Does it disrupt? Shifting from hyperbole to accuracy with AI

Dear Friends,

“Will AI disrupt legacy education systems?”

“Will AI disrupt the job market?”

“Will AI disrupt defense?”

These tantalizing questions and hundreds more like them splash across headlines every day. It’s no surprise, given that generative AI is bringing about increasing change in nearly every facet of life. 

Need a taco recipe? Ask Chef AI. Need to write a book chapter by the end of the day? Ghostwriter AI is by your side. In the mood for friendly conversation? Well, we could spend an entire newsletter just on AI companions…But here’s the thing. There’s a basic yet critical tenet within Disruptive Innovation Theory that’s often either unknown or overlooked, and therefore leads to labeling something disruptive when it’s not.

Here it is: technology is not inherently disruptive. Put differently, a disruptive innovation is not a breakthrough technology.

So, AI? Not disruptive.

But if AI isn’t disruptive, then what is? The theory, along with Michael Horn , co-founder of the Institute, offers a great answer. In short, determining disruptive potential relies on the business model in which the AI is used, as well as its competitive impact on existing products and services in various markets.

In other words, to be disruptive, an innovation must:

1. Initially take root among people who can’t access (because of skills, time, money, etc.) the dominant products or services in a given market. From there, it improves until it begins to displace those dominant products or services.

2. Be disruptive relative to something else.

3. Not be “sustaining.” Sustaining innovations help existing products and services improve over time. They’re incremental or breakthrough improvements to a product or service that maintain the current trajectory of competition and are typically targeted at customers who want better performance from a product or service. This is why they’re often sold for more money and at higher margins.

To recap, what makes something disruptive or not hinges on where the technology is used in relation to a product or service’s business model. Is it allowing a low-cost, convenient, or simple value proposition to take root [disruptive]? Or are we deploying the technology in an existing business model to improve what we’re already offering [sustaining]?

Neither one is wrong. Neither one is better than the other. They just have different impacts on the market. One sustains the current trajectory of improvement. The other disrupts it.

Here’s a great example of AI as a sustaining innovation versus a disruptive one: Amazon, Apple, Google, Meta, and Microsoft are largely using AI as sustaining innovations to improve current offerings. For instance, Apple’s efforts in AI have been largely proprietary, utilizing traditional machine learning models for tasks such as recommendations, photo identification, and voice recognition, but none have had a significant impact on Apple’s business yet.

In terms of tech giants, the biggest risk at the moment seems to be for Google—namely that AI is upending its search-based business model through an offering that, yes, isn’t as good initially as Google Search but is also something that Google can’t monetize and that reliably and rapidly improves.

And in one of the clearest cases, Julia Freeland Fisher has identified AI companions as disruptive relative to human connection. You can watch an overview of why in her first video here, or take a more nuanced look into the disruption of our networks (and, subsequently, job options and opportunities) in her latest video here.

Heather Clayton Staker , an adjunct fellow at the Institute who specializes in K-12 Blended Learning, demonstrates how the rise of AI-powered online apps for instruction is disrupting the teaching profession. “It’s giving rise to a new wave of global knowledge distribution with increasingly dependable accuracy and precision, allowing for mass learning at unprecedented speed and scale,” she argues.

Stay tuned as we continue to identify AI’s disruptive potential in various markets and fields.

What are some of the ways you’re seeing AI demonstrate disruptive potential? What about sustaining? We’d love to hear your thoughts!

As always, connect with us, tag us on LinkedIn, or contact Meris Stansbury , senior director of communications: meris@christenseninstitute.org.

All our best,

The Christensen Institute team

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