Innovative business models: the ambush of disruptive technologies on business

Abstract

The purpose of the study was to interrogate how the development of ICT particularly in Web 2.0, Social Media, Mobile Computing and Cloud Computing has impacted the way businesses function and the consequences to these businesses if they do not respond appropriately. These pervasive technologies are described as disruptive technologies which are new technologies that unpredictably dislodge established technologies. The status quo and functioning of small businesses across various sectors will be significantly impacted by these technologies. Disruptive technologies are adopted easier by the corporate sector because of their capacity to do so and these could become technologies of competitive advantage. The Small Medium and Micro Enterprises (SMME) sector on the other hand might lack the same capacity to readily respond to technological innovation. This could cause a tension between them and the corporate sector and if they do not respond appropriately, they might experience significant losses. Design changes creative ideas into novel products, services and systems. Design connects creativity to innovation and has the ability to substantially improve brand image, sales and profitability of a business. Creativity and design have distinct roles in innovation and the broader business performance context with design appearing as a key differentiator for businesses. Design progressively plays a new role, one of competitive advantage and differentiator, establishing new markets by linking technology with commercial and user concerns. Digital Equipment Corporation (DEC) was an internationally renowned Information Technology (IT) enterprise in the 1970s, largely due to its strong and brilliant management team. When the minicomputer manufacturer started spiralling downward in the 1980s and eventually collapsing in 1988, its demise was ascribed to the incompetence of the once lauded management team. The reason for the implosion of the minicomputer industry was not just the rise of the personal computer, but what the personal computer represented: a disruptive technology to which the minicomputer companies could not respond. This qualitative research project involved a literature analysis focussing specifically on the business modelling and systems design aspects in the deployment of said disruptive technologies. The literature indicates that from a business perspective, technology can be broadly categorised into two classes, namely sustaining and disruptive technologies. Sustaining technology depends on gradual improvements to conventional technology. Disruptive technology is unsophisticated, lacks performance due to its novelty, appeals to a narrow audience, and may not yet have a tested practical application.