Conjecture

Innovation splits four ways, not two, and the fourth is the one that kills incumbents. The old distinction was incremental, refining components within a stable architecture, think a fifth razor blade or successive iPhone generations, demanding real skill without new science; and radical, resting on different engineering and scientific principles and often opening whole new markets, think the first iPhone, the steam engine, the Wright brothers, the lightbulb. That taxonomy could not explain industry shifts precipitated by minor technical improvements, so two more were added. Modular innovation changes one or more core design concepts while the architecture linking components stays constant, as when an analogue dialling device is swapped for a digital one and the rest of the telephone is left alone. Architectural innovation leaves the components' core design concepts unchanged and alters the way they are linked.

Capital mechanisms