The news on Apple and Google is grim, as their stocks fall sharply from their highs. The fear is that people will pull back their discretionary spending as the recession unfolds, hurting sales and advertising.
That may be true for the immediate months ahead, but for anyone taking the medium and long-term view, it is clear that innovation and design pay real returns in revenues, profits and higher stock prices.
The new S&P/BusinessWeek Global Innovation Index shows that for the year past, from 2/12/07 to 2/12/08, the 25 companies in the index
outperformed the 100 companies in the S&P Global 100 by over 7% (7 percentage points) in price. This is a huge gain for innovation-driven companies over the normal constellation of global corporations.
The overall price gain for the S&P/BusinessWeek Global Innovation Index for the past year is plus 4.42% compared to the overall price loss of minus 3.18% for the S&P Global 100.
Now bare in mind this gain occurred despite Motorola blowing up (it's in the index because it ranked high in the 07 Most Innovative Companies survey and will probably drop out when the 08 rankings come out in April), and despite the fall of tech stocks in general.