Innovating is risky, but not doing it is lethal

The global economy has changed dramatically in recent years, as have the priorities of consumers. The prospects for many R&D&i projects have faded and it is increasingly likely, in many sectors, that the current recession will last longer than a full cycle of new product development. How CEOs and CIOs respond to these unforeseen changes will shape our future, both in the short and long term.

In previous economic crises, many innovative companies responded by rapidly cutting their R&D budgets, regardless of the long-term impact of this measure. They ignored changes in the customers' economy and their buying habits and continued to produce goods that no one valued. Many of those companies disappeared, and few remember them. However, history shows that the greatest innovations have occurred in times of economic stress. For example, Television and FM radio emerged in the Great Depression.

Two traits common to all innovative companies, both before and now, are the use of their strengths (they know them) in the face of adversity and the search for new opportunities that generate value and increase their income. These companies take advantage of the economic crisis to restructure their investments in R&D&i and adapt their innovations to the new realities of the market. They are betting heavily on new competitive technologies and at the same time cutting back unprofitable projects in nonviable markets.

With business as usual in the current crisis, it is very difficult to grow. If we look at the value of a stock on the stock market, this does not reflect its current value but rather its future value. Stock markets are built on expectations. What you are doing now is not enough for them, but what is truly important, and what investors value, is what you will do in the coming years. That is why Apple has reached its market capitalization. Steve Jobs created a company based on systematic innovation, and investors are always aware, not only of current sales, but also of their upcoming launches.

It must also be remembered that in extraordinarily tough times, innovation reveals itself as a decisive factor. War conflicts and the development of new technologies have been closely linked throughout history. For example, Aeronautics and Defense add a lot of value to the field of innovation. In wars or in the space race, cutting-edge technology is developed that is later adapted to mass consumption, such as Velcro, which was initially developed for astronauts and later has come to be used in mass consumption. Another example, also very close, is the GPS spatial positioning system. The system was originally conceived to guide troops, planes, and ships through the vast oceans and deserts. The system was opened up for everyday use through simple apps that worked with affordable devices and, lately, with our smartphones.

Nowadays, the challenge, at the level of societies and countries, is to respond in times of crisis to an unsolved problem, with the support of technology companies. In reality, it is not the government that innovates, but the companies, which provide answers to the problems they have in their own country both from the government itself and in the industrial sectors.

I am convinced that in these environments we can innovate without the need for 'wars', but not without thinking outside the box: getting to the moon, going around the world in a solar plane, connecting society by telepresence, calling from space. What new challenge do we set for ourselves?