# Disruptive innovation

`kaal:entity:disruptive-innovation`

**Status.** derived

This node is assembled mechanically from the 35 claims that carry the concept tag `disruptive-innovation`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself.

## Every claim under this term

35 claims across 8 works, 2016 to 2021.

**2016**

- [2740477-001](https://wulfkaal.github.io/claims/2740477-001) [failure/argued] *(failure mode)* -- Ex post trial and error rulemaking built on stable and presumptively optimal rules produces suboptimal regulatory outcomes that are no longer sustainable once disruptive innovation grows exponentially.
  > The ex-post trial-and-error-rulemaking with stable and presumptively optimal rules7 in the existing regulatory framework8 often produces suboptimal regulatory outcomes that are no longer sustainable in an environment of exponential disruptive innovation.
  Wulf A. Kaal, Erik P.M. Vermeulen, Venture Capital as Dynamic Regulation of Disruptive Innovation (2016). SSRN: https://ssrn.com/abstract=2740477
- [2740477-003](https://wulfkaal.github.io/claims/2740477-003) [failure/asserted] *(failure mode)* -- Exponential disruptive innovation has the potential to overwhelm the existing regulatory process outright, not merely to strain it.
  > In short, exponential disruptive innovation has the potential to overwhelm the existing regulatory process.
  Wulf A. Kaal, Erik P.M. Vermeulen, Venture Capital as Dynamic Regulation of Disruptive Innovation (2016). SSRN: https://ssrn.com/abstract=2740477
- [2740477-008](https://wulfkaal.github.io/claims/2740477-008) [failure/argued] *(failure mode)* -- Disruptive innovative technology frequently does not fit the legal categories created by recalcitrant regulatory structures, so the classification problem itself is a source of regulatory failure.
  > Disruptive innovative technology often does not fit into existing legal categories created by recalcitrant regulatory structures.
  Wulf A. Kaal, Erik P.M. Vermeulen, Venture Capital as Dynamic Regulation of Disruptive Innovation (2016). SSRN: https://ssrn.com/abstract=2740477
- [2740477-009](https://wulfkaal.github.io/claims/2740477-009) [failure/argued] *(failure mode)* -- When disruptive firms do not comply with existing rules or write their own exemptions because no appropriate rules exist, consumer protection and public safety goals are undermined and incumbent firms still bound by the rules suffer severe competitive disadvantages.
  > public policy goals including consumer protection and public safety can be undermined and incumbent firms that continue to be subject to existing rules encounter often severe competitive disadvantages
  Wulf A. Kaal, Erik P.M. Vermeulen, Venture Capital as Dynamic Regulation of Disruptive Innovation (2016). SSRN: https://ssrn.com/abstract=2740477
- [2740477-010](https://wulfkaal.github.io/claims/2740477-010) [mechanism/argued] *(failure mode)* -- Incumbent firms facing the competitive disadvantage created by disruptive entrants respond by using the existing regulatory process itself to build obstacles to competition, which converts rulemaking into an instrument of incumbent protection.
  > To counteract such disadvantages, incumbent firms that are exposed to a perceived threat of disruptive innovation from disruptive firms may attempt to use the existing regulatory process to create obstacles for disruptive firms to compete.
  Wulf A. Kaal, Erik P.M. Vermeulen, Venture Capital as Dynamic Regulation of Disruptive Innovation (2016). SSRN: https://ssrn.com/abstract=2740477
- [2740477-011](https://wulfkaal.github.io/claims/2740477-011) [failure/argued] *(failure mode)* -- The rising complexity of innovation driven regulatory issues confuses political and policy makers about rapidly emerging disruptive change, which makes a coherent political and policy solution to those challenges less likely.
  > the increasing complexity of innovation-driven regulatory issues causes political and policy makers' confusion over rapidly-emerging disruptive change, making a coherent political and policy solution to these challenges less likely.
  Wulf A. Kaal, Erik P.M. Vermeulen, Venture Capital as Dynamic Regulation of Disruptive Innovation (2016). SSRN: https://ssrn.com/abstract=2740477
- [2740477-013](https://wulfkaal.github.io/claims/2740477-013) [predictive/argued] *(failure mode)* -- Technological transition will be a permanent state in the age of disruptive innovation, so the uncertainty and inconsistency caused by rulemakers' inability to react in time is a standing condition rather than a transitional cost.
