Disintermediation of RD&E
Dell, Amazon, and exchange-traded funds (ETFs) exemplify the supersonic pace at which disintermediation is taking place in the marketplace today. In effect, disintermediation is cutting out the middleman in classical supply chains, which can result in dramatically lower costs to service the customer.
When I use the term disintermediation in the context of RD&E, I am referring to the new paradigm elucidated by Henry Chesbrough in his now classic opus, Open Innovation: The New Imperative for Creating and Profiting from Technology.[6]
[6] Chesbrough, Henry William. Open Innovation: The New Imperative for Creating and Profiting from Technology (Boston: Harvard Business School Press, 2003).
A leading light of the open innovation business model, Chesbrough explains how companies can develop disruptive technology—a term coined by Clayton Christensen—to supersede entrenched competitors. By disruptive technology, Chesbrough means a technological advancement that is such a leap for mankind that it alters the way we live and interact. The automobile, telephone, and now cell phone are prime examples of new technology that revolutionized civilization and, within a short time, rendered their forerunners obsolete.
Chesbrough points to the Xerox Palo Alto Research Center (PARC) as a prime example of a company that developed promising disruptive technologies, but failed to capitalize on them because of a closed innovation model. Seeing opportunity elsewhere, some of their ...
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