what is disruptive technology 
disruptive technology is an innovation that significantly alters the way that consumers industries or businesses operate a disruptive technology sweeps away the systems or habits it replaces because it has attributes that are recognizably superior recent disruptive technology examples include e commerce online news sites ride sharing apps and gps systems in their own times the automobile electricity service and television were disruptive technologies investopedia nono floresdisruptive technology explainedclayton christensen introduced the idea of disruptive technologies in a 1995 harvard business review article 1 christensen later expanded on the topic in the innovator s dilemma published in 1997 2 it has since become a buzzword in startup businesses that seek to create a product with mass appeal even a startup with limited resources can aim at technology disruption by inventing an entirely new way of getting something done established companies tend to focus on what they do best and pursue incremental improvements rather than revolutionary changes they cater to their largest and most demanding customers this provides an opening for disruptive businesses to target overlooked customer segments and gain an industry presence established companies often lack the flexibility to adapt quickly to new threats that allows disruptors to move upstream over time and cannibalize more customer segments disruptive technologies are difficult to prepare for because they can appear suddenly risk taking companies may recognize the potential of disruptive technology in their own operations and target new markets that can incorporate it into their business processes these are the innovators of the technology adoption lifecycle other companies may take a more risk averse position and adopt an innovation only after seeing how it performs for others companies that fail to account for the effects of disruptive technology may find themselves losing market share to competitors that have discovered ways to integrate the technology blockchain the technology behind bitcoin is a decentralized distributed ledger that records transactions between two parties it moves transactions from a centralized server based system to a transparent cryptographic network the technology uses peer to peer consensus to record and verify transactions removing the need for manual verification the automobile electricity service and television all were disruptive technologies in their own times blockchain technology has enormous implications for financial institutions such as banks and stock brokerages for example a brokerage firm could execute peer to peer trade confirmations on the blockchain removing the need for custodians and clearinghouses which will reduce financial intermediary costs and dramatically expedite transaction times investing in companies that create or adopt disruptive technologies carries significant risk many products considered disruptive take years to be adopted by consumers or businesses or are not adopted at all the segway electric vehicle was once touted as a disruptive technology until it wasn t investors can gain exposure to disruptive technology by investing in exchange traded funds etfs such as the alps disruptive technologies etf dtec this fund invests in a variety of innovative areas such as the internet of things cloud computing fintech robotics and artificial intelligence 3