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A Brief History of Disruptive Innovation, Part I

· August 7, 2013

This post is Part I of A Brief History of Disruptive Innovation. Part II can be found here.

For thousands of years, beginning around 10,000 BC in the Middle East, humankind embarked upon its first disruptive revolution. Until that point, humans had roamed the earth in hunter-gatherer societies, foraging for food. When ancient humans discovered farming, and began settling permanently, in one place, advancements in agricultural technology led to a surplus food supply, which in turn, led to surplus time. The result was unprecedented innovation, and explosive technological, economic and social development — hallmarks of recorded history. Still, the neolithic revolution is not without detractors. Jared Diamond, author of the famous “Guns, Germs and Steel,” posited in 2009 that the move from hunter gatherers to farmers was “the worst mistake in history.” Indeed, 12,000 years after the fact, the neolithic revolution has some serious retroactive detractors. While objections to farming’s impact are unlikely to impact our dependence on it, Diamond’s comments illustrate an important point — no innovation, no matter how obviously beneficial it might be, is immune from fierce criticism. When detractors of disruptive innovation live to see them introduced, that criticism turns to active opposition. Throughout history, the forces of the status quo have conspired to impede progress, and prevent radical innovations from claiming market space.

Resistance to innovation is littered throughout history. Roman historian Pliny the Elder, as well as two other writers, tell of a radical inventor who brought a new type of glass before emperor Augustus. The glass was supposedly unbreakable; upon throwing it to the ground, various sources recount it bouncing, denting but not shattering. Augustus worried that the value of the glass would undermine the value of his gold and silver, so promptly ordered the man executed. “Flexible glass” or “vitrum flexile” was lost for almost 2,000 years, appearing sometime in the last one hundred years.* Thus, a single power holder, fearful for his immediate wealth, single-handedly suppressed an innovation for millennia. And that’s just the beginning.

Mike Masnick points to the 17th century French textile industry as an early innovation stifler. When the question of how best to handle innovative cloth buttons was brought to the “masters of the weaving industry,” (think an ancient MPAA) they produced the following verdict:

If a cloth weaver intends to process a piece according to his own invention, he must not set it on the loom, but should obtain permission from the judges of the town to employ the number and length of threads that he desires, after the question has been considered by four of the oldest merchants and four of the oldest weavers of the guild.

The legacy weavers had a stated goal of maintaining the status quo, which meant that very few innovations were approved. Once the anti-innovation precedent had been established, the button makers guild, our incumbents, joined the fray, furious that certain tailors had made buttons out of cloth. The government reacted in accordance with the legacy button industries, imposing a steep fine on tailors who insisted upon using cloth buttons. However, the button guild maintained that the fine was insufficient. Following further lobbying attempts, they won the right to search homes, wardrobes and passerby in order to locate the offensive buttons. Violators were fined and arrested. While today, consumers may purchase a wide variety of buttons, the French weavers set a dangerous precedent: businesses which feel threatened by new competition turning to government to crush the opposition, rather than innovate themselves.

The French government, in their suppression of Calico cloth, went further still. George Smith tells of delight at a new, cheap technology, which produced a cloth which was printed, rather than dyed. This new cloth changed the economic landscape in France, as eager consumers demanded the new cloth, importing it in droves. However, the artisan weavers grew concerned over their new competition, and, rather than innovating themselves, asked the government to clamp down on printed cloth, claiming it would “destroy the French economy.” The government complied, banning printed-cloth for decades, and executing dissenters. Smith claims that in the struggle to rid France of Calico cloth, 16,000 people were killed between executions and armed revolt. Sadly, the French suppression of printed cloth illustrates another paradigm in the history of disruptive innovation: governments, by targeting innovators, shoot themselves in the foot. A paper commissioned by the London School of Economics asserts that the French had possessed the potential to become global leaders in the textile industry, but the ban on printed cloth severely inhibited that industry’s development. Thus, by complying with the demands of incumbent cloth weavers, France not only hampered consumers, but set back their economic development.

The French were not alone in their suppression of disruptive innovation. While Gutenberg’s printing press spread like wildfire in Europe, its adoption was slower in other parts of the world. British historian Richard Clogg chronicled an exchange of letters between Sir Joseph Banks, a botanist and Scientific philanthropist, and James Matra, secretary to the British Embassy in Istanbul. Matra observed that Ottoman books were extravagantly priced, which barred ordinary people (described as “desirous of acquiring knowledge”) from procuring them. Moreover, the book scribes, fearful of a press in Istanbul (first set up by Jewish immigrants in 1493), attempted to “protect” their industry, and demanded that the Sultan suppress printing technology. The Sultan, having recently risen to power on the back of a coup, and fearing insurrection from the wealthy elite, complied. Thus, economic considerations amongst legacy scribes in the Ottoman empire successfully negated positive, consumer-friendly technological dissemination.

