Policy Brief No. 4: 
Disruptive innovation - implications for Europe's competitiveness

(to be published in February 2012)

Some strands of innovation theory make a distinction between "incremental" and "disruptive" innovation. The concept ows to Schumpeter’s work on "creative destruction", where radical innovations create major disruptive changes.

The OECD's "Oslo Manual", for instance, defines an innovation as "disruptive" if it has a significant impact on a market and on the economic activity of firms in that market, up to the point that new markets are created while existing markets or products may be rendered obsolete. In contrast, "incremental" innovations improve existing products without causing major structural changes in the underlying markets. Thus, the concept focuses on the impact of innovations as opposed to their novelty. 

The objectives of this policy brief are:

• to introduce the concept of "disruptive innovation" (theoretical foundation, definitions, conceptual frameworks, examples);
• to assess in which sectors of the economy disruptive innovation is likely to occur in the next 10 years;
• to indicate possible scenarios for 2-3 of these sectors and the implications for the competitiveness of Europe; 
• and to assess whether this has policy implications (e.g. for research and innovation policy) and indicate strategic responses. 

The policy brief is being prepared by empirica GmbH with support of sector experts who will help to assess the relevance of the concept in their industry.