Disruptive Innovation through Sustainability

by Terence Jeyaretnam

James Moody, one of our leading fellow engineers, in his latest book The Sixth Wave (www.sixthwave.org) builds a solid case for the next wave of innovation “since the industrial revolution, the tide of progress has ebbed and flowed: five distinct waves, each starting with disruptive new technologies and ending with a global depression, have transformed our industries, societies and economies almost beyond recognition. We are now on the cusp of another massive transformation – the sixth wave”. Moody describes the next wave of innovation being driven by resource efficiency, impacted by limits on availability, and pollution, and ‘turbo-charged’ by clean technology; a new era of de-coupling resource use from economic growth.

On face value, this seems like a sound idea, but most would struggle to put a short timeframe around this transition.  After all, you would argue that significant limits to growth are still not apparent. That may be true if one takes a risk-based view.  But, it is quite different if you consider the opportunities that prevail as this ‘wave’ manifests.  

There are two types of innovation – ‘sustained innovation’, that is innovation that allows higher yield, but not necessarily one which creates new markets or value networks, unlike the game-changing ‘disruptive innovation’, which displaces old markets.  The best evidence for any new wave in emergence is in disruptive innovation surfacing.  Sufficient levels of disruptive and sustained innovation will, in time, deliver a tipping point for the new wave to be recognized and more widely embraced.  So, is the sixth wave starting to cut-through, and can we see it in examples of disruptive innovation?

The answer is all around us.  You simply have to look at the definition of disruptive innovation in Wikipedia.  It suddenly occurs to you that the wave is already upon us, for Wikipedia itself is an example of disruptive innovation, so it says happily.  Wikipedia replaced the former market leader, Encyclopedia Britannica when, after 244 years, Encyclopedia Britannica ended print production due to the success of Wikipedia.  This happened through disruptive innovation that combined factors of price, content, access, multi-way engagement, resource efficiency and non-profit collaborative consumption models.

The more one looks, the more examples of new business models one sees surfing the sixth wave.  These include share cars, e-retail businesses, desk-top publishing, e-mail, e-cards and e-marketing, LEDs, hybrid cars, recycled paper, istock for photos, Dropbox and freelance websites.  The list continues, and the common theme across these appear to be technology allowing resource efficiency and therefore price/value, choice, market efficiency and convenience to be re-positioned in a new market paradigm.  As the wave takes shape, there will be both sustained and disruptive innovation opportunities for all businesses – but not all businesses will survive as they fail to see the coming change. Would yours?

Terence Jeyaretnam is a Director of Net Balance (terence@netbalance.com), 
one of the world’s leading sustainability advisory firms.
Terence is based in Melbourne.