Unmitigated positive effect on innovation

BUSINESS INSIGHT: Professor Christensen, tell us a little bit about what you think the effects of the financial crisis and economic downturn will be on the environment for innovation.

DR CHRISTENSEN: I think it will have an unmitigated positive effect on innovation.

BI: That's counter-intuitive.

Dr C: Well, it will force innovators to not waste nearly so much money.

One of the banes of successful innovation is that companies may be so committed to innovation that they will give the innovators a lot of money to spend.

Statistically, 93 per cent of all innovations that ultimately become successful started off in the wrong direction; the probability that you'll get it right the first time out of the gate is very low.

So, if you give people a lot of money, it gives them the privilege of pursuing the wrong strategy for a very long time. In an environment where you've got to push innovations out the door fast and keep the cost of innovation low, the probability that you'll be successful is actually much higher.

BI: In other words, what you're saying is that prosperity tends to insulate innovators from market realities and allows them to pursue their vision - a vision which is probably wrong, statistically speaking.

Dr C: That's a perfect summary of how I think the world works. The breakthrough innovations come when the tension is greatest and the resources are most limited. That's when people are actually a lot more open to rethinking the fundamental way they do business.