With the current economic state in dire straits, companies are searching for ways to cut back and lower expectations for revenue. Forbes' recently ran an article predicting that many companies will be cutting back on innovation.
Sectors that usually drive innovation -- start-ups, small companies and research divisions of large companies -- will see little funding and consumer interest with the declining market, Forbes said.
The need for efficient revenue streams is understandable, but cutting innovation is the wrong way to go about realigning priorities. Innovation is the only way for companies to move forward. Cutting innovation projects is undoubtedly a step in the wrong direction.
James Todhunter of PC World said it best in his latest editorial:
"The leading companies of tomorrow are the ones that are mastering innovation today."
-Matt M.
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I, too, have been wondering how entrepreneurial tech ventures are prepared (or not) to weather the financial storm. It's a clear example of how "innovation" should apply to every stage of business -- from concept to manufacturing and marketing and, of course, project funding.
Having left the Silicon Valley just before its speculative bust earlier in the decade, I was witness to how boom-time venture-capital funding was as reckless as gambling blindfolded at the poker table. Pyramid schemes and the like abounded. Throwing millions at the most nonsensical business ideas, without any thought as to their viability in the marketplace, was the norm.
Yet, despite the inevitable implosion that followed, entrepreneurial capital in the Silicon Valley was revived, and certainly the flow of tech ideas didn't stop. Which is why I'm very curious how Silicon Valley companies and investors are now approaching their entire business outlook differently and, I should think, more prudently.
What kind of innovations in revenue structure have most successfully or reliably manifest since the implosion? I.e., apart from equally viable products or services being developed, which companies -- by size -- have a better chance of surviving the financial fallout than others, and why?
- Misako M.
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