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Over a decade ago, the business world was eager to classify any slightly unique concept or advancement as “disruptive innovation.” The term was initially introduced by American academic and business consultant Clayton Christensen in his 1997 book The Innovator’s Dilemma. It primarily referred to how small companies could challenge larger firms in the market, starting at the lower end and gradually moving upmarket, thereby disrupting the core operations of established competitors.
However, by the mid-2010s, the notion of disruptors faded as critics began to observe how the term had degenerated into a business buzzword rather than a descriptor of genuine change. Jill Lepore, a Harvard history professor, penned an article for The New Yorker criticizing the misapplication of “disruptive innovation” in the business sphere, pointing out that many companies labeled as “disruptive” failed to oust incumbents. Her critique led to a reassessment in business circles, paving the way for terms like “transformative innovation” in the 2020s.
Moreover, “transformational” contrasts with “disruptive” by envisioning positive systemic transformation. Transformational innovation results in incremental and enduring impacts, which is crucial in an era of systemic transitions, such as climate change, ESG considerations, AI developments, and other significant global advancements. Here are five reasons why entrepreneurs today should prioritize transformational innovation instead.
1. This is where technology creates social impact
Entrepreneurs can be transformational innovators by creatively employing technological solutions to foster meaningful change, resulting in a greater economic impact, which subsequently produces a lasting social impact. This entrepreneurial focus addresses “grand challenges” that societies face, ranging from poverty alleviation to environmental sustainability and health and well-being goals, as outlined in the United Nations’ Sustainable Development Goals for 2030. Specifically, technology entrepreneurs with high growth potential can leverage distinctive opportunities to generate social value, for instance, through open-source collaboration in problem-solving, social media platforms for advocacy campaigns, and data analytics for personalized lifestyle and healthcare improvements. It’s widely accepted that technology is the driving force behind transformational innovation.
2. It’s people-focused
Before attempting to improve consumer behavior, it’s essential to first understand it. Thus, transformational innovation involves utilizing people’s adaptability to facilitate significant and lasting transformations. To achieve this, entrepreneurs need to gain acceptance from the broader population, which often demands an understanding of diverse groups rather than a narrow focus. Success requires building trust in your venture so that people embrace it and commit to the process to gain value.
3. It is driven by the $8 trillion global longevity market
In its July 2025 report, Swiss banking giant UBS highlighted transformational innovation as the sector where investors should anticipate promising returns in the coming years. Longevity is identified as a leading industry driving valued growth in this space, alongside AI, power, and resources.
The longevity market is expected to grow from $5.3 trillion in 2023 to $8 trillion by 2030, which will surpass AI industries which are only estimated to reach $1.16 trillion by 2027. The longevity market is transforming the global economy, according to UBS, which says that the change is being fuelled by increasing life expectancy and ageing populations worldwide.
4. Transformational innovation industries are stable
Innovation is a key driver of long-term equity performance. According to UBS, transformational innovation industries offer “durable, secular growth” that the bank believes can withstand short-term market volatility. The Swiss bank also suggests that if there are potential market dips in these industries, they are likely to be short-term and would act as useful entry points for long-term investors.
5. It’s a brave new world
While disruptive innovation is largely about creating cheaper alternatives, transformative innovation is about creating whole new market spaces with completely different frameworks to what already exists. For entrepreneurs, working within these industries can help them experiment with newer and better business models. It’s all about exploring the untapped potential.
All in all, to embrace transformational innovation, an entrepreneur must be prepared to embrace change. It requires one to be proactive and have the ability to anticipate future trends that will come with it. To remain at the forefront of this entrepreneurial revolution, entrepreneurs must develop a multi-pronged innovation strategy through planning and in-depth research.
Most importantly, entrepreneurs should develop a culture of innovation in their businesses, where entrepreneurs, managers, CEOs, employees, consumers and clients all collaborate to form a cohesive creative force. Leaders should inspire others to be bold, intellectually brave and challenge existing paradigms. Entrepreneurs should have a vision, forge strategic partnerships and create meaningful industry-level changes, even if they own a small business with limited resources. To remain competitive and to lead industry trends, entrepreneurs today must engage with the concept of transformational innovation.
We are now in the year 2025 — it’s time to change the game.
More than a decade ago, business gurus were quick to label any idea or development that was mildly novel as “disruptive innovation.” Originally coined by American academic and business consultant Clayton Christensen in his 1997 book The Innovator’s Dilemma, it was used largely to describe how small businesses could challenge larger players within a market, often entering at the low end and moving upmarket and disrupting established competitors’ core business.
But in the mid-2010s, gone were the days of the so-called disruptors, as critics began noting how the term had become a business buzzword rather than a term that was describing meaningful change. Jill Lepore, a professor of history at Harvard, wrote an article for The New Yorker about how “disruptive innovation” is being used inaccurately in the business world, stating that many companies described as “disruptive” never succeeded in displacing incumbents. Her critique sparked a major rethinking in business circles, which made way for terms like “transformative innovation” in the 2020s.
Furthermore, when compared with “disruptive,” the word “transformational” helps you visualize positive systemic change. The effects caused by transformational innovation are incremental and long-lasting, and frankly, quite relevant in the age of systemic shifts, such as climate change, ESG and sustainability factors, AI technologies and other major global innovations. Here are five reasons why entrepreneurs today need to focus on transformational innovation instead.
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