Innovation is now the buzzword of global business. The common calling is “innovate or perish”. Companies have to continually innovate to remain relevant in the competitive marketplace.
The popular definition of innovation is any fresh, new ideas that generate value. “Value” here refers to any significant improvement in service delivery or product offerings. Most of such innovations are incremental improvements.
But, the more potent form is what many refer to as “disruptive innovation”. They are the ones that truly produce the so called “blue ocean” business opportunities. They often make the traditional ways of doing business obsolete.
A recent example of disruptive innovation is the ride-sharing concept in taxi service.
I am referring to “Uber”, that Internet-enabled taxi service which has provoked a worldwide love-and-hate response. So much so that it has generated feverish disruption in the world taxi system.
Consumers worldwide welcome this truly disruptive innovation. Whereas those in the taxi business have been riled up by the disruption to their earnings. Such feelings of disgust by taxi operators are there for all to see. Their hate is no longer a secret. We have seen pictures of taxi operators venting their anger in Argentina, the United States, Europe and many others splashed all over the international media.
Even here at home, taxi drivers are so angry that even family drivers have been mistaken as Uber drivers. They have been targeted for abuse. Whatever it is, as have been demonstrated in many past disruptive innovations, Uber is unstoppable.
It is easy to understand why. All these years, users of taxi services had a list of unresolved complaints and grouses. These are to do with security, safety, drivers’ arrogance, impoliteness, cheating, overcharging and many more. In some countries, the poor service is truly intolerable.
Of course, the level of grouses differ from country to country. At home in Malaysia, a recent survey suggested that we are among the countries which are at the lower end of the service spectrum.
Though admittedly, only a minority among the operators are the culprits, it has tarnished the entire taxi driving community. The government has initiated all kinds of programmes to change the situation for the better. Unfortunately, nothing much has improved.
Therefore, it is logical to expect that welcome relief from users when the Uber concept emerged, a concept which not only helps solve the years of suffering among taxi users but also, at the same time, creates job opportunities for almost everyone. That is disruptive innovation.
We must understand that Uber is by no means the only disruptive innovation that has rocked global businesses. There are many other examples of innovation that have disrupted the traditional way of doing business. The Internet is surely top of the list.
And many believe there will be more disruptions arising from the deployment of the Internet besides Uber. Just look at the telecommunications industry. It has been transformed because of the digital revolution sparked by the Internet.
Many of the so called millennium generation may not even know that in the past, we communicated with letters sent through the postal service. They are mostly people born after 2000.
For that matter, even those in Generation Y may be in the dark when it comes to sending an aerogramme. Even the word aerogramme is alien to them.
And because of that, postal services worldwide have to change their business approach.
Another much publicised business that succumbed to disruptive innovation is none other than photography. The demise of Kodak, the brand which for a long time was synonymous with photography, has been used as an example in many master of business administration programmes in universities to demonstrate the real power of disruptive innovation.
The irony of it all is that it was Kodak that first stumbled on digital technology in photography.
Unfortunately, it failed to see the potential. It is always the case in disruptive innovation. It is seldom the inventor who can forecast the potential. Often always, it is an outsider.
Therefore, instead of fighting Uber, taxi operators should now look at how they can create an improved Uber of their own.
Dr Ahmad Ibrahim is a fellow at Academy of Sciences Malaysia
