Shocks to the financial system create opportunities for small businesses and entrepreneurs. The US Depression – era economist Joseph Schumpeter summarized the phenomenon with his concept of creative destruction – a process through which innovation is catalyzed by crisis. For entrepreneurs and businesses with intellectual capital, history shows that downturns can provide enormous strategic opportunities – just consider the following time line of recession – era inventions:
· 1929-1939 – television, nylon, neoprene, photocopies, and the electric razor.
· 1973-1975 – Japanese auto industry, and personal computers.
· 1990-1991 – the internet economy.
· 2001-2003 – the iPod.
· 2007-present – green energy, telecom computing, convergence, and nanotech.
If there is one universal truth in business, it is that companies that continually invest in innovation are in a better position to ride out economic storms and come out the other end stronger. We are experiencing yet another point in history when investment in innovation and intellectual property is the ultimate competitive advantage. IP is about agility, and the ability to capitalize on the opportunities the recession will create.
Source: Intellectual Asset Management July/August 2009