Incremental vs. Disruptive Innovation: Differences and Impact | CPI (2024)

“Move fast and break things.”

Mark Zuckerberg’s Facebook motto became aSilicon Valley catchphrase that encapsulated the disruptive entrepreneur mindset. However, being adisrupter is not the only way to innovate.

We’ve already picked apart what defines invention versus innovation, so here, we are going to explore the differences between disruptive innovation and incremental innovation.

Let’s start by clearing up any potential misunderstanding. Disruptive innovation was coined by Clayton Christensen nearly 30years ago in his book ​‘The Innovator’s Dilemma’. As the Christensen Institute states: ​“Disruptive Innovations are NOT breakthrough technologies that make good products better; rather they are innovations that make products and services more accessible and affordable, thereby making them available to alarger population.”

By contrast, incremental, or sustaining, innovation is where gradual improvements are made to existing products or processes. These changes are often relatively low-cost but help abusiness to differentiate itself in crowded markets.

Disruptive innovation starts small

Typically, disruptive innovation comes when companies see an opportunity to enter amarket. It can take two forms. The first is ​“new-market disruption”, which occurs when an entirely new market is created. The second is ​“low-end disruptive innovation”, which happens when asmaller company enters at the bottom of an existing market and grows using alow-cost model that offers more affordable variants of existing technologies or services. After establishing itself, it can then graduate to competing at the higher end of the market.

Netflix is heralded as ashining example of disruptive innovation. In 1998 Blockbuster dominated the film rental market, however Netflix saw an opportunity to reach movie buffs who didn’t want to schlep to astore and make achoice on the spot. The Netflix mail-order DVD system was slower, but it offered affordable, guaranteed choice and so captured asmall segment of Blockbuster’s market.

When Netflix diversified to online streaming at alower cost, the ease of access saw them outcompete Blockbuster – which eventually went bust in 2013. In contrast, Netflix now dominates the market and has Hollywood’s established film studios in its sights, thanks in large part to its policy of disruptive innovation.

Small steps still lead to ground-breaking innovation

The plight of Blockbuster may be acautionary tale, but that’s not to say that there is no place for incremental innovation.

For some businesses, regular, small changes are the best way to boost the value of their products or services. In the car industry, continuous improvements in fuel efficiency, safety features, and connectivity demonstrate incremental innovation. Similarly, requests to install software updates are also incremental innovations, adding new features and bug fixes to improve usability and give greater customer satisfaction.

This is probably best demonstrated by the iPhone, which has dominated the market for over 15years through gradual updates in line with technological developments.

Disruptive innovation in our industries

Biotech, like other industries, is no stranger to disruptive innovation. During the COVID-19 pandemic the vaccine industry was shaken up by the speed of mRNA vaccine development and roll out. They proved immensely successful in increasing immunisation coverage, providing booster doses and adapting to new variants. At CPI we helped build the UK’s capacity to develop mRNA vaccine candidates from the ground up as amember of the national Vaccine Taskforce.

This success has reinvigorated mRNA research. For instance, cancer vaccine trials are scheduled to begin in the UK later in 2023 using an mRNA-based therapy.

Disruptive innovation isn’t just exclusive to vaccines. CPI is working with several partners that are poised to make an impact in their markets. These include asustainable biopesticide based on spider venom that will reduce reliance on chemical pesticides and so give aboost to biodiversity, and aunique ultra-low-cost semiconductor technology that can be made in higher volume and is more environmentally friendly than siliconchips.

CPI’s involvement with anew treatment for inflammatory bowel disease (IBD) mainly focused on optimising the processes involved in its formulation and manufacture. Whilst this could be considered incremental innovation, the new drug could potentially revolutionise IBD treatment and become adisruptor as it offers asafer, less invasive, and painless option to those currently on the market for the 10 million people who live with IBD worldwide.

Innovating for sustained success

Both disruptive and incremental innovation play important roles in driving progress and growth. Disruptive innovation requires risk-taking and investment but brings revolutionary changes that challenge established norms. Incremental innovation focuses on continuous improvement, making gradual advancements that keep the products involved ahead of thecurve.

A balanced approach to both disruptive and incremental innovation is the best path to sustained success. Progress comes in many forms, and at CPI we work with our partners to support themall.

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