I read in the previous Sunday edition of the NY Times an opinion piece called It's No Time To Forget About Innovation.
Author Janet Rae-Dupree uses material from the following two books to further her advice not to completely stifle innovation during these economic hard times; Closing the Innovation Gap by Judy Estrin and Strategic Entrepreneurism by Jon Fisher.
According to Janet, Judy posits that the following core values need to be in equal balance in order to foster innovation; questioning, risk taking, openness, patience, and trust. You may have heard of this as failing fast, From the Outside In, and the long tail. She also advocates "green thumb leadership" where gardens of new ideas are permitted amidst the factory farms.
Contrast this with Jon's position that innovation must be embedded in the daily operation of the rank and file. Entrepreneurs should plan their start in a highly creative and innovative environment then sell the business to a larger, more established company in order to scale up.
I think that what most of these people are trying to say is that innovation, by and of itself, is not optimized for making money; however, innovation can open the door to profitable markets in the future. It would seem to me that the best time to focus on not making money is when there is not that much money available to be made. So, the best time to innovate is during a global recession. It's not like your competitors are going to raise their market capitalization by improving their profitability while you fritter away in the lab.
Of course, I'm not saying that you should throw huge amounts of money at it. Innovators work best when they are hungry. That's another reason why this is a good time to innovate. Think Guy Kawasaki's boot strapping.
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