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5 Ways To Innovate In A Recession.

Posted by: Bruce Nussbaum on February 13, 2008

The single most important thing happening in the innovation and design space is the recession. Inside companies, dealing with the impending recession is the conversation of the day. The latest statistics are increasingly gloomy and the only question is “how bad.”
Innovation and design thinking can play significant roles in getting through this recession.

Here are five ideas to innovate in a recession:

1- Go Social. Companies are sure to cut back on ad spending as the economy slows (they always do) but blogs and social networking (FaceBook, YouTube,) in general can spread the message at less cost and perhaps even more effectively. And collaborative innovation using networks of engineers, scientists and other “creative” types around the world can cut costs and boost the chances of successful product development.

2- Go Medical. The market space that is most ripe for innovation and most likely to keep growing through a recession is medical care. Get into it if you are not already there. Look at these stats: In 07, medical care consumption accounted for a record 20% of disposable personal income. That’s up from 8% at the start of the 1970s. In current dollars, per capita spending on health care soared to a record high $6,797 (saar) in December. Hospital costs climbed to $2,210, while doctors’ bills hit $1,332 per person.

3- Go Anthro. Getting close to customers is always important but never more so than in an economic slowdown. Using design tools that get you deep into customer cultures (whether they are online or in Africa) cuts down the risk of launching new products and services. And it raises the possibilities of coming out with something really want in a recession. The IIT Institute of Design has sophisticated software to help companies do detailed anthropology inexpensively. Call Patrick Whitney and check it out.

4- Go Global. All the companies so far that have weathered the downturn to some degree has truly global operations. Being global means being plugged into all the markets of the world (India and China are still expanding rapidly as US economic growth stops). It means tapping into the lowest-cost talent and capital in the world. It means knowing the cheapest ways of innovating--because you are innovating for the Bottom of the Pyramid. And being global means having revenue denominated in currencies that are not dollars--and that are rising as the dollar falls. Dig deep into the good results of GE and other global corporations for the most recent quarter and it is this factor--doing business in other currencies--that is most imporant.

5--Go Cloud. Nothing works if you don't have the right IT platform. You can't go social, global, anthro, medical or anything else if you don't have the right technology. But if you do invest in the right kind of technology, the gains can be huge. Productivity growth has been incredibly strong in recent years (contributing to strong corporate profits even as the economy slows) because of smart spending on IT.

And we're not talking bureaucratic systems integration but cloud computing, agile, apps-focused IT. If corporations really want to save money in this recession, they might consider leaving the top-down, centralized, Microsoft-driven PC world of the office which is very costly and shift to the distributed, agile, Web 2.0 just-download-what-you-need IT world of Google.

Reader Comments

Bruce Temkin

February 14, 2008 3:21 AM

These five areas make a lot of sense. I've also bligged about five disruptive strategies: Ultrasimplicity, online infusion, service infusion, service amplification, and value repositioning. The first two are particularly relevant in a down economy.

Here's a link to the post:

Mike Barlow

February 15, 2008 4:27 PM

You're spot on about medical. Of course, the skyrocketing cost of health care is the elephant in the room whenever the subject of health insurance arises -- which it does often. Like it or not, the two are inextricably linked. The cost of health care insurance won't become manageable until the cost of health care itself becomes manageable. The key is information technology. When the health care industry gets really serious about adopting an industry-wide IT standard, then you'll see efficiency rising and costs dropping -- we hope!

Siamak S.

February 15, 2008 8:25 PM

Perhaps there is a sixth item worth considering. Go hybrid! Hybrid model may offer a practical solution to continuing innovation at a tamer cost. The hybrid model has worked for us as a service provider. We at sormé design, Inc. have been providing product design services based on hybrid model with a noticeable degree of success. Using hybrid model empowered us to offer the best of both in-sourcing and offshoring benefits combined.
Most of our clients have been burned during the past five to seven years by virtual off-shoring service providers with at best only a local sales office. The lack of local technical presence, accountability and communication have caused a lot of heartache for those who rushed into capturing perceived values of offshoring. What delights our clients is our frontend. We offer a local presence of seasoned practitioners combined with the backend of select offshore talents. The average cost stays very competitive yet the quality of work is not compromised.

Sanjana Hattotuwa

April 14, 2008 5:17 AM

Thanks for the link to my blog. The specific post on Cloud Computing you allude to is here -

Best regards,


Sean Daw

November 25, 2008 10:34 PM

The other way to think about this is to get into the critical path of peoples lives; away from the 'want' category and into the 'need' category. Medical definitely fits that criteria, I would also add communication, 'critical' consumable goods (food fuel tires etc), and other so called 'emergency' areas.
Should designers be working toward innovating wants into needs? hmmm

Henry Albrecht

January 30, 2009 2:09 AM

great list, i hope to link back in a few days when my "innovator-haters in healthcare" post is ready! i will post it to (which hits on all but the global one). peace!

Emmaline Gristede

April 21, 2011 4:35 AM

Hello this is amazing site! really cool and it will be a new inspirations for me

Ernest Nelsen

May 7, 2011 8:12 AM

Pretty good post. I just stumbled upon your blog and wanted to say that I have really enjoyed reading your blog posts. Anyway I'll be subscribing to your feed and I hope you post again soon.

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Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

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