal.

Take David Dodge’s need to increased Canadian productivity.  The favourite sustaining technology way is to reduce the wages of the people who produce the product.  Today, the easiest way to accomplish this goal is to “outsource” the production to some third world country.

For example, in the clothing industry, they can not only reduce the expense of an item, they can charge 50-60,000% markup while their marketing teams are telling you they are reducing prices.   Although this might seem to increase the “productivity” of this one company, and the benefits to a buyer, it does so by dumping many workers into parking lots and destroying entire industries in Canada.

Now imagine putting some technology together where we take that process away from the mass production guys, and turn it over to an individual.  Step into a scanning machine, to get your measurements; pick some fabric and accessories, and some robotic based process cuts and sews the garment while you wait.  Make the price cheap enough that a small store could own one, and we bring the entire industry back into the hands of Canadians.

Too complex?  OK – how about something simple; something that will reduce the destruction of trees, reduce the amount of pollution being dumped into our air, and provide a system that small businesses could use at little or no cost. Don’t forget that small businesses (1-5 employees) make up the majority of businesses in Canada.

Where would you find such a solution?  Look no further than your lowly invoice.  We all receive and pay them, many of us in business generate our own.  I fact we probably use some sort of computerized system to generate them.  Myself I use Microsoft Word and Excel.  Others use more complex and expensive software.  But let’s examine the entire process end to end and look for ways of being innovative

I key in all my information and generate an invoice and any supporting documents and print them out. The paper output I fold, place in an envelop, seal and place a stamp on the letter.  I run to the nearest mail box and deposit it.  A truck comes and empties that box and drives the contents to the nearest sorting station.  The mail is sorted by hand and by mechanical means and is shipped by truck to the nearest post box near where it is to be delivered to.  A mailman, picks up the invoice and carries it to the business.  There staff open the envelop, sort it and pass it to accounts payable.  They re-key the information back into their system and process it.  If it can be paid, a request goes out for a paper cheque generation and the whole process then runs in reverse.  Across the country, millions of dollars are spent printing the paper, shipping the paper and re-keying the information.  Could we eliminate all this?  Could we then spent this savings on improving our productivity in other areas?

Clearly the answer is yes.  Clearly there are systems out there that do exactly that – but I would  contend that they are merely incremental extensions to existing software, not disruptive innovation.  My next blog will describe what would be the nature of a disruptive innovation to this particular problem.

But let me state that I think that there is no end of innovative ideas and people in Canada.  I think there is no need to face a bleak future as our leaders have pictured it.  So if our leaders only think – “we’re f***ked”, then my advice is – then at least get out of the way and start helping those of us who can fix things get on with a brighter future.  Where can you find us? – the parking lots of Canada are filled with us.

Hugh Chatfield Hugh Chatfield (13 Posts)

Degrees in Physics, Documentary Production. In Information Technology since 1965. In General markup languages since 1993. In Film projects since 2007. In Documentary Production since 2008. Follow my adventures at Hugh's World

  • Joel Martin

    Great insight. Canada has been a hot bed of innovation and saw a growth in the 80s and 90s that rivaled the U.S. But when acquisitions started happening either CDN co.s had no access to capital (see the US Fed and its very liquid lending from 99-05) or were not ballsy enough to compete. Now Canada (like EMEA) faces a gap in its ability to draw tech innovation both from the gov’t as well as from our educated youth. We loose to many people to the South and need to address this. Organizations like MARS and some of the BC tech funds are trying to address this, but the “Oil” centric federal gov’t has to step up to the plate before all is lost.

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  • Ron Van Holst

    Thanks for the link to the Christensen video, his books are great! I found this interesting video on competitiveness and resilience which discusses a stress test to project how nations will recover from this recession. If you download the paper, you’ll see that Canada ranks 16th overall, 26th in the dimension of economic forecast.

    So Canada needs to be the home of more disruptive innovations that generate wealth for our economy. I’d like to think that disruptive innovations are low cost solutions to problems utilizing disruptive technologies. Recall that Christensen’s market disruptors innovate from below with better value propositions, ‘good enough’ features/performance at a new price point that open up a new market. In this case, disruptive innovations may not even require Gartner’s disruptive technologies, maybe just a simple, clever and cheap solution.

    Hopefully the GoC will learn something when Industry Canada opens up their Digital Economy Strategy for public consultation.

  • Hugh Chatfield I.S.P.

    Any idea of when the Digital Economy Strategy is likely to be visible?

  • Hugh Chatfield

    My next article on Disruptive Innovation.

    The role of the Universal Business Language (UBL) and Tradeshift as an example of using UBL for disruptive innovation.

  • Brad Arnold

    LENR will probably be hitting the market this year! Clean, very very cheap ( says energy will be “too cheap to meter”), and the fuel is super abundant. Oh, by the way, oil sands is going to go belly up (too bad, so sad Canada). Here is a primer:

    “A volume about the size of a #2 pencil eraser of water provides as much energy as two 48-gallon drums of gasoline. That is 355,000 times the amount of energy per volume – five orders of magnitude.” ( ).

    This phenomenon (LENR) has been confirmed in hundreds of published scientific papers:

    “Over 2 decades with over 100 experiments worldwide indicate LENR is real, much greater than chemical…” –Dennis M. Bushnell, Chief Scientist, NASA Langley Research Center

    “Total replacement of fossil fuels for everything but synthetic organic chemistry.” –Dr. Joseph M. Zawodny, NASA

    By the way, here is a survey of some of the companies that are bringing LENR to commercialization:

    For those who still aren’t convinced, here is a paper I wrote that contains some pretty convincing evidence: