What characterizes 'disruptive technology'?

Disruptive technology is characterized by innovations that create new markets and fundamentally alter existing industries. Such technologies often introduce a different value proposition that attracts a new demographic of consumers or enhances the efficiency and accessibility of products and services. This disruption can lead to the displacement of established market leaders, as they may struggle to adapt to the new business models and consumer expectations that emerge as a result of these innovations.

For instance, the advent of smartphones not only changed how people communicate but also transformed entire industries, including telecommunications, photography, and computing. This type of technology often starts in a niche market or may be viewed as inferior by the mainstream market initially, but it quickly gains traction and ultimately reshapes industry standards. This is why the correct characterization of disruptive technology involves its capacity to create new markets and alter industries significantly.