This chapter focuses on applying innovation theory in general, and disruptive innovation theory in particular, to inform the innovation and entrepreneurship competency framework. It explores disruptive innovation degrees, new entrants, low-end and disruptive innovation, healthcare disruptive innovation, the capitalist dilemma, efficient market theory, balancing efficiency and innovation, and measuring innovation. Disruptive innovations are a type of innovation wherein an innovator brings a product to a new market or creates new business model that is simple, convenient, accessible, and affordable. Innovation and entrepreneurship are two of the popular concepts and terms in business and economics today. Disruptive innovation theory, conceived by Clayton Christensen, describes how organizations get stuck going in one direction and ignore other directions that may have more value. The classic innovator's dilemma, the foundation for disruptive innovation theory, states that if an incumbent company follows conventional business practices and stays too close to its current customers by providing sustaining innovations, it may be sacrificing its future innovation opportunities.