{"id":5238,"date":"2016-01-28T05:31:41","date_gmt":"2016-01-28T03:31:41","guid":{"rendered":"https:\/\/staging.alainveuve.ch\/the-concept-of-perpetual-disruption\/"},"modified":"2016-01-28T05:31:41","modified_gmt":"2016-01-28T03:31:41","slug":"the-concept-of-perpetual-disruption","status":"publish","type":"post","link":"https:\/\/www.alainveuve.ch\/en\/the-concept-of-perpetual-disruption\/","title":{"rendered":"The concept of perpetual disruption."},"content":{"rendered":"

Fortunately, the term “perpetual disruption” is becoming more and more popular. Since I brought it up in the t3n article<\/a>, I have received positive feedback, suggestions and, fortunately, criticism on an almost daily basis. Sometimes I find that people simply perceive “perpetual disruption” as a trivial buzzword. So it’s high time I briefly explained the concept. <\/p>\n

<\/p>\n

(Reading time: 5 minutes)<\/em><\/p>\n

What is perpetual disruption?<\/h3>\n

On the one hand, the term “perpetual disruption” stands for an era in which the waves of social and economic renewal and upheaval observed to date are replaced by a state of constant change.<\/p>\n

Secondly, I look at how a company needs to be set up in order to be competitive in such an environment in the long term. I have also summarized these findings under the term “Perpetual Disruption (Business Structure)”. There is already quite a lot of material on this, which I have compiled in discussions with decision-makers in companies. However, this article only deals with the basics of change, without the business part. <\/p>\n

Why is it important to talk about “perpetual disruption” today?<\/h3>\n

Large parts of the economy have not yet realized that accelerated change will fundamentally change the rules of the game for how value is generated. Basically, this is the “creative destruction” introduced by Schumpeter. It is therefore anything but new. What is changing today is the speed at which this “creative destruction” is taking place. Even if Schumpeter did not explicitly describe them as waves, it is now generally accepted that the industrial revolutions, for example, represent this “creative destruction”. <\/p>\n

Characteristics of these fundamental upheavals were, on the one hand, the upheavals themselves and, on the other, long phases of consolidation. Due to accelerated technological progress, the cadence of “creative destruction” is increasing exponentially. The phases of consolidation are disappearing and society, and therefore the economy, is in a state of permanent upheaval. <\/p>\n

Basics<\/h3>\n

The basic assumption of this theory is that technological progress is accelerating. Whether this acceleration is exponential<\/em> or not is not decisive for the concept of “perpetual disruption”. What is decisive is that progress is not linear, but progressive. <\/p>\n

The following chart shows the effects of accelerated technological progress, assuming that there would be consistently long consolidation phases between the upheavals.<\/p>\n

\"\"<\/p>\n

The blue curve represents accelerated technological progress. Even after much discussion, there is no clear measure of this. The green lines show social and economic inertia. This means that society, and therefore the economy, has not yet recognized the need to keep pace with technological progress. On the one hand, this has to do with the fact that they had not recognized this at all, as the changes have only been able to fit into a lifespan of the last 80 years. Secondly, the technological advances were de facto not attractive enough because they were too small. I call this effect socio-economic inertia. <\/p>\n

The red lines represent the effort required by society and the economy to adapt to the new technology. I call this the socio-economic transformation effort. <\/p>\n

If you combine the socio-economic inertia with the socio-economic transformation effort, you get what I call “disruption debt”. Of course, the term is based on management debt or technical debt and should be used analogously. So it’s a kind of restructuring backlog, if you like. <\/p>\n

What this first graph now shows is that if these upheavals were to take place at constant intervals (b, constant green straight line), the socio-economic transformation effort (a) would become ever greater and therefore the (a) “disruption debt” would also become ever greater. In other words, it would become more and more difficult for people to make the effort each time. <\/p>\n

The reality<\/h3>\n

In reality, the time intervals have shortened over the last 500 years.<\/p>\n

\"\"<\/p>\n

As a result, the disruption debt (1) decreases with each cycle. If we keep the socio-economic transformation effort (3) constant, the cadence of disruption cycles increases. This is what we see here on a large scale: The technological achievements that substantially improve people’s lives are emerging at ever shorter intervals. <\/p>\n

Message<\/h3>\n

More than anything, however, the concept of perpetual disruption is intended as a message to today’s economy and society (read also; politics).<\/p>\n

“It would be fatal to assume that the changes we are now seeing in the digital sector are just another technological push in the spirit of another “industrial revolution”. Instead, we are confronted with an increasingly rapid succession of significant technological improvements. The response of companies cannot be a “transformation”, but must be a fundamental redefinition of the corporate model. Change is the new constant.”<\/p><\/blockquote>\n

What is new is that this change will occur several times within a single lifespan. The necessary agility is not yet practiced in companies. Today’s organizations are far too rigid to develop products and services based on these new technologies in a short space of time. <\/p>\n

By adapting to constant change now and gearing themselves up to develop extreme adaptability, we reduce the social damage that creative destruction de facto causes. The same applies to politics and legislation. <\/p>\n

Proactive change<\/h3>\n

One solution is to reduce the socio-economic effort per cycle and the socio-economic inertia.<\/p>\n

\"\"<\/p>\n

As a result, the damage caused by structural change, such as mass unemployment and value volatility, is reduced and spread over a longer period of time. For people, damage is always drastic if it occurs either suddenly or within a short period of time (or both). If the changes are negative and occur in small, foreseeable steps, they are generally better absorbed. This applies both to individuals in the private sphere and to entire societies. <\/p>\n

It is fatal for entrepreneurs to assume that the current changes only require a digital transformation and\/or that it is generally the 4th industrial revolution. This is because the next upheaval is already beginning when, according to historical perception, consolidation should begin. And companies will not be prepared for this. <\/p>\n

We have already been able to observe the consequences of unshaped changes extensively throughout history. The damage (read human suffering) has always been considerable. Today’s changes are not surprising per se. Nevertheless, there is still no serious, overarching debate. <\/p>\n

By addressing a general paradigm shift towards constant change in good time (i.e. today), society and therefore the economy could secure its future. The awareness of “perpetual disruption” is conducive to this debate. <\/p>\n

Artikel auf Social Media teilen:<\/p>\n<\/div>

<\/div>