Has the prolonged economic downturn affected innovation in the U.S.? Bloomberg’s latest Innovation Index of the 50 Most Innovative Countries ranked over 200 countries on a scale of 0 to 100 percent on seven factors, including R&D intensity, productivity, high-tech density, researcher concentration, manufacturing capability and patent activity. Not only did the U.S. rank number-one overall, but it also ranked number-one in high-tech density, and in the top 10 for R&R intensity (ninth), productivity (third) and patent activity (sixth).
These results don't surprise me one bit. It’s often said that creativity thrives under constraints, and I believe a tough economy has forced businesses both small and large to get more innovative, not less. Below are five factors I think have helped us become more innovative in the downturn:
1. The rise of crowdsourcing. In tough times, people try to do more with less. Crowdsourcing sites such as Spigit encourage that by allowing businesses to generate innovative ideas from a crowd of individuals for low or no cost. To get a sense of the rapid rise of the crowdsourcing trend, just check out the practically endless list of open innovation resources and communities at Open Innovators. It has never been easier to tap into ideas from all over the world.
2. The growth of social media. Innovation is easier when all you have to do is glance at your social media feeds on your smartphone to see what your customers want, or check Twitter to instantly tap into the zeitgeist. Smart companies use social media not just for outreach to customers but also as a “listening tool” to see what they want now … and spot trends as to what they might want in the future. With that information in mind, you can develop targeted innovation.
3. Globalization. The entire world has been hit with tough times, while globalization has forced us to compete with businesses all over the world. At the same time, the shrinking globe has enabled innovation by allowing U.S. business owners to tap into the best ideas—no matter where they originate. Globalization also allows us small-business owners to carry out our innovations more affordably by using overseas manufacturers and outsourcing to workers who have the skills we need, wherever they may be.
4. Affordable technology. The preponderance of the high-tech industry helped push the U.S. to its No. 1 ranking in Bloomberg’s index. And high-tech innovations that have taken off simultaneously with the economic downturn have made innovation more affordable than ever before—and more open to a wider range of business owners. Not so long ago, high-tech innovation required huge investments in hardware, software and servers. When you can start an online business for practically nothing, using inexpensive laptops and affordable cloud-based services, it’s easy to be experimental.
5. An “anything goes” attitude. As the saying goes, when you’ve got nothing, you’ve got nothing to lose. That’s why there are always stories of startups that launch on a card table or in a garage and become hugely successful. Yes, some people get scared and cling to the status quo in tough times. But just as many take the opposite tactic, and it’s they who are more likely to succeed. When you’ve got nothing to lose, it’s easier to take chances and try something new.
Has the economic downturn made your business more innovative? Why or why not?
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