What is Discontinuous Innovation?

Innovation Strategy is the foundation for company growth and adaptability in the ever-changing environment that is business today. Innovators must conceive their innovation strategy around their business objectives and incorporate both Continuous and Discontinuous Innovation.

Discontinuous Innovations introduce significant technological changes or leaps and can establish entirely new business models or markets. Think of Electric Vehicles or Streaming Platforms.

Discontinuous Innovation is also used interchangeably with “radical” or “disruptive” innovation. However, there are important distinctions worth noting:

Discontinuous Innovation refers to the introduction of something entirely new—a true game-changer that transforms how we live or work. These innovations don’t just improve on existing technologies; they create brand new markets or fundamentally shift consumer behavior. Think of the arrival of the first automobile, the invention of the internet, or the telephone. Each of these breakthroughs didn’t just tweak existing solutions—they ushered in entirely new ways of living and interacting.

Disruptive Innovation, on the other hand, typically starts small. It often enters the market as a simpler, more affordable alternative to established products or services. While it may not initially meet all the needs of mainstream customers, it gradually improves over time, eventually overtaking established competitors. Classic examples include budget airlines or digital cameras, which started out appealing to specific segments before eventually redefining their industries.

In essence, while the terms are sometimes used interchangeably, discontinuous innovation represents a leap—a dramatic and fundamental shift—whereas disruptive innovation is more about starting simple and evolving to dominate. Both, however, are powerful forces reshaping industries and consumer expectations.

Continuous Innovation, in contrast, involves small, consistent, and incremental enhancements to products or services.  Think of it like modern evolution vs the Cambrian Big Bang.

Incremental vs. Discontinuous Innovation

Let’s break down the distinctions:

• Incremental Innovation: This is all about gradual, continuous improvement. Imagine a smartphone receiving a slightly better camera or a more efficient battery with each new model—familiar, comfortable, and evolutionary.
• Discontinuous Innovation: Here, we’re talking about a radical leap forward—introducing entirely new concepts or technologies that redefine how we live, work, or play. Electric vehicles didn’t just improve on gas-powered cars; they changed the entire ecosystem. Streaming platforms didn’t just tweak how we watch TV; they fundamentally altered the entertainment landscape.

Dynamically Continuous Innovation: The Middle Ground

There’s also a middle path: dynamically continuous innovation. These innovations bring significant improvements that may not create brand new markets, but they do shift how we use products or services. Consider the transition from film cameras to digital cameras—a substantial shift that didn’t reinvent photography, but certainly revolutionized how we capture and share memories.

Understanding these differences is crucial for crafting effective innovation strategies and recognizing opportunities that could either improve what already exists or disrupt the status quo entirely.

Understanding the Innovator’s Dilemma

A core challenge associated with discontinuous innovation is known as the “innovator’s dilemma.” This refers to the predicament established companies face when groundbreaking innovations threaten to upend their existing business models.

Typically, large organizations are laser-focused on improving their current products and meeting the needs of their loyal, high-value customers. While this approach often delivers steady profits, it can blind companies to radical breakthroughs emerging on the horizon. As a result, big players may hesitate to invest in revolutionary ideas that don’t fit their traditional framework.

Why does this matter? Because disruptive new entrants—unburdened by legacy systems or entrenched customer bases—can seize the opportunity to experiment with transformative technologies or bold business models. The iteration of streaming platforms overtaking cable TV, or digital cameras swiftly replacing film, are prime examples of incumbents being caught off guard by a refusal to embrace discontinuous innovation early on.

In essence, the innovator’s dilemma highlights the struggle for established firms to balance current success with the risk (and promise) of reinventing themselves when discontinuous innovation knocks on the door.

Thus the “Netflix Effect” was born, revolutionizing the way we watch movies and TV and disrupting the entire entertainment industry. Netflix is credited with pioneering binge-watching, challenging traditional networks with unlimited options and ad-free watching.  Algorithms tailor your personal viewing experience, providing the streaming service with data to analyze trends and viewing patterns – driving their content creation investment. Netflix created an entirely new entertainment model and is a textbook example of Discontinuous Innovation.

