Breakthrough innovations cover not just what companies offer but how they operate, interact with users, and go to market. Here are eight examples that are transforming industries and economies.
Innovation is a critical ingredient in any growth recipe. And the biggest growth—both for the innovator and the broader economy—comes from revolutionary innovations. Such breakthroughs don’t only result from new products or services. Some of the most important recent advances have been spurred by new business models, processes, and experiences.
We define these four categories of innovation as follows:
- product or service innovation: an offering that either is new or improves an existing one
- experience innovation: customer touchpoints and interactions that complement and improve offerings
- process innovation: a new approach to developing, manufacturing, distributing, or delivering an offering
- business model innovation: changing the value chain, diversifying profit streams, altering the economic model, or evolving the delivery approach of an offering
We have rounded up eight examples of revolutionary breakthroughs that highlight the range of innovations that can accelerate growth and transform industries. What makes an innovation revolutionary? First, it is truly novel, attesting to the innovator’s bold vision and willingness to take risks. Second, it exerts an outsize influence, enabling secondary innovations or spurring societal changes. Third is the size of its impact: The innovation materially and durably shifts the economics of entire markets. Last, that effect extends beyond individual companies to entire ecosystems and even other industries.
Electric vehicles
The shift from fuel to batteries as a means of powering vehicles is transforming numerous industries, from logistics to mining. It has also spawned advances in related fields, such as battery technology and urban transportation, while focusing attention on the importance of emission reduction. Since building electric vehicles (EVs) requires very different capabilities than traditional automotive manufacturing, the car industry has been severely disrupted. New OEMs have reshaped the market with new value chains and financing and aftermarket offerings. Electric vehicles have also accelerated innovation in driver assistance systems and connectivity.
GLP-1 medications
The introduction of GLP-1 (glucagon-like peptide-1) agonists has been lauded as a public health breakthrough. Developed to treat type 2 diabetes, GLP-1 medications can also help users reduce their weight by 15 to 20 percent. By lowering the need for obesity-related therapies, surgeries, and end-of-life care, the medications have the potential to substantially lower healthcare spending. Their appetite modulation effects may, in turn, materially shift eating habits, affecting the consumer goods and food service industries.
Blockchain
Blockchains are decentralized digital ledgers that store records across a network, ensuring transparency, immutability, and tamper resistance. By offering a cost-effective, secure way to handle transactions and private data, blockchain technology is transforming industries from healthcare to financial services. Payments, bonds, and securities transacted on blockchain are key uses that are accelerating growth.
Digital marketplaces
Platform-based digital marketplaces have revolutionized the way that businesses gain scale. Some platform-focused companies, such as Alibaba and Uber Technologies, have become familiar consumer names. Some sector-specific platforms, such as Valve’s Steam for gaming, have established ecosystems extending beyond their industry borders. As the growing number of users and interactions feeds increasing amounts of data, the presence and impact of platforms will accelerate.
CRISPR
The gene-editing technology and process that won the 2020 Nobel Prize in chemistry is spurring breakthroughs in the biotech and pharmaceutical industries. CRISPR, in combination with genomic and phenotypic data, allows scientists to make targeted changes to genes. Such changes can enable fundamentally new therapies for humans and increase disease resistance and yields of crops. Extending the technology to synthetic biology could transform manufacturing, environmental remediation, and other fields.
Transformer models
Transformer models (also called “sequence-to-sequence models”) may not ring bells, but gen AI certainly should. A type of neural network that learns context and meaning, transformer models underpin large language models. These models, in turn, are the foundation of gen AI. The technology is forecast to generate as much as $4.4 trillion in productivity gains, primarily in customer operations, marketing and sales, software engineering, and R&D.
Fracking
The term “fracking,” from “hydraulic fracturing,” describes an unconventional method of extracting oil and natural gas by injecting high-pressure fluid into rock formations. By allowing companies to tap resources previously considered uneconomical, fracking has revolutionized energy production—particularly in the United States, turning the country from an energy importer to an exporter. It has also lowered energy costs around the world while reshaping trade balances.
Cost-plus inversion
The traditional “cost-plus” approach to government contracts, whereby agencies specify requirements, move through prototyping phases, and pay contractors a set percentage above the development and production costs, can lead to long lead times, slow technology adoption, and overruns due to misaligned incentives. In a growing new method, companies are building products and production facilities for offerings that they believe governments will need, which aligns incentives to accelerate innovation and reduce cost. The result has been a venture capital boon for established industries such as defense and energy, a revitalization of industrial bases, tens of thousands of new jobs, and the ability to get capabilities to markets faster.
