Bhaskar Chakravorti of Harvard Business School offers insights about entrepreneurship and innovation during a downturn,
“If history is any guide, we can expect some significant industry shapers to emerge from the current crisis,” observes Bhaskar Chakravorti in a new interview about how companies can find opportunity in the economic downturn. Chakravorti, a senior lecturer at Harvard Business School, offers some helpful ideas about how to prosper in a recession. His suggestions include:
- Think in terms of “substitution effects.” In a downturn, consumers may substitute more car repairs for a new car — and thus business may be good for mechanics. Also in demand, according to Chakravorti: ”affordable luxuries” and products that provide good value for their price.
- One problem: ”Capital is in short supply,” Chakravorti says. However, if entrepreneurs can overcome that, there are opportunities. ”Technologies and materials left unused due to the collapse of one industry can be creatively re-directed toward others than can take advantage of the low input costs,” he observes.
- “Think business model,” advises Chakavorti. With businesses cost-cutting, there may be opportunities for entrepreneurs to develop innovative business models, he notes.
You can read the interview at Harvard Business School Working Knowledge.