What happens to innovations in a crisis? (Lothar Stadler, August 2020)
How entrepreneurial innovation programs count during times of adversity – a European perspective.
T
he Covid-19 pandemic is making its mark throughout the world, serious economic consequences can hardly be es mated, companies introduced short-time working and many draw comparisons with the period of reconstruction work after the Second World War. Nevertheless, op mism is also no ceable, and it is o en said that every crisis also offers opportuni es. But does this also apply to innova ons?
1) What impact does a crisis have on innova ons? Crises generally have a negative effect on economic development. Let us take the financial crisis of 2008/2009 as an example for comparison. With the beginning of the financial crisis in 2008, many countries and companies around the world faced financial challenges (Dona ello & Ramella, 2017). Although countries
reacted with investment incen ves in a first step, many companies were forced to follow suit with cost cu ng and restructuring. Globally, the economic output (GDP) of the most important economic na ons, comprising 37 OECD countries, fell by just under 2% between 2008 and 2009. In Europe (EU28) a decline of 2.1% was recorded. In 2010, the values of 2008 had already been caught up again, in Europe they even were 1.45% higher than in 2008. But what are the implications of drawing a parallel with innova on? Expenditure on research and development can be used as indicators of innova ve strength and technological progress. Figure 1 shows the impact of the financial crisis in 2008/09 on global R&D. Star ng from 2008, 1,093 billion USD were spent on research and development worldwide. In 2009, this was reduced to 1,079 billion USD, a
decrease of 1.13%. In 2010, global R&D spending was already back at the previous level of 2008. In the US and Europe, R&D spending remained virtually unchanged during the crisis. Compared to the decline in global economic output, R&D spending therefore declined only slightly during the financial crisis. The ques on therefore arises as to whether crises are really a strong barrier to innovaon, or perhaps even an accelerator of it. We therefore look at a second comparison parameter: patent applica ons. Patent applica ons are an indicator of the degree of innova on. It is therefore necessary to analyse how the financial crisis of 2008/09 specifically affected the development of patent applica ons at the European Patent Office. In Figure 2 we see the steady development of European patent applications from the 28 EU home countries of inventors. Over the last 15 years, patent applica ons from all EU28 na ons averaged 65,000 per year. It is par cularly interes ng to see how visibly the financial crisis of 2008/09 had an impact on patent applica ons. europeanbusinessmagazine.com 65
