Times are tough. Layoffs are growing every day and despite massive government intervention, there is little talk of anything more than a slow prolonged recovery. There are a few reasons though to remain optimistic. The main one: as long as we have entrepreneurial people, jobs will be created, and when times get tough we learn to do more with less. There are many entrepreneurs out there who see new and better opportunities for innovation now we are in the midst of crisis.
Just last December, a new study confirmed that the relationship between company success and economic conditions at the time of a company’s founding is ill-understood. One of the statistical results suggests that the likelihood of a company being part of a public IPO is unrelated to whether it came from a recessionary or non-recessionary period.
Not even the worst economic crisis has stopped entrepreneurs: Allstate, Texas Instruments, U.S. News and World Report, Revlon, Knoll and more were founded during the Great Depression. And the trend has continued during other economic downturns. Not only do these companies hire workers and expand economic activity, but many of them introduce life-saving or productivity-enhancing innovations. Existing companies have also commercialized innovations during recessions instead of pulling back. For example, Procter & Gamble pushed to launch its Pampers disposable diapers during the economic dip of 1961. In 2001, Apple introduced the first iPod. There are always needs to fill in the market, and fortunately we have risk-taking entrepreneurs to pursue innovative ideas.
Every week, we will highlight one story of innovation and job creation in our “Profiles in Innovation” section under the Policy Forum tab. A recent survey revealed that Americans see entrepreneurship as having a key role in overcoming the current crisis: 80 percent of voters want to see the government use its resources to actively encourage entrepreneurship. We hope that the profiles will be powerful statements for policymakers, future entrepreneurs and society in general about the ways in which entrepreneurs drive the economy and improve living standards.