A radical or disruptive innovation is one that creates a new market and value network with the view of expanding gradually to displace the established market players (Smith 2015; Chulu 2015). In other words, radical innovation brings new approaches to doing things and conducting business. On the other hand, incremental innovation gradually improves existing processes and business approaches to make them more efficient (Smith 2015). For example, incremental innovation in a company may present itself through small, gradual improvements such as the upgrading of services, products, processes, or methods.
The United Arab Emirates is striving to become the world’s technology and innovation center by 2050, and it has successfully attracted innovators who invest greatly in research and development. This investment has also led to many innovations, both disruptive and incremental, over the last decade (Smith 2015). One recent disruptive innovation to come out of the UAE is the so-called global brain, in which people around the world can combine and integrate their intelligence by means of a digital communication system.
With this innovation, an engineer who is based in the United States can offer a product design explanation to a company in Saudi Arabia. For example, the change of TECOM to the Dubai Creative Clusters Authority was the result of a well-calculated plan designed to encourage the rise of innovative and creative businesses that would attract valuable investors to the region. Such investors are especially important because they are willing to fund outstanding innovations. Although this strategy has not yet taken over the market, it is growing very fast and undoubtedly disrupting a sector dominated by more conventional banking institutions.
Along with such disruptive innovations, the UAE has experienced various incremental innovations, which have gradually improved how processes and business are conducted in numerous segments of the economy. For instance, the country’s building and construction industries have experienced many improvements in technology, all of which have led to the ability to construct better buildings. Such milestones have made been possible through the incremental innovations of companies such as the Danube Group, a major building and home interior business in the UAE. The company has recently registered 15% profitability in its operations, drawing it closer to its goal of attaining returns of more than one billion AED before 2017.
Five Types of Innovation
First of all, brand innovation is one of the most common marketing strategies in the UAE. In this type of innovation, businesses differentiate themselves by ensuring that their products and offers are more easily recognizable, memorable, and preferable than those of competitors or substitutes (Smith 2015). One of the best examples of businesses that have innovated through branding is the national airline of the country, Emirates, and its “Fly Emirates” marketing campaign.
This airline is highly recognizable for its affordable and top-notch services, both on board and at the terminals. It has been voted several times as the world’s best and most recognizable airline. The success of the brand innovation for Emirates has been the culmination of efforts made by the government towards making the UAE an international travel hub between the West and the East. These impressive efforts have resulted in one of the fastest-growing and best-rated airlines in the world.
The second type of innovation is service modernism. In this category, businesses strive for competitive advantage through enhanced quality and experience of offers, which guarantee that customers are satisfied with the business’s products and services (Ardyan 2016; Sharma 2016). One of the most notable examples of service innovation is Etihad Airways, another fast-growing passenger carrier in the United Arab Emirates. The company has been voted as having the world’s best business class several times. In addition, its cabin crew has also been voted as the finest in the world.
Process innovation is another important approach through which companies can beat their competition (Smith 2015). In this case, one of the most evident success stories is the UAE’s DP World, a leading facilitator of global trade and supply chain management. Through its process innovation, the corporation has ensured that many bureaucracies and barriers to trade are eliminated. In fact, it has centralized its operations to eliminate many of the complexities of handling business for its customers. In this case, DP World’s process innovation is its provision of a one-stop shop in which a client’s logistics and supply chain needs are handled all at once (Veglio & Zucchella 2015).
Customer engagement is another important type of innovation, which allows customers to experience services in a memorable and satisfying manner (Smith 2015). For instance, the Abu Dhabi Islamic Bank has been voted as the bank with the best customer care and engagement, ahead even of major international banks such as Barclays and Citibank. The company has achieved the feat through its innovative products and customer care services that ensure that customers feel valued and appreciated. For instance, the bank regularly follows up with customers, advises them on investment strategies, and further provides individualized services that encourage good rapport and relations.
Lastly, network innovation is another vital approach towards business competitiveness (Smith 2015). DP World is also a key innovator in this segment. It has collaborated with numerous supply chain companies in areas where it has presence, as well as those that it has not yet penetrated, to ensure that customers from all over the world can enjoy its services.
Is It the End of Disruptive Innovation?
I agree that “disruption does not have to be entirely fresh; merely altering the way people believe a certain industry operates is sufficient.” However, I do not believe that people are seeing the end of, or even an extensive decline in, disruptive modernization. Indeed, with the UAE’s ambitious goals of becoming a global technology and business hub, several disruptive innovations are in the process of implementation in the country. For example, due to its robust building and construction industry, the UAE is at the forefront of implementing disruptive approaches to the construction of taller and architecturally superior buildings. The industry is keen on taking advantage of 3D printing to make models of buildings, a new technology which is likely to change how structures are constructed across the world.
Forum Discussion on Airbnb
The value proposition of Airbnb is based on its ability to connect travelers to private homes and other accommodation facilities of their liking (Smith 2015). This proposition has aligned well with the expectations of customers who are interested in being able to select accommodation areas that suit their needs when they travel to different locations across the world.
As an affordable option, Airbnb links customers to many different types of accommodation across a wide range of options, including private homes and hotels. The S-Curve is an important tool that explains the speed of adoption of innovation in a company; an examination of Airbnb’s S-Curve, as shown below, reveals that the company made slow progress before gaining momentum in 2012 up to 2014.
Today, Airbnb’s growth is ongoing, and its fast growth has put it on a path towards domination of online bookings for accommodation in the travel industry. Throughout its existence, the company has generated various intellectual property rights (IPR). Firstly, the company has established a copyright IPR through its website and mobile application. In this case, the mobile platform is software, which the company must protect against any illegal duplication or usage that does not benefit its business.
The company’s second IPR is the patent of its peer-to-peer business model of online booking (Bruton et al. 2015). If the patent is not well protected, newer companies may drive Airbnb out of the market. The third type of IPR is the company trademark of the Airbnb name and logo, which can only be used legally with the company’s permission to represent its interests. Lastly, Airbnb possesses another form of IPR in its so-called trade secrets, which are the undisclosed business aspects that contribute to its competitive advantage.
References
Ardyan, E 2016, ‘Market Sensing Capability and SMEs Performance: The Mediating Role of Product Innovativeness Success’, DLSU Business & Economics Review, vol. 25, no. 2, pp. 79-97.
Bruton, G, Khavul, S, Siegel, D & Wright, M 2015, ‘New financial Alternatives in Seeding Entrepreneurship: Microfinance, Crowdfunding, and Peer-To-Peer Innovations’, Entrepreneurship: Theory and Practice, vol. 39, no. 1, pp. 9-18
Chulu, B 2015, ‘Perpetual Betterizing: A Grounded Upgrading of Disruptive Innovation Theory Resolving Co-dependent Socio-economic Main Concerns’, Grounded Theory Review, vol. 14, no. 2, pp. 34-54.
Sharma, N 2016, ‘Management of Innovation: The Case of IT and Pharmaceutical SMEs’, IUP Journal of Knowledge Management, vol. 14, no. 2, pp. 60-76
Smith, D 2015, Exploring Innovation, McGraw-Hill Education, Maidenhead.
Veglio, V & Zucchella, A 2015, ‘Entrepreneurial firms in traditional industries. Does innovation matter for international growth?’, Journal of International Entrepreneurship, vol. 13, no. 2, pp. 138-152.