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Strip away talk about the U.S. dollar, the credit crunch and global leaders turning against each other, and one theme has emerged in conversations at Davos: new ideas for growth. Everyone has accepted that 2009 will be a lousy year for business, and 2010 may well be a write-off, too. But the optimists point out that the crisis is also likely to spur innovation and new opportunities for growth.
Paul Laudicina, chairman and managing partner of A.T. Kearney argues that “we’ve gone from irrational exuberance to exuberant anxiety.” He believes the industrialized world—yes, the industrialized world—is poised to unlock extraordinary developments in the near future. He points to the intersection of nanotech, biotech and cloud computing as being among the factors that could spur rapid productivity growth and make it easier for more players to innovate at a low cost.
Among the most heavily attended sessions at the World Economic Forum: the digital experience, educating the next wave of entrepreneurs, innovation in Asia, Chinese business, and a panel on the “silver lining to the financial cloud.”
Why focus on innovation when there are more immediate concerns? “You have no other choice,” argues William Kelly, CEO of Berkshire Hathaway-owned Netjets Europe. The key is to have someone take ownership of the push. “You need one person living and breathing change. A team won’t deliver it. You need to figure out your biggest problem and get the smartest guy to focus on it.”
One challenge is motivating people to be creative when business is in a slump. Best Buy CEO Brad Anderson recently announced layoffs and is dealing with softer retail sales. But he argues that frequent communication and more efforts to empower staff can help keep people engaged. “I used to work on the (store) floor,” says Anderson. “I know that person is closer to the customer than I am.”
Especially in this market, many argued, leaders have to stay flexible. “We used to have a planning department and none of the plans ever came true,” says Cristóbal Conde, chairman and CEO of Chile’s Sungard. “So I disbanded it. Now, everyone is responsible for their own planning.”
And while were envious of entrepreneurs like Facebook’s Mark Zuckerberg—“We grew in the last year from 50 million people to 150 million,” he says, “and we now have more than 400,000 developers around the world developing applications for Facebook.”—the reality is that most innovation continues to come from well-established players.
Bain & Co. partner Darrell Rigby told one audience that, when he looked back on ten years of hot new products featured in BusinessWeek, he found that 75% of them came from companies that had more than $1 billion in annual sales. The idea that smaller players are more innovative simply isn’t true and, he points out, “you do not have to be the inventor to be the most effective innovator.” Wal-Mart, he says, “is not the slightest bit hip but it’s using technology in very interesting ways.”
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