Thought Leader Interview: Clayton Christensen

In your research on the path to prosperity, you and your colleagues found that most innovations target the ‘consumption economy’, ignoring the significant opportunities that exist in the ‘non-consumption economy’. Please explain.

The consumption economy is made up of customers who have the income, time and expertise to purchase and use existing products or services in a market. Most businesses, therefore, invest in innovations that target these consumers. As a result, the market for these consumers is already mostly defined. When you already know who your customers are, it’s relatively easy to see potential for growth.

Non-consumers, as their name implies, consist of individuals who, for some reason, are not able to purchase and use a product or service, and who may not even be able to tell you exactly what they need. In almost every economy, non-consumption outweighs consumption — so innovation that targets non-consumption holds immense promise for growth.

For example, in the late 1980s, commissioned a prominent consulting firm to conduct a study estimating the