I am a firm believer in the power of innovation and have been waiting for something to wow us out this economic recession. Unfortunately, I came to a pretty sad realization today and am afraid that we are stuck in a viscous cycle that may not end anytime soon. Now that you are either scared or think I am a lunatic, here is why.
Small businesses no longer have the capital to innovate and are too busy figuring out how to survive. They are cutting expenses daily and trying to operate with less in the bank. Although banks are “turning profits”(I put that in quotes because I don’t believe them), there aren’t many new loans being given. Honestly, small businesses aren’t even looking for the money because who knows when they’ll be able to pay it back.
Large corporate businesses aren’t innovating either. They are looking at this economy as a time to squash the competition and gain a larger portion of the market share. From a business point of view, if I were the CEO, that is exactly what I would do. It makes sense to spend money to beat the competition while they are hurting, this way when things turn around revenue will increase exponentially.
From a consumer’s point of view and the idealist in me, I want large corporations to spend money on research and development. If one new sensational product came out this year from a proven corporation, spirits could be lifted and new cash would be infused into the economy. This would start a chain reaction and help lift the global economy.
Am I asking too much?