Economics is not the only justification for suppressing disruptive innovation. In the Ottoman Empire and other parts of the Muslim world, Francis Robinson argues that the printing press faced religious opposition. Ottomans did not resist the printing press out of an aversion to science but because, Robinson asserts: for some, the divine nature of the Quran was rooted in a rich history of oral tradition .According to Robinson, when the Egyptian standard edition was eventually compiled in the nineteenth century, it featured a study of the fourteen various methods of oral retelling. The printing press represented an ultimate, cultural disruptive technology to Islamic civilization. However, after four centuries of outright suppression of the printing press by authorities (such as the Sultan who James Matra worked under), many of whom feared that their power lay in their absolute command of the oral tradition, various leaders in Southeast Asia began to adopting the press. Outside of the obvious ease at which ideas could now be spread, Robinson believes that the development of scriptural Islam helped strengthen the pan-Islamic sense of unity amongst Muslims across the world.

The phenomenon of inhibiting beneficial, disruptive technologies is not unique to the distant past. FM radio, now a standard staple in every car, stereo and music dissemination system, was strongly challenged when it first emerged in the United States. FM radio, technically superior to its AM counterpart, was originally developed in the US by Edward Armstrong, who worked closely with David Sarnoff, the CEO of the Radio Corporation of America (RCA). When Armstrong proposed that the RCA adopt FM radio, Sarnoff scoffed, which led Armstrong to start his own business geared at selling FM radios. Sarnoff, personally invested in the continued dominance of AM, lobbied the Federal Communications Commission to change the frequency on which FM was broadcast, after Armstrong had successfully sold 500,000 units. This move was ostensibly to free up room on the spectrum for new FM stations. Although they could be retroactively fitted with new adapters, most FM radios became obsolete, as the cost of replacement was too high for the fledgling FM industry. Consequently, the development of FM radio was set back for at least three decades. When Armstrong took Sarnoff to court over the matter, Sarnoff unleashed the substantial legal power at his disposal, leaving Armstrong destitute. After years of fighting and losing, Armstrong committed suicide. Although FM eventually entered into the American mainstream, enjoying a considerable golden age in the 1970s, its advancement was considerably delayed by Sarnoff’s resistance.

But anticipating and adapting to disruptive technologies yields good results. There was a considerable buzz in the early film industry over the advent of “talkies,” with cultural critics deriding the “death of the international language,” of silent film. Musicians who traditionally accompanied silent films, playing live, were furious that they would be out of business to “canned music.” Culturally and economically, non-silent films were billed as harmful to the industry and the world. Charles Chaplin, the iconic silent film star, feared for talkies as a threat to his art form and way of life. He resisted talkies for almost a decade, but he slowly adapted his style to accommodate vocals. In 1938, he produced and directed “The Great Dictator,” a satire of rising fascist Germany. The film’s climax features a speech, delivered by Chaplin dressed as Hitler, now dubbed one of the greatest in film history. Chaplin not only adapted to talkies; he mastered them, and serves a compelling example for the art disruption can produce, and the benefits of disrupted entities. Film enjoyed an unprecedented golden age, and continues to rake in record profits. Chaplin’s speech has recently enjoyed revival as a viral hit, which illustrates the multilayered disruption brought about by the Internet revolution. In A Brief History of Disruptive Innovation, Part II, I’ll survey important disruptive developments in more recent years.

*There is a dispute among scholars/bloggers over what exactly “vetrum flexile” was, so there’s disagreement about when it was “re-invented.”

Benjy Cannon is an intern at the Computer & Communications Industry Association. 

Competition

Some, if not all of society’s most useful innovations are the byproduct of competition. In fact, although it may sound counterintuitive, innovation often flourishes when an incumbent is threatened by a new entrant because the threat of losing users to the competition drives product improvement. The Internet and the products and companies it has enabled are no exception; companies need to constantly stay on their toes, as the next startup is ready to knock them down with a better product.

Innovation

New technologies are constantly emerging that promise to change our lives for the better. These disruptive technologies give us an increase in choice, make technologies more accessible, make things more affordable, and give consumers a voice. And the pace of innovation has only quickened in recent years, as the Internet has enabled a wave of new, inter-connected devices that have benefited consumers around the world, seemingly in all aspects of their lives. Preserving an innovation-friendly market is, therefore, tantamount not only to businesses but society at large.