Home Uncategorized Innovation has nothing to do with downturns. Just ask Eric Schmidt.

    Innovation has nothing to do with downturns. Just ask Eric Schmidt.


    You may have noticed that every second Thursday, over the last few months, I have posted a blog on a topic that explores entrepreneurship. I hope that these aren’t coming too frequently (if they are, I’m sure you’ll let me know).

    Over this same period of time, there is one topic that has dominated the media.

    You know what it is. I’m talking about the big ‘D’.


    Not Depression.

    The big ‘D’ I’m talking about stands for…


    In a recent interview with BusinessWeek, Google CEO Eric Schmidt was asked whether Google’s strategy would change as the US economy heads into a likely recession.

    He replied, “What recession?”

    And then went on to say…

    Innovation has nothing to do with downturns. A hot product will sell just as well in a recession as it will in a non-recession. Let’s imagine that we invented a better advertising product for television.

    What would our revenue growth be for that? Well, you’re into a $50 billion market, so it will be driven not by whether there’s a television ad recession but by what degree we can get people to substitute [our product] for the other.

    The strong companies understand this, and during a recession, they invest.

    Or take a moment to reflect on the words of Bill Gates:

    Even though we’re in an economic downturn, we’re in an innovation upturn.

    I’ve been watching the general behaviour and attitude of our readers pretty closely for the last six months, and I get the impression that they (I mean, you) tend to agree.

    If you have a hot idea, the economy is unlikely to deter you.

    If you’re a young venture, you just might need to bootstrap a little harder (like all quality startups, including Google and Microsoft in their early days). If you’re a more established venture, you’d be mad to not start working on your next big thing now (because innovation takes time and you want to be ready for the next upturn).

    A venture associated with Anthill, called (re)innovate challenge, is inviting Australian organisations to form teams and undergo six months of training.

    The goal for each team is to develop ideas worthy of spin-off, from wild new products to processes and operational efficiencies.

    The program costs $1,650 per team and has already attracted 220 registrations of interest! This one example demonstrates that 220 companies already understand the value of innovation, irrespective of the economic climate.

    (BTW – If you’re the CEO or HR manager, get your company behind this initiative. It’s a program designed to make innovation accessible to as many businesses as possible. The goal is to make innovation just a natural part of the employee development mix and make Australia’s innovation capacity absolutely explode! Click here.)

    But I digress.

    It seems to this not-so-humble commentator that the most harmful effect of this economic downturn on the state of the Australian economy, so far, appears to not be its impact on our hip pockets but on our hearts and minds.

    So, if you are feeling stressed (spitting out beads of sweat, rather than gems of wisdom) just remember that many of the world’s most successful companies hit their stride at the height of recession. Just ask Eric, Bill or even Kellogs!

    Them’s my two cents for the fortnight (otherwise known as my dwindling share portfolio). 😉