Cumulative Disruption

If anyone ever asks you why innovation is important, consider this:

Year Technology Lighting Efficiency
1750 B.C. Oil Lamp 17.5 (lumen hours per BTU)
A.D. 1800 Tallow Candle 22.2
1815 Whale-oil Lamp 39.4
1875 Kerosene Lamp 46.6
1883 Electric Light, Carbon Filament 762.0
1920 Electric Light, Tungsten Filament 3,463.7
1992 Compact Flourescent Bulb 20,111.1

The data are from a paper by William Norhaus (you can get a pdf version of it here – it is paper CFDP 1078). As each new lighting technology has been introduced, the efficiency of lighting has increased dramatically. One interesting point is in his data though – when each new technology was introduced, the unit cost for the same amount of light tended to be higher than it was with the dominant technology of the time. That’s part of why it is often hard to get new ideas to spread, even when they are demonstrably better than what they’re replacing. It’s why Edison had to build power plants and dig up the streets to get people to use his Electric Light into widespread use.

Nevertheless, as each new lighting technology was refined, the labor-cost of lighting fell through the floor:

The amount of time you had to work to pay for one kLH by 1992 was 1/100,000,000 of what it was in 1750 B.C.

This makes me consider a few questions:

  • This is a great example of the cumulative impact of successive disruptive technologies – it can be enormous. So consider – are any changes like this coming in your industry? Probably so – so what can you do to prepare for these changes? Or to drive them?
  • This gigantic drop in the price of lighting has made people in recent years significantly better off. If we are working on innovating, will our innovations have a similar impact? Wouldn’t you want them to? We should be working on things that make a real difference.
  • That is why it is important to think about buildership. I’ve talked previously about innovation strategies that we can use to build long-term innovations – and again, wouldn’t you rather work on things that will make a difference?

Innovation can have huge impact on peoples’ lives. Innovating is powerful, and it comes with responsibility – and we should consider both aspects when we build our innovation strategies.

Student and teacher of innovation - University of Queensland Business School - links to academic papers, twitter, and so on can be found here.

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