The Innovator’s Dilemma: 3D Printing and Disruptive Technology

By on February 6th, 2020 in Ideas

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Clayton Christensen
Clayton Christensen

Charles R. Goulding looks at the legacy of recently passed Clayton Christensen.

Clayton Christensen, the world-famous Harvard business school professor, died in January 2020.

Clayton wrote the bestselling book “The Innovator’s Dilemma”, which has been a long-standing business must-read.

He challenged mainstream business thinking by teaching us that businesses should be aware of lurking disrupters. One of his own disruptive thoughts was that for innovators it wasn’t always best to listen to what the customer thought mattered.

I suggest that every 3D print business manager consider reading The Innovator’s Dilemma.  

One of the core concepts of his disruption theory was it could be perilous to disregard the lower segment of a market where a potential competitor disrupter could gain a foothold and upend an established market. One of his examples was Nucor, who revolutionized the steel industry with mini-mills.

It used to be a lot more difficult to achieve that kind of industrial disruption, but with the power of today’s 3D printing technologies, it’s a far easier. Those in the 3D printing industry hoping to cause some disruption should look at the Innovator’s Dilemma. 

The Research & Development Tax Credit

Enacted in 1981, the now permanent Federal Research and Development (R&D) Tax Credit allows a credit that typically ranges from 4%-7% of eligible spending for new and improved products and processes. Qualified research must meet the following four criteria:

  • Must be technological in nature

  • Must be a component of the taxpayer’s business

  • Must represent R&D in the experimental sense and generally includes all such costs related to the development or improvement of a product or process

  • Must eliminate uncertainty through a process of experimentation that considers one or more alternatives

Eligible costs include US employee wages, cost of supplies consumed in the R&D process, cost of pre-production testing, US contract research expenses, and certain costs associated with developing a patent.

On December 18, 2015, President Obama signed the PATH Act, making the R&D Tax Credit permanent. Since 2016, the R&D credit can be used to offset Alternative Minimum Tax (AMT) or companies with revenue below $50MM and, startup businesses can obtain up to $250,000 per year in cash rebates that can be applied directly to payroll taxes.

Conclusion

Apart from his disrupted established business thinking, Clayton was also known as an extremely kind man. He will be missed. 

By Charles Goulding

Charles Goulding is the Founder and President of R&D Tax Savers, a New York-based firm dedicated to providing clients with quality R&D tax credits available to them. 3D printing carries business implications for companies working in the industry, for which R&D tax credits may be applicable.