Disruptive Technologies

In this post I want to talk about disruptive technologies from an innovation perspective.

Disruptive technologies are innovations that replace an existing well-established product or process, the result being a dramatic shift in use. They completely replace and change the way we use or utilize technology because they have a better way to execute or better features that allow us to utilize the technology in new ways. As opposed to the typical ongoing development of technologies that slowly grow and affect us over time, disruptive technologies have a sudden, positive shift that requires us to adapt quickly to the new paradigm. Disruptive technologies have the potential to significantly affect us in positive, and sometimes negative ways.

What are a few examples of disruptive technologies?

The trans-continental railroad in the United States is a good example. Prior to the construction of this engineering marvel, a journey from St. Louis to San Francisco required a four-month, dangerous journey across the plains and western mountains by covered wagon. Or a six-month journey by boat from New York to San Francisco. The building of the trans-continental railroad cut that time down to less than a week at a significantly lower cost. It opened the western United States to settlement as well as provided an efficient way to move manufactured goods from coast to coast, helping to accelerate the industrial revolution.

Another good historical example of an innovative disruptive technology was the first trans-Atlantic telegraph cable. Prior to the successful dispatch of the first seabed cable, messages between Europe and America we carried by ship, taking a week or more. This severely limited US participation in world financial commerce as market information arrive too late to react. Success of the cable cut down communication time across the Atlantic to minutes, connecting New York markets to London and opening the financial world to the United States.

Or how about smart phones? Twenty years ago, when IBM introduced their “Simon Personal Communicator” did we foresee how smartphones would change our lives? Not only do our smartphones allow us to be connected almost wherever we go, but also connect us in ways I’m sure IBM engineers never imagined. They provide access to our email, text messaging, and a myriad number of social media platforms. They are our cameras, recording devices, gaming systems, and computers in our pockets. In the US, 85 percent of the adult population owns smartphones. They have disrupted the conventional phone system, computing markets, even the sale of hand calculators.

I believe microgrid technology and electric vehicles will prove historically to be disruptive technologies as well.

Microgrid technology allows us to place innovative, cost-effective energy solutions in remote locations where running electrical lines in the past proved to be too expensive. Utilities will find that this technology can fit well in their energy portfolios. California utilities are finding microgrids can be the solution to reducing liability as well as improving service reliability in high fire risk areas. Utilities also are finding that an end of line microgrid can replace long transmission lines that require frequent maintenance due to fire or wind in dry, high-risk areas or in northern areas susceptible to damage from wind and ice storms.

As low cost electrolyzers and fuel cells become more available, the need for fossil fuel-based generation for resiliency in case of winter weather or extended periods of low sun reducing solar output will also lessen. These solutions will support long term, on-site storage for residential and commercial based microgrid systems. This in turn will drive more EV adoption as the need to power from the grid will lessen or be eliminated, allowing in many cases for true energy independence. It will be this ability to charge from off-grid or grid augmented renewable sources that can really drive EV adoption.

As noted above, there will be some negatives to these disruptive technologies. Utilities will need to re-think their business models, potentially becoming less about generation and more about electron management between generation and usage locations within their grids. There will also be the need from an EV perspective to solve the problem of on-grid charging and the impact on utility infrastructure. Imagine your local convenience store with 10-12 EV fast chargers in place of gas pumps, requiring a megawatt or more of power to be delivered to that location at any given time. If gas stations and convenience stores do not respond to charging needs, they run the risk of facing major business disruption. Most of their profit comes not from the gas they sell, but the food and beverages sold in the store. Without vehicle fueling to drive traffic serious business impacts will be felt. These businesses will need to look at innovative energy solutions as well as work with their utilities to mitigate impact to their business.

Part of our challenge is to be aware of innovative technology developments. We cannot stop a disruptive technology, but we can be watchful, aware and respond. Disruptive technologies often come from new companies rather than proven firms. Established companies are typically less flexible and nimble in responding to changes in their market segments so it pays to watch new, less established players in our market segments. Disruptive technologies are a fitting example where in the words of the old Latin proverb “Fortune favors the bold”. Being mindful and adoption/adaption can be our best responses. Disruptive technologies provide the potential to open new markets. Who knows, maybe each of us can be involved in the next innovative disruptive technology wave.