What a Disruptive Innovation-Themed ETF Brings to the Table
In a recent Webcast, “How Investors Can Identify Disruptive Innovation and What it can Add to a Portfolio”. It talks about disruptive technology should be able to do the following. First, “enable rapid cost decline” Second, the impact of the technology should pass across sectors and geographies. Third, prolong innovation process. In the article, it talks about how robotics can enable rapid cost decline. The value of disruptive technology can be varied from industries and sectors of business, by innovating the business process with automation, artificial intelligence and robotics can potentially “enable rapid cost decline”, however, such technologies require long-term investment in both time and capital. Hypothetically, if the company utilize such disruptive technology, it needs to evaluate the scale of impact in its operation, in-depth analysis of what benefit the firm can acquire in the long-term. For instance, Netflix, the well-known online streaming service, represents as a perfect example in disruptive innovation. First, the company reshapes the entire eco-system of how people watch TV shows and movies. Second, by hosting the platform online, the firm successfully decrease its operation cost by not opening any physical stores, unlike Blockbusters at the time. Third, it serves as a perfect example of how the streaming service can have the great impact geographically in a short period of time. Today, Netflix attain approximately 130 millions of users in 190 different countries. In conclusion, disruptive innovation must provide a method to enable rapid cost decline, across geographic and sector barriers and spawn innovation process to achieve its purposes as the game changer in the industry.