How is innovation faring during the downturn? The answer depends on whom you ask.
How is innovation faring during the economic downturn? The answer depends on whom you ask. Recently, we have seen interesting, but somewhat conflicting, reports on the state of innovation in the U.S. economy.
First, The Wall Street Journal reported some surprising good news last week: Despite the economy, large U.S. companies spent almost as much on R&D in the fourth quarter of 2008 as they did a year prior. Write Justin Scheck and Paul Glader of The Wall Street Journal: “Big R&D spenders say they’ve learned from past downturns that they must invest through tough times if they hope to compete when the economy improves.”
But Scott Anthony, president of Innosight, worries in a blog item on the Harvard Business Publishing site that, in this difficult economy, companies could focus too much of their R&D on improving existing products — rather than on bigger innovation opportunities.
And Sramana Mitra, in a column for Forbes.com, suggests that we need to address systemic economic problems that inhibit innovation – such as a focus on short-term speculation. One key, she thinks: Government funding of technology research at universities. She cites the Internet as an example of a technological breakthrough that emerged out of “a sustained R&D effort over a long period of time. ”
Similarly, diverging views on the future of innovation are represented in the Spring 2009 issue of the MIT Sloan Management Review: Clayton M. Christensen of Harvard Business School predicts that the downturn will be good for innovation, whiles Joshua Gans of Melbourne Business School expresses concern about the effect of the financial crisis on technology start-ups.
What do you think? Are these auspicious or inauspicious times for innovation?