Seventeen years ago, Clayton Christensen published a theory that has become gospel in the innovation community: the idea of disruption. It's a notion that many startups have capitalized on: by using the latest technology and creating something cheaper and more accessible to the masses, the little guys can take down the big guys.
We sat down last week to chat with Christensen about his newest piece, "." One of our big takeaways: America could be in serious trouble.
"If you're interested in where America is headed, just look at Japan," argues Christensen. "There was a time in the 60s, 70s, and 80s, when Japan was growing at unprecedented rates. What was the engine of Japan's transformation from poverty to prosperity? It was market-creating innovations competing against non-consumption."
Japan's biggest companies in that era invested heavily in the products they were developing for a market that didn't yet exist.
"Toyota didn't attack the world with a Lexus; they came in with a [Corolla] that was so affordable that the low-end of humanity -- we call them college students -- could have a car. Sony had transistor radios that cost two bucks instead of 25 bucks from RCA. Billions of people now could own things and use things that previously were beyond their reach."
These disruptive products had ripple effects in the Japanese economy.
"As more people bought, these companies in Japan had to hire more people to make them and distribute them and sell them and service them."
Then in the 1990's, their big corporations started worrying more about the bottom line, and cutting costs wherever possible.
"Since 1990, Japan has generated only one market-creating innovation, which is the Nintendo Wii. They keep continuing to invest, but they invest to become even more efficient. They've been in this quandary for 20 years. That's where America is headed."
Last week had Christensen in the news. New Yorker writer and Harvard historian Jill Leporethe business guru.
Lepore was highly critical of the concept of disruption, which she believes has become a crutch:
Christensen quickly responded in an.
soon followed with their own take.
Tune in later this week for our full interview with Christensen.