While governments deliberate responses to the financial crisis of 2008 and its aftermath, one important question should not be overlooked: What will be the long-term impact of the crisis on technological innovation? As part of the fallout from the financial crisis, funds for many types of economic activity have become far more scarce—and that includes research and development. As economists know, innovation is a key driver of economic growth. Any significant decline in the rate of invention would have a much bigger impact on growth over the next 10 to 20 years than whatever few percentage points of GDP we may lose during the next couple of years because of recession. Thus, we need to be concerned about the impact of the financial crisis on the system of innovative activity in the United States and elsewhere.
THE DOWNTURN MANIFESTO
A manager’s guide to surviving—and thriving—in recessionary timesThe notion that a recession is problematic for the rate of innovation is a controversial one. No less a figure than economist Joseph Schumpeter welcomed downturns because he thought that they weeded out old processes and products in the economy. Schumpeter’s conception of the innovative process held that successful... To read the complete article, login or sign-up using the form below.
Register or login to read this article.
Register for free and read this article now.
Already have online access? Login below.
Do you subscribe the MIT Sloan Management Review in print? Enter the email address and password you used when ordering. Don't remember? Lookup your subscription account information
- Register for free access to recent articles and the current issue of MIT Sloan Management Review.
- Subscribe and read articles from the past three years online.
- Premium subscription give you access to the entire archive of articles.
