The Innovator's Dilemma is a book, published just over ten years ago, the central argument of which is that it is very hard for dominant firms in a market to innovate radically, because by doing so they risk destroying their existing business. If they don't, though, they make themselves vulnerable to some upstart which doesn't need to worry about the past and which invents a new way of doing things -and so the original company gets destroyed anyway. Which is what makes it a dilemma.
The first example explored in the book is the development of computer hard disks - from the earliest refrigerator-sized 5Mb disks onwards. To oversimplify horribly, at each stage of significant and disruptive technical innovation, new entrant firms dominated the new technology, leaving the established firms of the previous generation to keep squeezing performance out of the earlier technology.
Seagate was one of the beneficiaries of this process, riding the wave of the 5.25 inch disk in the 1980s, and thereby ensuring that none of us has ever heard of the companies which dominated the 8 inch disk industry of the 1970s. Seagate was in turn slow to move over to the next generation of 3.5 inch disks, but was quick enough to survive and eventually prosper again.
But now along comes the most disruptive challenge to the hard disk industry of all. For the last fifty years, hard disks have been increasingly super-charged gramophone records: at their heart, there is still a real disk rotating very fast on a real spindle. That's not the only way to store data, as the memory stick revolution shows, but until now, solid state drives (which have no moving parts) have been too small and expensive to replace traditional hard disks as the main storage device for a computer. Now that's changing, with real advantages for users as a result.
None of that has much obviously to do with public strategy. Except that if a major and innovative player in an industry characterised by rapid change and by innovation cycles disruptive enough to change the landscape of the industry on a fairly regular basis, and where somebody has pretty much written the textbook on what the problem is and how to manage through it, still trips over exactly the same problem and still finds it hard to respond to the market signals anticipating change, just how surprising is it that governments fumble with the same problem?