• Innovation and Unintended Consequences

    Historian Edward Tenner wants us to take a positive view of unintended consequences. In a speech just made available by TedTalks , Tenner runs through all the remarkable innovation that came about somewhat accidentally. We've made a point here at The Watch to note all the successful companies that were born during economic downturns, and Tenner makes sure to highlight some of these examples as well. But this is a much longer view of important shifts in culture, development, and business.
  • Innovation Lessons from The Great Depression

    DuPont, Polaroid, RCA, Hewlett Packard. What do these companies have in common? 1) While they aren't all faring so well right now (RCA has been gone for over two decades now), they were all had extended periods of success in the middle-late Twentieth Century; and 2) They all used aggressive R&D strategies to innovate during the Great Depression and came out as highly influential comanies as a result. Harvard Business School's Tom Nicholas shares some instructive history from the 1930s in The McKinsey Quarterly . Overall, the 1930s were not a period of widespread innovation. As Nicholas points out, patents--a strong indicator of innovation--followed the volatile business cycle, lagging behind GDP by a year (following growth, patents were up; following contraction, patents were down). But some of those companies that bucked the trend saw significant long term benefits. Like DuPont: In April 1930, a noted DuPont research scientist, Wallace Carothers, recorded the initial discovery of neoprene (synthetic rubber). Although the company’s price levels and sales fell by roughly 10 and 15 percent, respectively, that year, DuPont boosted R&D spending to develop the new technology commercially. A buyer’s market for research scientists and low raw-material prices helped the company to keep the cost of its research investments manageable. Neoprene, which DuPont publicly announced in November 1931 and introduced commercially in 1937, became one of the 20th century’s major innovations. By 1939, every automobile and airplane manufactured in the United States had neoprene components. Similarly, DuPont discovered nylon in 1934 and introduced it in 1938 after intensive R&D and product development. Earlier this week we highlighted the Independent Street blog's prediction that this would be the "Year of the Entrepreneur." So what kind of opportunities for innovation are out there in 2009--for companies of all sizes? Who are the Duponts and Hewlett-Packard's of this economic crisis?