  > technological transition is likely going to be a permanent state in the age of disruptive innovation, which exacerbates the uncertainty and inconsistency created by rulemakers' inability to react timely and adequately to disruptive innovation.
  Wulf A. Kaal, Erik P.M. Vermeulen, Venture Capital as Dynamic Regulation of Disruptive Innovation (2016). SSRN: https://ssrn.com/abstract=2740477
- [2740477-019](https://wulfkaal.github.io/claims/2740477-019) [mechanism/argued] *(failure mode)* -- Regulatory timing under disruptive innovation is a two sided risk: regulate too early and innovation is inhibited, withhold regulation too long and consumers and markets are harmed once regulatory inertia has formed around the disruptive product or service.
  > If policy makers regulate too early, they risk inhibiting innovation; if they withhold regulation too long, they may harm consumers and markets if regulatory inertia has set in around the disruptive product or service.
  Wulf A. Kaal, Erik P.M. Vermeulen, Venture Capital as Dynamic Regulation of Disruptive Innovation (2016). SSRN: https://ssrn.com/abstract=2740477
- [2740477-021](https://wulfkaal.github.io/claims/2740477-021) [failure/asserted] *(failure mode)* -- New regulations aimed at an innovative product can be obsolete before they are finalized.
  > New regulations pertaining to an innovative product could be obsolete before they are finalized.
  Wulf A. Kaal, Erik P.M. Vermeulen, Venture Capital as Dynamic Regulation of Disruptive Innovation (2016). SSRN: https://ssrn.com/abstract=2740477
- [2808132-001](https://wulfkaal.github.io/claims/2808132-001) [normative/argued] -- Regulation is usually reactive because it responds to facts, but the current environment is one of data rather than settled facts; regulation must therefore become proactive and dynamically responsive to data and trends.
  > Disruptive innovation creates increasing regulatory challenges. The reason for this is simple: Regulation is usually reactive, responding to facts. However, we currently live in a world of data, not facts. Regulation must therefore be proactive and dynamically
  Wulf A. Kaal, Erik P.M. Vermeulen, How to Regulate Disruptive Innovation - From Facts to Data (2016). SSRN: https://ssrn.com/abstract=2808132
- [2808132-002](https://wulfkaal.github.io/claims/2808132-002) [failure/argued] *(failure mode)* -- Ex post facts-based, trial-and-error rulemaking combined with stable and presumptively optimal rules often produces suboptimal regulatory outcomes, and those outcomes are no longer sustainable in an environment of exponential disruptive innovation.
  > of these. The ex-post facts-based and trial-and-error-rulemaking with stable and presumptively optimal rules7 in the existing regulatory framework8 often produces suboptimal regulatory outcomes that are no longer sustainable in an environment of
  Wulf A. Kaal, Erik P.M. Vermeulen, How to Regulate Disruptive Innovation - From Facts to Data (2016). SSRN: https://ssrn.com/abstract=2808132
- [2808132-003](https://wulfkaal.github.io/claims/2808132-003) [failure/argued] *(failure mode)* -- In an environment of exponential disruptive innovation, the information rulemakers need is less likely to materialize soon enough for traditional rulemaking to be effective, regulatory issues become more complex, and unknown future contingencies increase substantially.
  > environment of exponential disruptive innovation, relevant information for rulemaking is less likely to materialize soon enough for traditional rulemaking to be effective, regulatory issues become increasingly complex, and unknown future contingencies
  Wulf A. Kaal, Erik P.M. Vermeulen, How to Regulate Disruptive Innovation - From Facts to Data (2016). SSRN: https://ssrn.com/abstract=2808132
- [2808132-004](https://wulfkaal.github.io/claims/2808132-004) [failure/argued] *(failure mode)* -- Exponential disruptive innovation has the potential to overwhelm the existing regulatory process entirely, not merely to strain it.
  > increase substantially in the rulemaking process.12 In short, exponential disruptive innovation has the potential to overwhelm the existing regulatory process.13
  Wulf A. Kaal, Erik P.M. Vermeulen, How to Regulate Disruptive Innovation - From Facts to Data (2016). SSRN: https://ssrn.com/abstract=2808132
- [2808132-007](https://wulfkaal.github.io/claims/2808132-007) [failure/evidenced] *(failure mode)* -- A market leader's failure to invest in disruptive technologies often results in an abrupt loss of market dominance and frequently in total replacement in that market.
  > technology. 36 A market leader's lack of investment in disruptive technologies often results in the abrupt loss of market dominance and often even total replacement in such markets.37 Market leaders often shortsightedly refuse to cannibalize their market dominance
