Disruptive innovation grew out of the management consulting world of the second half of the nineteen nineties; McKinsey, BCG, and Anderson. Corporations were told they needed to innovate or be swept away by global competition. Technology promised, and global markets threatened. The banking 2008 crisis destroyed Wall Street's control of the economy. The iPhone 4 release in 2010 provided the initial platform. To that point, a mobile phone was a corporate perk, but the iPhone got millions of hipsters to shell out for one of their own.
So the west coast boys tried on their libertarian suits and went to work thinking up ways to disrupt stodgy, old-fashioned industries. They delivered stripped-down apps to hipster early adopters on their phones. The product was mostly information, a repackaging of the TV model for the twenty-first century or an app that brought together buyers and sellers.
Network effects allocated huge rewards to first movers. And that money was deemed to be the reward for bringing change to the old way of doing things; money is taken from the fat lazy old boomers and their golf-playing pensioner grandparents.
What the sellers were selling mostly was the leftovers from their now ruined physical lives; stuff, parking spaces, rides, rooms, rentals, gigs, personal services, and of course, sex; and buyers could get cheap stuff they wanted. The app builders took a piece from both sides, plus information about the market that they could resell.
The TV model stole the intellectual property of writers, musicians, artists, photographers, and filmmakers; then offered it out at a price of zero - conditional on the consumer giving up private information that could be sold to old-fashioned businesses. Not that the writers, musicians, etc., didn't set themselves up for confiscation. You can't offer a product to a global audience that has a zero marginal cost and expect to get $20 a copy; not for very long anyway - that's another story: twentieth-century property rights.
What the disruptors were disrupting was mostly state and local regulation and government. They were disrupting the institutions that granted certifications and operating licenses, set zoning regulations, controlled rents, and regulated wages and quality. Not that a lot of that stuff made a lot of economic sense; rent controls, minimum wages, beautician licenses, etc. However, they were the institutions of long-established civil agreements.
I don't have a lot of empathy for the owners of Google, Amazon, and Facebook or Uber, Lyft, and Airbnb.
I'm not entirely convinced they are entitled to their wealth or use it for anything but evil.
The second and third drafts will not be kind to the winners in the first two decades of the twenty-first century.
