In this chapter we examine theories of disruptive innovation and take the reader through the development of Clayton Christensen’s theory of disruptive innovation. One of the paradoxes of disruptive innovation is why incumbent firms fail to respond to the competition. To answer this we review the literature and provide several arguments that suggest the higher education sector is vulnerable to a disruptive innovation and/or business model. We provide several examples of business model innovations, from Uber to Ryan Air. Finally, we turn our attention to disruption in education and provide a compelling argument that universities are facing a perfect storm of reduced government funding, demanding students, increasing competition from within the sector, and competition from new providers who are innovative, flexible and market oriented.
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