  Wulf A. Kaal, Erik P.M. Vermeulen, How to Regulate Disruptive Innovation - From Facts to Data (2016). SSRN: https://ssrn.com/abstract=2808132
- [2808132-008](https://wulfkaal.github.io/claims/2808132-008) [failure/argued] *(failure mode)* -- Market leaders, successful institutions, and managers fail specifically when they do not distinguish sustaining technologies from disruptive technologies.
  > markets.38 Market leaders, successful institutions, and managers fail when they do not distinguish sustaining technologies from disruptive technologies.39
  Wulf A. Kaal, Erik P.M. Vermeulen, How to Regulate Disruptive Innovation - From Facts to Data (2016). SSRN: https://ssrn.com/abstract=2808132
- [2808132-011](https://wulfkaal.github.io/claims/2808132-011) [mechanism/argued] *(failure mode)* -- Incumbent firms facing a perceived threat from disruptive innovation may respond by using the existing regulatory process itself to create obstacles that prevent disruptive firms from competing.
  > disadvantages, incumbent firms that are exposed to a perceived threat of disruptive innovation from disruptive firms may attempt to use the existing regulatory process to create obstacles for disruptive firms to compete.
  Wulf A. Kaal, Erik P.M. Vermeulen, How to Regulate Disruptive Innovation - From Facts to Data (2016). SSRN: https://ssrn.com/abstract=2808132
- [2808132-012](https://wulfkaal.github.io/claims/2808132-012) [mechanism/argued] *(failure mode)* -- The political system is less likely to be able to resolve the challenges of disruptive innovation because the increasing complexity of innovation-driven regulatory issues causes confusion among political and policy makers about rapidly emerging change.
  > political system is, however, less likely to be able to deal with the challenges of disruptive innovation because the increasing complexity of innovation-driven regulatory issues causes political and policy makers' confusion over rapidly-emerging disruptive
  Wulf A. Kaal, Erik P.M. Vermeulen, How to Regulate Disruptive Innovation - From Facts to Data (2016). SSRN: https://ssrn.com/abstract=2808132
- [2808132-013](https://wulfkaal.github.io/claims/2808132-013) [failure/asserted] *(failure mode)* -- The existing regulatory infrastructure cannot sufficiently distinguish beneficial innovation from harmful innovation and therefore cannot harness the beneficial kind.
  > The existing regulatory infrastructure cannot sufficiently distinguish and harness beneficial innovation. Rulemakers' inability to address regulatory issues associated with
  Wulf A. Kaal, Erik P.M. Vermeulen, How to Regulate Disruptive Innovation - From Facts to Data (2016). SSRN: https://ssrn.com/abstract=2808132
- [2808132-023](https://wulfkaal.github.io/claims/2808132-023) [failure/argued] *(failure mode)* -- Because formal rulemaking takes months and often years, regulators are still processing the previous product launch while new products reach the market, and new regulations pertaining to an innovative product can be obsolete before they are finalized.
  > rulemaking in the existing regulatory infrastructure, taking months and often years of regulatory procedure, is still dealing with the last product launch. New regulations pertaining to an innovative product could be obsolete before they are finalized.90
  Wulf A. Kaal, Erik P.M. Vermeulen, How to Regulate Disruptive Innovation - From Facts to Data (2016). SSRN: https://ssrn.com/abstract=2808132
- [2831040-010](https://wulfkaal.github.io/claims/2831040-010) [failure/argued] *(failure mode)* -- An existing regulatory infrastructure built on stable and presumptively optimal rules is largely incapable of addressing the ever increasing unknown future contingencies associated with disruptive innovation.
  > the existing regulatory infrastructure with stable and presumptively optimal rules is largely incapable of addressing the ever-increasing unknown future contingencies associated with disruptive innovation
  Wulf A. Kaal, Dynamic Regulation for Innovation (2016). SSRN: https://ssrn.com/abstract=2831040
- [2831040-013](https://wulfkaal.github.io/claims/2831040-013) [mechanism/argued] -- The faster the cycle of disruptive innovation, the shorter the timeline for society to adapt and respond with a familiar pattern of laws, regulation, and frameworks, which gives disruptive exponential innovation a potentially destabilizing effect on society.
  > The faster the cycle of disruptive innovation, the shorter the timeline for society to adapt and respond to such innovation with a familiar pattern of laws, regulation and frameworks.
  Wulf A. Kaal, Dynamic Regulation for Innovation (2016). SSRN: https://ssrn.com/abstract=2831040

