Forbes Technology Council. For more than a century, economic power was defined by capital, natural resources and industrial scale. The countries that shaped each era, and the leading enterprises within those countries, were those that controlled inputs like coal and oil and turned them into industrial capacity.
AI is now shifting that power balance. Through my work in the government of Armenia, I’ve seen how technology investments can directly impact innovation. AI is infrastructure-intensive, requiring vast amounts of electricity, advanced computing systems and highly skilled engineers. These three pillars of AI infrastructure development—energy, compute capability and talent—depend on significant collaboration between the public and private sector.
Late Harvard Business School professor and author Clayton Christensen coined the term “disruptive innovation,” which has become a catchall for any type of transformation in business or technology. But its original meaning focused on how smaller, more focused players can challenge incumbents by entering overlooked segments, addressing specific customer requirements and moving upward over time.
While Christensen’s work primarily focused on incumbents and newcomers in the corporate world, I notice parallels in my work with leaders making decisions about tech investments at the national level. These lessons carry over from the private to the public sector, and vice versa.
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Large organizations frequently fall into the trap of looking upmarket and not down. But this opens up the space for outsiders to attack from below. Innovators, regardless of size, disrupt incumbents by targeting niche markets that established players ignore. And leaders who recognize and reverse this pattern early on have an advantage.
Smaller players have a chance to position themselves in niches that may not seem significant now but have explosive growth opportunities within the next decade. I see examples of this in my work with smaller countries that don’t have the same capital as larger nations to invest in their AI infrastructure. But they don’t need to do everything. I believe the advantage of being small is in the ability to specialize, choosing where to compete and investing resources in developing those areas.
Three Forces In The Next Wave Of Innovation
Established industry leaders have underestimated past waves of tech innovation at their own peril. They either failed to recognize the real value of novel opportunities, or they tried to spin them off using existing infrastructure, processes and value networks. Kodak failed to take digital photography seriously, despite inventing the first digital camera in 1975. Blockbuster passed on a chance to buy Netflix for $50 million in 2000. Uber and Lyft used mobile technology to scale and outpace the traditional taxi industry.
AI is accelerating this trend at an unprecedented pace. I believe that the best way to future-proof your organization is to have a stake in this wave of innovation. You can either choose to join the disruptors, or you are likely to be disrupted. I predict that these three converging forces of AI development will widen a strategic advantage for smaller players in the next few years.
Mkhitar Hayrapetyan, Minister of High-Tech Industry of the Republic of Armenia.
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