The age of disruption
The world has been seeing one disruptive change after another lately, and the signs suggest that we can expect more. While disruptions in the political sphere are more prominent these days, no less significant and consequential are disruptions in the technological sphere, promising to upend the world order in business and economics.
In disruptions of the first kind, the Philippines appears to have gone ahead in the recent chronology of events—and not for the first time. Our 1986 People Power uprising inspired and unleashed a wave of popular democratic uprisings in places like Poland, Romania, Czechoslovakia, Bulgaria, Mongolia, China and Myanmar, and later in Latin America. This time around, the widely unforeseen election of Rodrigo Duterte to the Philippine presidency in May was the first in a seemingly ongoing succession of similarly unexpected political upheavals. The British vote in June to leave the European Union caught the world by surprise, as did the recent election victory of Donald Trump in the United States. France is eyed to be the setting for the next likely political upset, and more may yet be in the offing. We’ve entered an age of disruptive political surprises, whose ultimate consequences and implications for our lives have yet to unfold.
Meanwhile, we witness the advance of what have come to be called “disruptive technologies”—innovations that promise to bring about fundamental changes in the established business and economic order. A disruptive technology is defined as one that displaces an established technology and shakes up the industry. Examples in history include the steam engine, mass-produced automobiles, transistor radios, personal computers, e-mail, cellular phones, cloud computing, and e-commerce. Harvard Business School professor Clayton Christensen coined the phrase in 1997, contrasting it with “sustaining technology” that refers to incremental improvements to an established technology. Christensen held that large corporations are geared to work with sustaining technologies, but have trouble capitalizing on the potential efficiencies, cost savings, or new marketing opportunities created by (typically) low-margin disruptive technologies. Big companies tend to be dismissive of a disruptive technology; at worst, they resist, undermine, or even suppress it because it is not consistent with current company goals or market organization.
For years, it has been a curious observation that battery or energy storage technology has not advanced with the same rapidity as information and communication technology and advanced sciences such as nanotechnology or genome research have. This has spurred conspiracy theories of big oil conspiring with the motor vehicle industry to deliberately suppress any such advance that could spell the end of the profitable status quo. New battery innovations from erstwhile outsider Tesla are now poised to turn the car and energy industries on their heads, with far-reaching repercussions that would mark an entire new era in a world fast embracing renewables and shunning hydrocarbon-based energy. Tesla’s new 100-kilowatt-hour battery that can run a car over 500 kilometers on a single charge, and its “Powerwall”-solar roof combination that will wean homes from the grid, are truly disruptive and threatening to some established vested interests.
For us Filipinos, it should be a warning that committing our energy future too much to seemingly cheap coal-fired power could yet prove to be a costly proposition in the not-too-distant future, well before the end of those coal plants’ useful lives. In a world determined to resist and mitigate climate change, the renewable energy age is marching on, with our “newfound friend” China at the forefront. Meanwhile, the same business forces that managed to convince US President-elect Trump that climate change is a Chinese-made hoax are bound to be blindsided as renewables and battery technology mature and gain wide market foothold in their own midst, Trump notwithstanding.
It’s an age of disruption, and we must be both strategic and forward-looking about it.