**2017**

- [2834531-005](https://wulfkaal.github.io/claims/2834531-005) [failure/argued] *(failure mode)* -- The time frame for rulemaking in the existing regulatory infrastructure is largely inadequate to address the regulatory challenges created by disruptive innovation.
  > The time frame for rulemaking in the existing regulatory infrastructure is largely inadequate to address regulatory challenges associated with disruptive innovation.
  Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Regulation Tomorrow What Happens When Technology Is Faster Than the Law (2017). SSRN: https://ssrn.com/abstract=2834531
- [2834531-007](https://wulfkaal.github.io/claims/2834531-007) [failure/asserted] *(failure mode)* -- New regulations addressed to an innovative product can be obsolete before they are even finalized.
  > New regulations pertaining to an innovative product could be obsolete before they are finalized.
  Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Regulation Tomorrow What Happens When Technology Is Faster Than the Law (2017). SSRN: https://ssrn.com/abstract=2834531
- [2834531-017](https://wulfkaal.github.io/claims/2834531-017) [mechanism/argued] *(failure mode)* -- Faced with disruptive innovation, regulators believe their only options are reckless action, meaning regulation without sufficient facts, or paralysis, meaning doing nothing; in that bind caution beats risk and the precautionary principle becomes the default.
  > Regulators can find themselves in a situation where they believe they must opt for either reckless action (regulation without sufficient facts) or paralysis (doing nothing). Inevitably in such a case, caution tends to trump risk. The precautionary principle becomes the default position.
  Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Regulation Tomorrow What Happens When Technology Is Faster Than the Law (2017). SSRN: https://ssrn.com/abstract=2834531
- [2939127-001](https://wulfkaal.github.io/claims/2939127-001) [failure/argued] *(failure mode)* -- The core lawyer characteristics and skillsets produced by the existing legal education and regulatory framework are incompatible with what the practice of law in the 21st century demands.
  > Key lawyer characteristics and lawyers' core skillsets in the existing legal education and regulatory framework are incompatible with the demands on lawyers of the 21st century.
  Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127
- [2939127-002](https://wulfkaal.github.io/claims/2939127-002) [failure/argued] *(failure mode)* -- Disruptive innovation in law renders obsolete many and probably most of the traditional legal skills and characteristics that law schools currently cultivate.
  > Yet, disruptive innovation in law9 obviates many if not most of the traditional legal skills and characteristics of traditional lawyers.
  Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127
- [2939127-033](https://wulfkaal.github.io/claims/2939127-033) [predictive/argued] *(failure mode)* -- Exponentially increasing disruptive innovation will lead clients to routinely bring legal professionals problems that those lawyers cannot fully understand, inside a legal framework that does not always supply clear or helpful answers.
  > The exponentially increasing disruptive innovation worldwide will cause clients to frequently ask legal professionals to deal with issues lawyers cannot fully understand, within a legal framework that does not always offer clear or helpful answers.
  Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127
- [2957645-002](https://wulfkaal.github.io/claims/2957645-002) [failure/argued] *(failure mode)* -- Facts-based, ex-post, trial-and-error rulemaking cannot anticipate the regulatory issues created by innovation, so rulemakers may not realize, or may realize far too late, what new regulatory demands a given innovation generates.
  > First, because facts-based, ex-post, trial-and-error rulemaking cannot anticipate regulatory issues created by innovation, rulemakers may not realize—or may realize much too late—what new regulatory demands apply to a given innovation and its associated regulatory issue.
  Kaal, Dynamic Regulation via Contingent Capital (2017). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2957645
- [2957645-003](https://wulfkaal.github.io/claims/2957645-003) [failure/argued] *(failure mode)* -- Formal rulemaking in the existing regulatory infrastructure is too time consuming, and the speed of product innovation frequently renders regulations pertaining to an innovative product obsolete before those regulations are even finalized.
  > Formal rulemaking in the existing regulatory infrastructure is overly time-consuming7 and the speed of product innovation often makes regulations pertaining to an innovative product obsolete before such regulations are finalized.8
  Kaal, Dynamic Regulation via Contingent Capital (2017). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2957645
- [2957645-004](https://wulfkaal.github.io/claims/2957645-004) [failure/argued] *(failure mode)* -- The existing regulatory infrastructure, resting on stable and presumptively optimal rules, is largely incapable of addressing the unknown future contingencies associated with disruptive innovation.
  > Finally, the existing regulatory infrastructure, with stable and presumptively optimal rules, is largely incapable of addressing the unknown future contingencies associated with disruptive innovation.
  Kaal, Dynamic Regulation via Contingent Capital (2017). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2957645
- [2957645-006](https://wulfkaal.github.io/claims/2957645-006) [design/argued] -- The issuance of contingent capital securities is a promising dynamic regulatory mechanism that can help address the suboptimal regulatory outcomes associated with disruptive innovation.
  > The issuance of contingent capital securities (CCS) is a promising dynamic regulatory mechanism that can help address the aforementioned suboptimal regulatory outcomes associated with disruptive innovation.
  Kaal, Dynamic Regulation via Contingent Capital (2017). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2957645