When my middle schooler came home with a 3-D printed Star Wars model from Bolts and Bytes camp a few summers back I was suitably impressed but had no concept of the revolutionary effect that 3-D printing was going to have on the world. Never before have we been able to so easily and quickly replicate physical objects.

While 3D printing has many potential applications including apparel, manufacture of hard-to-find parts, and construction, it is the healthcare field that I am most excited about. 3D-printed personalized organs, skin grafts targeted nanoparticles, and medicine designed to individuals’ specific biological needs will revolutionize personal healthcare. Countless lives will be saved by recreating anatomical structures within cell cultures, mimicking the growth of human organs, and eliminating the need to wait for suitable human organ donors.

Disruptive Innovation – 3D Printing

3D printing is changing the way business works, creating radical cost reductions in areas such as molding and tooling, eliminating barriers to entry which can disrupt industries where some companies have traditionally held an advantage. 3D printing reduces the reliance on global supply chains, minimizing lead times and logistics costs.  This decentralization allows companies to produce closer to the point of consumption, creating opportunities for KANBAN and other inventory optimization strategies. Traditional manufacturing relies on standardization while 3D printing allows for mass customization – products tailored to customer specifications without significant cost. Hyper-personalization disrupts many sectors creating unique products and designs for customers. 

3D printing technology is also driving sustainability in industry increasingly focused on additive processes to minimize waste. As businesses continue to adopt and adapt to this technology, we can expect to see even more transformative impacts across various sectors. For an in-depth look into the effect of additive manufacturing in CPG, Energy, and New Materials take a look at our article on 3D Printing.

Navigating the Hurdles of Discontinuous Innovation

Of course, blazing new trails rarely comes without obstacles. Discontinuous innovation, as thrilling as it is, presents a few formidable challenges along the way:

• Leaping into the Unknown: Charting a new path is inherently risky. Organizations pursuing discontinuous innovation often step into areas with very few roadmaps—or none at all. Success isn’t guaranteed, and there’s always the possibility of costly detours.
• Deep Pockets and Patience Required: Unlike incremental tweaks, game-changing innovations generally demand significant upfront investment—of both time and resources. It’s rarely an overnight endeavor, and often requires long-term financial commitment before seeing a meaningful return.
• Overcoming Cultural Gravity: Established businesses sometimes find their own inertia working against them. Pushing a bold new idea requires upending old habits, facing resistance from within, and nudging company culture toward a more risk-tolerant, adaptive mindset.
• Gazing into the Crystal Ball: There’s a real art (and a bit of luck) in predicting how the market will respond to something entirely novel. Consumer adoption can be notoriously unpredictable, and even brilliant innovations sometimes need time—or a few pivots—to find their audience.

Despite these headwinds, organizations willing to tackle these challenges are often the ones to break new ground and redefine entire industries.

