BREAKING THROUGH DISRUPTION 33 W H AT T H E D I S R U P TA B I LI T Y INDEX MEASURES The Disruptability Index measures an industry’s current level of disruption as well as its susceptibility to future disruption. To diagnose the current level of disruption, we “follow the money” along two dimensions: from incumbents, where we look for evidence of declining financial performance; and to disruptors, where we search for evidence of new competition. Our research shows disruptors are successful in three ways: they deliver significant innovation in products and experiences for consumers; they break down incumbent defenses and barriers to entry; and, they dramatically lower historic prices through new cost structures. We therefore measure industry susceptibility to disruption along these three dimensions, assessing how innovative, defensible, and efficient incumbent businesses are. The index assesses 18 industry sectors and then 106 industry segments within them. We use a combination of industry-level and company-level performance data, with the latter informed by analysis of the 10,000 largest listed companies (based on revenue).