Earlier this morning I came across this interview on The Wall Street Journal between Clay Christensen, previous FEI keynoter, and MIT Sloan Management Review senior editor Martha E. Mangelsdorf for Business Insight discussing the environment for innovation during the financial crisis and economic downturn.
According to Clay, the economic downturn will have a positive effect on the environment for innovation. Here's his reasoning behind it:
One of the banes of successful innovation is that companies may be so committed to innovation that they will give the innovators a lot of money to spend. And, statistically, 93% of all innovations that ultimately become successful started off in the wrong direction; the probability that you'll get it right the first time out of the gate is very low.
So, if you give people a lot of money, it gives them the privilege of pursuing the wrong strategy for a very long time. In an environment where you've got to push innovations out the door fast and keep the cost of innovation low, the probability that you'll be successful is actually much higher.
Clay also predicts that we will see more innovation from private companies and that the current economic crisis will force a real solution to the health-care problem. Read the entire interview here.