What is the innovator’s dilemma?

The innovator’s dilemma is a concept introduced by Harvard Business School professor Clayton Christensen in his book “The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail”. The innovator’s dilemma refers to the challenge that established companies face when they try to innovate and introduce new products or technologies.

According to Christensen, established companies have a natural tendency to focus on improving their existing products and technologies, and to ignore emerging disruptive technologies that may not seem as profitable or important at the time. However, these disruptive technologies can eventually become dominant and cause established companies to lose their competitive advantage, leading to their failure.

The dilemma arises because established companies face a difficult choice: they can either continue to focus on their existing products and technologies and risk becoming irrelevant as disruptive technologies emerge, or they can invest in new and unproven technologies, which may not offer immediate returns and may cannibalize their existing products. This makes it challenging for established companies to embrace disruptive innovations and adapt to changing market conditions.

In the context of e-government or government as a service, the innovator’s dilemma can be applied to the challenge faced by governments in adopting new technologies to improve their services and become more efficient.

Governments often have rigid bureaucratic structures and legacy systems that make it difficult to adopt new technologies and processes. This can result in a reluctance to invest in new technologies, even if they offer potential benefits, due to concerns about cost, security, and resistance to change.

However, failing to adopt new technologies can lead to inefficiencies, poor service delivery, and a lack of innovation. Just like companies facing the innovator’s dilemma, governments must balance the need to maintain their existing operations and services with the need to adapt to changing circumstances and emerging technologies.

To overcome the innovator’s dilemma in the context of e-government, governments can take a proactive approach to innovation by investing in research and development, partnering with private sector companies, and creating a culture of innovation within their organizations. They can also prioritize user-centered design and work closely with citizens to understand their needs and expectations for government services. By embracing new technologies and processes, governments can improve their services and promote greater efficiency and effectiveness.

One example of a company that failed due to the innovator’s dilemma is Kodak. Kodak was a dominant player in the photography industry for over a century, but it failed to adapt to the rise of digital photography.

In the 1970s, Kodak engineer Steven Sasson developed the first digital camera, but Kodak’s management saw it as a threat to their film business and did not pursue it. Kodak continued to focus on film-based photography and neglected the potential of digital photography.

As a result, Kodak missed out on the opportunity to capitalize on the digital photography revolution, and eventually filed for bankruptcy in 2012. In contrast, competitors like Canon and Sony embraced digital photography and gained market share, contributing to Kodak’s downfall.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: