There has been some discussions lately on whether the crisis will increase or decrease innovation (see for example Mark Evans or Jason Kolb). By innovation, I mean a new product/service addressing successfully an unmet need in a new manner (not a perfect definition but it should be sufficient for now). I've been changing my mind on this topic several times. Here is my latest attempt to answer the question.
The different arguments go the following way:
- Less innovation: there is less funding available for ideas hence there will be less new products hence less innovation
- Same innovation: though there is less funding available, (all) good ideas will still get funded
- More innovation: me-too is not sufficient to build a business anymore. At the same time there are plenty of talented people with more time to find ideas. Hence innovation should increase.
The implicit assumption in the first two arguments is that investors are good judges of what is or is not innovative. Nothing proves this assumption. The third argument implies that they are constant economies of scale in innovation. The reality is that there are diminishing economies of scale when it comes to innovation. Big corporation with their massive R&D budgets tend to be less innovative than start-ups be it in the web or healthcare sectors. However, one characteristic of the process of innovation is serendipity so the more people do "stuff", the more people find innovative "stuff".
Taking the above ingredients and mixing those leads me to my current "work-in-progress conclusion": there will be much more innovation in relative terms but a bit less in absolute terms.
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