Got your creative destruction right here, and what a gale of it

Lynne Kiesling

The ever-interesting Alexis Madrigal notes that Motorola and RIM called; they want to go back to 2004 and try again. Do they ever! Remember the first RAZR flip phone (in pink, even!) and the power image associated with being tethered to your Crackberry? And the profits for Motorola and RIM that accompanied them?

What happened to these once-awesome outfits? There are a lot of things you could point to over the last eight years, but no single event had as big of an impact as the launch of the iPhone in 2007. …

Much as you can call attention to their strategic missteps, these companies ran into a world-historical movement in technology that Apple ushered in and then dominated. No matter how good you were in 2004, you needed to start over again during 2007. Not many companies are going to surf that kind of wave.
Even the guy who coined the term “disruptive innovation”, Harvard Business School’s Clayton Christensen, couldn’t recognize the iPhone as such.
Nor can even the best informed analysts recognize what will come next, which raises the important competition policy point — Apple’s disruptive innovation and the ensuing creative destruction has created substantial market share and profit for Apple while creating great consumer surplus. We don’t know what will come next, but that lure of the combination of creativity and profit will generate more disruptive innovation. Some may occur within Apple, but more is likely to occur elsewhere. You can say the same for Google.
I’d also like to give a plug for Alexis’ book Powering the Dream: The History and Promise of Green Technology. It’s on top of my to-read pile for June, and the browse I’ve had through it has really whetted my appetite. If you are interested in history, energy, and technology (and if you’re here I suspect that description fits you!), it’s worth checking out.
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One thought on “Got your creative destruction right here, and what a gale of it

  1. Can’t have happened. I have it on good authority (Paul David and Brian Arthur, cited almost a thousand times by other scholars) that we’re locked in to, path dependent on, yesterday’s technology.

    A federal judge even said that Apple isn’t a competitor to Microsoft, because there was an ‘applications barrier to entry’. There were then (about ten years ago) already 70,000 apps for Windows…how could anyone overcome that headstart?

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