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Disruptive Technologies

Disruptive Technologies. U. B. Desai SPANN Lab. Dept. of EE IIT-Bombay www.ee.iitb.ac.in/~ubdesai. What is disruptive technology? Working Definition: Technology which creates a major (positive) disruption in the way society functions Best explicated thru examples.

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Disruptive Technologies

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  1. Disruptive Technologies U. B. Desai SPANN Lab. Dept. of EE IIT-Bombay www.ee.iitb.ac.in/~ubdesai ICT4SED

  2. What is disruptive technology? • Working Definition: • Technology which creates a major (positive) disruption in the way society functions • Best explicated thru examples ICT4SED

  3. Examples of Disruptive Tech. • Sun Microsystems Workstations: disrupted the market for main frame computers. • PCs disrupted the market for workstations • Xerox plain paper copier: disrupted the market for offset printing. • Cannon’s desktop photocopiers: disrupted Xerox’s high speed photo copying market. ICT4SED

  4. Honda motorcycle of 60s • Japanese cars of 70s • Korean Cars of late 80s • Wireless telephony (GSM, CDMA): disrupted the market for wire-line telephony. • Nirma … • … ICT4SED

  5. Impacting technologies are disruptive • Disruptive innovations are products and services that initially aren't as good as those that historically have been used by customers in mainstream markets, and therefore can take root only in new or less-demanding applications, amongst non-traditional customers Stuart Hart and Clayton Christensen ICT4SED

  6. Historically: Major waves of growth thru forays at the bottom of the developed markets (DM) DM ICT4SED

  7. The World Pyramid Population in millions Purchasing Power Parity (PPP) >$20,000 ~ 200 mil Tier 1 ~ 800 mil Tier 2 & 3 $2000 to $20,000 less than $2000 ~ 5000 mil Tier 4 ICT4SED

  8. The Pyramid • Examples of Xerox, Cannon copiers, PCs, Cell phones, etc. represent technologies developed for the second Tier (to some extent Tier 3) • To date most disruptive technologies have been attacking Tier 2 ICT4SED

  9. Advocated by C. K. Prahalad Attack the bottom of the pyramid. Likely to create greater disruption bottom of the pyramid ICT4SED

  10. Pyramid for India Population in million Purchasing Power > 5 lakhs 10 mil T1 50 mil 3 to 5 lakhs T2 1 to 3 lakhs 150 mil T3 50K to 1 lakh 200 mil T4 550 mil less than 50K T6 ICT4SED

  11. Opportunities at the Bottom of the Pyramid • Nearly ½ billion in India (4 to 5 billion world wide) at the bottom of the pyramid • Need to develop new technologies for Tier T4 and T5 • New business models are needed ICT4SED

  12. New Business Models PCO-STD-ISD booths (Pitroda) Hindustan Lever (Chache Story) Amul Dairy Grameen Bank, SEWA Bank (Micro-financing) Grameen Telecom (Bangladesh) Microfinance (Vikram Akula) Technologies N-Logue (Village Internet Kiosk using CorDect Wireless Tech.) TVS (Kirana Shop Computers) Examples of Attacking the Bottom of the Pyramid ICT4SED

  13. N-Logue: corDECT Village Kiosk • Consists of • Wireless corDECT wall-set for Internet and telephone, PC, dot matrix printer, battery back up, web-cam, speakers, microphone --- for Rs.50K • Local entrepreneur operates the kiosk • These kiosks becoming community centers • Expect cities to outsource their work to villages (Indian villages could become back office to Indian urban centers ~ a hyperbole) • RTBI: Rural Technology Business Incubator ICT4SED

  14. TVS Kirana Computers • For Kirana stores with sales of Rs.100,000 per month • A rugged PC • No out right purchase of software or hardware: Pay Rs.2,500.00 per month. • Software for accounting, inventory, etc. • In 180 days there was a 3.9% increase in profit ICT4SED

  15. Poor as a Problem Poor as Wards of State Old Technologies Old Technologies Follow the West Resource Constraints Poor as an opportunity Global Market of 4.5 billion? Poor as Active Market Innovation and development of new technologies with usefulness to the Poor Imagination Constraint Change of Mindset ...(from C. K. Prahalad) Information Access will be a great asset ICT4SED

  16. Change of Mindset …(from CK Prahalad) The Poor ofIndia is an Intractable Problem The Poor ofIndia is a Potential Market The Poor ofIndia can be A Source of Innovation Poverty Alleviation, Subsidies Creating a New Market, Innovation, Growth ICT4SED

  17. Challenges • The Market is Very Fragile: (Monsoons, Subsidies,….) • Middlemen and Moneylenders • Fragmented Experiments • Lack of a Global database • Traditional Ways of Thinking ICT4SED

  18. References • C. K. Prahalad and Allen Hammond, Serving the World’s Poor, Profitably, Harvard Business Review, September 2002 • C K Prahlad, spoke about at the annual session of the Confederation of Indian Industry, held recently in Bombay. Prahlad said the Indian economy has the potential to grow 10 to 15%. http://www.moneycontrol.com/promos/prahlad.html • The Great Leap Downward: http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=996849 ICT4SED

  19. Home Work: Questions • Why is there so little technological innovation and development, where the need is maximum? • Why has Fortune at the bottom of the Pyramid not taken off? • Is there something wrong with the theory? • Think of three disruptive technologies that can change the lives of poor in India ICT4SED

  20. ICT4SED

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