The author, Jill Lepore, addresses some of the ideas that led to this year's Nobel Prizes in Economics. A decade ahead of the awards.
This is the version of the article hosted at MIT.
In the last years of the nineteen-eighties, I worked not at startups but at what might be called finish-downs. Tech companies that were dying would hire temps—college students and new graduates—to do what little was left of the work of the employees they’d laid off. This was in Cambridge, near M.I.T. I’d type users’ manuals, save them onto 5.25-inch floppy disks, and send them to a line printer that yammered like a set of prank-shop chatter teeth, but, by the time the last perforated page coiled out of it, the equipment whose functions those manuals explained had been discontinued. We’d work a month here, a week there. There wasn’t much to do. Mainly, we sat at our desks and wrote wishy-washy poems on keyboards manufactured by Digital Equipment Corporation, left one another sly messages on pink While You Were Out sticky notes, swapped paperback novels—Kurt Vonnegut, Margaret Atwood, Gabriel García Márquez, that kind of thing—and, during lunch hour, had assignations in empty, unlocked offices. At Polaroid, I once found a Bantam Books edition of “Steppenwolf” in a clogged sink in an employees’ bathroom, floating like a raft. “In his heart he was not a man, but a wolf of the steppes,” it said on the bloated cover. The rest was unreadable.
Not long after that, I got a better assignment: answering the phone for Michael Porter, a professor at the Harvard Business School. I was an assistant to his assistant. In 1985, Porter had published a book called “Competitive Advantage,” in which he elaborated on the three strategies—cost leadership, differentiation, and focus—that he’d described in his 1980 book, “Competitive Strategy.” I almost never saw Porter, and, when I did, he was dashing, affably, out the door, suitcase in hand. My job was to field inquiries from companies that wanted to book him for speaking engagements. “The Competitive Advantage of Nations” appeared in 1990. Porter’s ideas about business strategy reached executives all over the world.
Porter was interested in how companies succeed. The scholar who in some respects became his successor, Clayton M. Christensen, entered a doctoral program at the Harvard Business School in 1989 and joined the faculty in 1992. Christensen was interested in why companies fail. In his 1997 book, “The Innovator’s Dilemma,” he argued that, very often, it isn’t because their executives made bad decisions but because they made good decisions, the same kind of good decisions that had made those companies successful for decades. (The “innovator’s dilemma” is that “doing the right thing is the wrong thing.”) As Christensen saw it, the problem was the velocity of history, and it wasn’t so much a problem as a missed opportunity, like a plane that takes off without you, except that you didn’t even know there was a plane, and had wandered onto the airfield, which you thought was a meadow, and the plane ran you over during takeoff. Manufacturers of mainframe computers made good decisions about making and selling mainframe computers and devising important refinements to them in their R. & D. departments—“sustaining innovations,” Christensen called them—but, busy pleasing their mainframe customers, one tinker at a time, they missed what an entirely untapped customer wanted, personal computers, the market for which was created by what Christensen called “disruptive innovation”: the selling of a cheaper, poorer-quality product that initially reaches less profitable customers but eventually takes over and devours an entire industry.
Most big ideas have loud critics. Not disruption. Disruptive innovation as the explanation for how change happens has been subject to little serious criticism, partly because it’s headlong, while critical inquiry is unhurried; partly because disrupters ridicule doubters by charging them with fogyism, as if to criticize a theory of change were identical to decrying change; and partly because, in its modern usage, innovation is the idea of progress jammed into a criticism-proof jack-in-the-box.
The idea of progress—the notion that human history is the history of human betterment—dominated the world view of the West between the Enlightenment and the First World War. It had critics from the start, and, in the last century, even people who cherish the idea of progress, and point to improvements like the eradication of contagious diseases and the education of girls, have been hard-pressed to hold on to it while reckoning with two World Wars, the Holocaust and Hiroshima, genocide and global warming. Replacing “progress” with “innovation” skirts the question of whether a novelty is an improvement: the world may not be getting better and better but our devices are getting newer and newer.
The word “innovate”—to make new—used to have chiefly negative connotations: it signified excessive novelty, without purpose or end. Edmund Burke called the French Revolution a “revolt of innovation”; Federalists declared themselves to be “enemies to innovation.” George Washington, on his deathbed, was said to have uttered these words: “Beware of innovation in politics.” Noah Webster warned in his dictionary, in 1828, “It is often dangerous to innovate on the customs of a nation.”
The redemption of innovation began in 1939, when the economist Joseph Schumpeter, in his landmark study of business cycles, used the word to mean bringing new products to market, a usage that spread slowly, and only in the specialized literatures of economics and business. (In 1942, Schumpeter theorized about “creative destruction”; Christensen, retrofitting, believes that Schumpeter was really describing disruptive innovation.) “Innovation” began to seep beyond specialized literatures in the nineteen-nineties, and gained ubiquity only after 9/11. One measure: between 2011 and 2014, Time, the Times Magazine, The New Yorker, Forbes, and even Better Homes and Gardens published special “innovation” issues—the modern equivalents of what, a century ago, were known as “sketches of men of progress.”
The idea of innovation is the idea of progress stripped of the aspirations of the Enlightenment, scrubbed clean of the horrors of the twentieth century, and relieved of its critics. Disruptive innovation goes further, holding out the hope of salvation against the very damnation it describes: disrupt, and you will be saved.
Disruptive innovation as a theory of change is meant to serve both as a chronicle of the past (this has happened) and as a model for the future (it will keep happening). The strength of a prediction made from a model depends on the quality of the historical evidence and on the reliability of the methods used to gather and interpret it. Historical analysis proceeds from certain conditions regarding proof. None of these conditions have been met....
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