**2019**

- [3411897-010](https://wulfkaal.github.io/claims/3411897-010) [failure/argued] *(failure mode)* -- Market leaders, successful institutions, and managers fail specifically when they do not distinguish sustaining technologies from disruptive technologies.
  > Market leaders, successful institutions, and managers fail when they do not distinguish sustaining technologies from disruptive technologies.
  Wulf A. Kaal, Decentralization - Past, Present, and Future (2019). SSRN: https://ssrn.com/abstract=3411897
- [3411897-011](https://wulfkaal.github.io/claims/3411897-011) [failure/argued] *(failure mode)* -- A market leader's lack of investment in disruptive technologies often causes abrupt loss of market dominance and even total replacement, because market leaders shortsightedly refuse to cannibalize their own dominance through disruptive technologies.
  > A market leader's lack of investment in disruptive technologies often results in the abrupt loss of market dominance and often even total replacement in such markets. Market leaders often shortsightedly refuse to cannibalize their market dominance through the use of disruptive technologies.
  Wulf A. Kaal, Decentralization - Past, Present, and Future (2019). SSRN: https://ssrn.com/abstract=3411897
- [3411897-012](https://wulfkaal.github.io/claims/3411897-012) [failure/evidenced] *(failure mode)* -- Nokia, Kodak, and Blackberry all collapsed after fast changes in their markets rendered their products and services irrelevant, illustrating that successful companies drift into obscurity when they fail to embrace change.
  > examples of successful companies that drifted into obscurity after failing to embrace change. Nokia, Kodak, and Blackberry are prominent examples. All these firms collapsed after fast changes in their respective markets rendered their products/services irrelevant.
  Wulf A. Kaal, Decentralization - Past, Present, and Future (2019). SSRN: https://ssrn.com/abstract=3411897

**2021**

- [3808859-002](https://wulfkaal.github.io/claims/3808859-002) [failure/argued] *(failure mode)* -- Market leaders fail against disruptive technologies because they shortsightedly refuse to cannibalize their own dominant position, and that refusal often produces abrupt loss of market dominance or total replacement.
  > A market leader's lack of investment in disruptive technologies often results in the abrupt loss of market dominance or even total replacement in such markets. Market leaders often shortsightedly refuse to cannibalize their market dominance
  Wulf A. Kaal, Decentralization – Why We Need Technology Infrastructure Upgrades (2021). SSRN: https://ssrn.com/abstract=3808859

## Verify

Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust.

    curl -s https://wulfkaal.github.io/entities/disruptive-innovation.md | sha256sum

**Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.