5 Ways To Innovate In A Recession.
The single most important thing happening in the innovation and design space is the recession. Inside companies, dealing with the impending recession is the conversation of the day. The latest statistics are increasingly gloomy and the only question is “how bad.” Innovation and design thinking can play significant roles in getting through this recession.
Here are five ideas to innovate in a recession:
1- Go Social. Companies are sure to cut back on ad spending as the economy slows (they always do) but blogs and social networking (FaceBook, YouTube,) in general can spread the message at less cost and perhaps even more effectively. And collaborative innovation using networks of engineers, scientists and other “creative” types around the world can cut costs and boost the chances of successful product development.
2- Go Medical. The market space that is most ripe for innovation and most likely to keep growing through a recession is medical care. Get into it if you are not already there. Look at these stats: In 07, medical care consumption accounted for a record 20% of disposable personal income. That’s up from 8% at the start of the 1970s. In current dollars, per capita spending on health care soared to a record high $6,797 (saar) in December. Hospital costs climbed to $2,210, while doctors’ bills hit $1,332 per person.
3- Go Anthro. Getting close to customers is always important but never more so than in an economic slowdown. Using design tools that get you deep into customer cultures (whether they are online or in Africa) cuts down the risk of launching new products and services. And it raises the possibilities of coming out with something really want in a recession. The IIT Institute of Design has sophisticated software to help companies do detailed anthropology inexpensively. Call Patrick Whitney and check it out.
4- Go Global. All the companies so far that have weathered the downturn to some degree has truly global operations. Being global means being plugged into all the markets of the world (India and China are still expanding rapidly as US economic growth stops). It means tapping into the lowest-cost talent and capital in the world. It means knowing the cheapest ways of innovating--because you are innovating for the Bottom of the Pyramid. And being global means having revenue denominated in currencies that are not dollars--and that are rising as the dollar falls. Dig deep into the good results of GE and other global corporations for the most recent quarter and it is this factor--doing business in other currencies--that is most imporant.
5--Go Cloud. Nothing works if you don't have the right IT platform. You can't go social, global, anthro, medical or anything else if you don't have the right technology. But if you do invest in the right kind of technology, the gains can be huge. Productivity growth has been incredibly strong in recent years (contributing to strong corporate profits even as the economy slows) because of smart spending on IT.
And we're not talking bureaucratic systems integration but cloud computing, agile, apps-focused IT. If corporations really want to save money in this recession, they might consider leaving the top-down, centralized, Microsoft-driven PC world of the office which is very costly and shift to the distributed, agile, Web 2.0 just-download-what-you-need IT world of Google.