Best Practices for Disruptive, Discontinuous Innovation

• Create a culture of innovation and encourage a risk-tolerant environment.
• Allocate resources to R&D and stay ahead by exploring emerging technologies like AI, 3D Printing, and Robotics which can serve as catalysts for radical innovation. Stay vigilant for the latest advancements—are there new tools, materials, or digital capabilities that could address persistent challenges or unlock entirely new business models? Regularly scanning the technology horizon not only keeps your team informed but also positions your organization to seize opportunities before competitors do. Encourage teams to monitor developments from leading research labs, industry disruptors, and global tech conferences to ensure you’re identifying and evaluating breakthrough innovations as they arise.
• Create partnerships with research bodies to collaborate and access cutting-edge research and technologies. Our Scouting Team can connect you with subject matter experts across the technology sphere.
• Keep a close watch on shifting consumer preferences and emerging trends. Continuously scan for changes in what people want and need—these evolving demands often signal new opportunities for disruptive products or services.
• Identify underserved markets or user segments whose needs aren’t being fully addressed by existing solutions. These groups can be fertile ground for launching discontinuous innovations that make a real impact.
• Challenge industry assumptions and ask the tough questions—what if there’s a different or better way? Breakthroughs often begin by rethinking the status quo and uncovering new approaches to old problems.
• By proactively seeking out these opportunities, your organization can position itself to not just adapt to, but lead, the next wave of disruptive change.
• Adopt an agile and lean innovation framework to ensure that ideas are analyzed and validated quickly. The Ezassi Ideation platform will provide you with a collaboration tool to manage your innovation team and projects in real time.
• Embrace “Fail fast, Learn faster” and pivot if necessary, with smart innovation tools.
• Foster an open and collaborative innovation program.
• Focus on IP Management – protect your breakthrough technologies and inventions and monitor competitor patents published and granted to identify emerging threats and opportunities.
• Measure and track performance – establish KPIs to validate the success of your radical innovation initiatives, such as the number of patents filed, time-to-market, or revenue generated from new products. Our Strategy Team can assist in determining the right metrics for your team’s objectives.
• Put a master plan in place for the longer term and prepare a flexible multi-year roadmap. Consider that radical innovation often requires long-term investments that may not yield rapid ROI, but this mindset is necessary to maintain and grow your innovation endeavors.

• Spotting Untapped Opportunities

  Pinpointing underserved markets is at the heart of discontinuous innovation. These segments often fly under the radar—overlooked by established players who are focused on mainstream customers and solutions. By identifying groups whose needs or pain points remain unaddressed, organizations can unlock a wave of new possibilities.

  Why does this matter? Tapping into these niches allows innovators to design solutions from a blank slate, free from the constraints or “baggage” of legacy products. There’s less competition, more room to experiment, and greater potential for leapfrogging existing offerings. Netflix, for example, built its streaming empire by recognizing how traditional cable failed younger, tech-savvy viewers hungry for on-demand content.

  Finding these market gaps isn’t just about filling a void—it’s about turning overlooked demand into a source of competitive advantage. By addressing what others have missed, companies position themselves to reshape industries and define new standards.

• Tune Into Evolving Consumer Preferences

  Discontinuous innovation often begins with an ear to the ground—attentively tracking shifts in what consumers want, need, or even dream about. When businesses stay alert to evolving tastes and the subtle cues signaling new demands, they gain pivotal insights that drive breakthrough solutions.

  For example, the rise in plant-based diets spurred an explosion of alternatives like Impossible™ and Beyond Meat®, reshaping the entire food sector nearly overnight. Similarly, the boom in wearable fitness tech wasn’t just the march of miniaturized electronics; it was an answer to a growing consumer craving for health insights and self-optimization.

  By closely observing changes in consumer behavior—through tools like data analytics, social listening, and trend forecasting—organizations can identify gaps ripe for radical solutions rather than simply refining what already exists. This forward-looking mindset propels companies out of incremental improvement mode and into the territory of disruptive, game-changing innovation.

The Benefit of Discontinuous Innovation

By embracing these industry best practices, organizations can not only adapt to but excel in an increasingly competitive, rapidly evolving landscape shaped by transformative innovation.

Discontinuous innovation, in particular, offers organizations a range of compelling benefits:

• New Markets and Revenue Streams: Unlock entirely new markets that were previously untapped or nonexistent, leading to significant opportunities for growth.
• First-Mover Advantage: Gain a substantial competitive edge by setting industry standards and becoming a market leader—often reaping rewards before others even catch up.
• Enhanced Brand Image: Position your organization as a frontrunner in technological advancement and forward-thinking, boosting reputation and credibility.
• Societal Impact: Drive meaningful change by addressing pressing social challenges, improving quality of life, and contributing to broad progress.

The pace of change shows no sign of slowing. By understanding and leveraging the power of discontinuous innovation, your organization is better equipped to seize emerging opportunities and remain ahead of the curve—rather than risk being left behind as the next wave of innovation transforms industries and expectations.