Anticipating the Emergence of Disruptive Technology
By: Sasha Brisbon
Thomas Jefferson said in 1816, “Laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths disclosed, and manners and opinions change with the change of circumstances, institutions must advance also, and keep pace with the times.” Today, the human mind can’t keep pace with the technological advances that continue to benefit and delight a world of consumers.
Disruptive technology is an innovation that uproots an established technology, or a revolutionary product or service that spawns a new industry. Harvard Business School professor Clayton M. Christensen coined the term disruptive technology. In his 1997 best-selling book, “The Innovator’s Dilemma,” Christensen separates new technology into two categories: sustaining and disruptive. Sustaining technology relies on incremental improvements to an already established technology. These are technologies that most large companies are familiar with; technologies that involve improving a product that has an established role in the market, allowing the companies to compete against each other’s sustaining improvements. In contrast, disruptive technology helps create a new market and value network. This type of innovation goes beyond improving existing products; it seeks to tap unforeseen markets, create products to solve problems consumers don’t know they have and ultimately change the face of the industry. Ultimately, the main difference between both types of technology is that sustaining technology comes from listening to the needs of customers in the existing market and creating products that satisfy their predicted needs for the future. Disruptive technology creates new markets separate to the mainstream; markets that are unknown at the time of conception.
Technology is currently on an exponential curve and is touching practically everyone — everywhere. Innovations that once took centuries now happen in decades, sometimes in years. As a result, regulatory gaps continue to expand because existing laws cannot keep up with the advances in technology. Thus, regulators must shift the current tentative approach toward disruptive technologies. By its nature, disruptive innovation challenges existing regulations; however, innovation is essential to advancing the country’s competitiveness andnational security interests.
Innovations such as blockchain and cryptocurrency continue to disturb regulatory frameworks and trigger intense public debates. For example, in 2010, government agencies were so concerned about regulating blockchain and cryptocurrency prematurely or in error, regulatory agencies delayed issuing any formal guidance. This delay resulted in notices from each agency that were collectively inconsistent with one another. The Commodity Futures Trading Commission (CFTC) recognized cryptocurrency as a commodity, the Securities and Exchange Commission (SEC) recognized cryptocurrency simply as virtual currency, and the Department of Treasury determined that cryptocurrency was not form of currency at all. As a result, judges were forced to use the agency’s guidance as binding law instead of relying on one source of law to render judgements and begin to establish case precedent.
Similarly, 3D printing has morphed from an area of research to the mainstream. 3D printing is becoming easily accessible and is expected to be at the heart of full-scale production capabilities in several industries, from aerospace to automotive to health care to fashion. However, the most startling use of 3D printing to date is the potential to print dangerous things, such as an unregulated and undetectable plastic gun. Such instances create severe vulnerabilities to our economy and national security. When the focus is on disruption, to the exclusion of human and legal values, things become problematic.
Artificial intelligence, cyber, and quantum computing are the top three emerging disruptive technologies that are anticipated by 2025. As a result, government agencies should collectively begin establishing and modifying existing regulations that will govern these new innovations. According to the 2018 Analytic Exchange Emerging Technology and National Security report, the next decade of technological development will play a critical role in defining the national security posture and competitive position of the United States against our global competitors. Therefore, the United States must commit to a more informed, deliberate, and coordinated approach in developing and deploying emerging technologies and establishing partnerships. Disruptive technologies present new opportunities, yet insert risks; successfully managing the risks and capitalizing on the opportunities must be the way forward. The competitive pressure and the ever-increasing pace of change will always compound the challenge. The law must adapt to this future by proactively thinking through potential threats and how the law can evolve to accommodate the exciting areas of innovation.