The Impact of Disruptive & Digital Technological Change (AQA A Level Business): Revision Note

The impact of disruptive technologies

• Disruptive technology is any new technology that fundamentally changes how an industry operates

  • It often creates an entirely new market or makes existing products, services or business models obsolete faster than businesses can adapt

• Unlike gradual technological improvements, disruptive technology tends to overturn an industry's existing rules altogether, rather than simply improving what already exists

  • Artificial intelligence (AI) is the clearest current example of a disruptive technology, alongside autonomous vehicles, robotics and blockchain

The impact on business

• Entire business models can be made obsolete very quickly, sometimes within a few years, and others changed beyond recognition

Example

Since Uber launched in London in 2012, the number of licensed black cabs has fallen by more than 34 per cent, as the traditional taxi business model has struggled to compete with app-based ride-hailing

• New markets can be created almost overnight, offering huge rewards to businesses that move early

Example

Wayve, a UK self-driving vehicle company, raised $1.2 billion in funding in February 2026, as investors backed an entirely new 'robotaxi' market that barely existed a few years earlier

• Competitive advantage can shift rapidly from established, well-resourced businesses to smaller, more agile ones

Example

Revolut built up 13 million UK users by the time it received a full UK banking licence in 2026. Revolut and other neobanks now hold over 20 per cent of the market among customers who opened their main bank account in the last three years, taking market share directly from established high street banks

• Regulation and law often lag behind disruptive technology, creating legal uncertainty for businesses operating in new areas

Example

E-scooters have been sold and used widely in the UK for years, yet privately owned e-scooters are still illegal to ride on public roads or pavements

Only government-approved rental trial schemes are legal, and these have been repeatedly extended, while the government continues to review the evidence before deciding on permanent rules

Impact on stakeholders

Impact by business size and sector

Business size

• Small businesses and start-ups are often the source of disruption themselves

  • They can move quickly and are not tied to existing ways of working

  • They are, though, highly vulnerable if a larger, better-resourced rival adopts the same technology

• Large, established businesses usually have far greater resources to invest in new technology

  • However, they can be slower to act due to their size, existing systems and organisational culture

  • They are also likely to suffer the innovator's dilemma

    • The challenge faced by successful, established businesses that risk being overtaken by disruptive innovation because they focus on improving existing products rather than pursuing new ones

  • Many large businesses respond by buying smaller disruptive start-ups rather than competing with them directly

Business sector

• Creative and content industries have been hit hard by generative AI

  • There is, though, some indication that consumers are weary of AI and prefer the human touch

    • E.g. Coca-Cola faced backlash over its AI-generated Christmas adverts in both 2024 and 2025, with viewers calling the ads 'soulless' and 'digital slop'

• Transport and logistics are being changed enormously by autonomous vehicles

  • E.g. Starship Technologies' small delivery robots operate in UK towns including Leeds, Manchester and Milton Keynes in partnership with Co-op and Just Eat

• Financial services have been disrupted by fintech start-ups

  • E.g. Wise, the UK money transfer company, grew its customers by 21 per cent and the amount of money sent abroad through it by 25 per cent in 2026 – business that would traditionally have gone through banks instead

• Sectors involving physical, hands-on and in-person work, such as personal care and construction, remain among the least exposed to AI disruption

  • In 2025 43 per cent of UK construction workers reported that they have no digital capabilities at all in their day-to-day work

The impact of digital technologies

• Digital technologies are those based on computerised or internet-connected systems used to communicate, process information and carry out transactions

  • Examples include e-commerce, mobile apps, social media, cloud computing and digital payments

• Digital technologies tend to change more gradually than disruptive technologies

  • They usually form the everyday infrastructure most businesses now rely on, rather than suddenly overturning an entire industry

Impact on business

• Businesses of any size can reach customers well beyond their local area, often at very low cost, through websites, apps and social media

Example

Gymshark started as a small UK startup selling fitness clothing, and grew into a billion-pound global brand largely through social media and fitness influencers, reaching customers worldwide without ever needing a large traditional retail presence

• Digital systems allow much faster communication and data-driven decision-making across every function of a business

Example

easyJet uses dynamic pricing, adjusting ticket prices in real time based on demand, how many seats remain and booking trends

Pricing decisions are made automatically and continuously rather than set once in advance

• Remote and flexible working has become far more practical, changing how and where employees work

Example

By 2025, around 28 per cent of UK workers were working in a hybrid pattern, splitting their time between home and the workplace

This way of working relies on digital tools such as video calls, cloud file-sharing and messaging apps

• Reliance on digital systems significantly increases exposure to cyber-attacks and system failures

Example

In July 2024, a faulty software update from cybersecurity firm CrowdStrike caused a huge IT outage worldwide

Flights were grounded, banks were disrupted, and the FTSE 100 fell by around £21 billion in a single day

Impact on stakeholders