The economic situation resulting from two years of the pandemic was aggravated by a war in European territory and the consequent energy and inflationary crisis. Despite the expected recession and decline in world GDP, 2022 ended with several economies showing resilience, including the Portuguese one. The national Gross Domestic Product grew by 6.7%, the highest since 1987 and, in 2023, the Bank of Portugal predicts that this trend will continue. Innovation has been identified as one of the main levers for this result.
In my opinion, the real engines of economic activity are progress and innovation. According to Peter Drucker, business has only two functions: Marketing and innovation. In either case, innovating is the common denominator. Crises are always good stimuli to think differently and innovate. I often say that necessity is the mother of creativity. However, there are innovation processes and dynamics that must be worked on in good times. As with everything else, innovation must be coherent and consistent.
Innovating in the midst of a crisis is good. It will certainly better prepare the company for future crises and help it maintain or gain market leadership, but it will hardly have short-term effects. Organizations must constantly invest in innovation in order to become differentiating, resilient, more competitive and thus be better prepared to face more difficult periods or be pioneers.
It should be noted that companies have a very short average lifetime, not because businesses end, but because they transform. The world evolves faster and faster and if we don't transform ourselves, if we don't innovate, someone will appear who does better or with more value what we do.
There are already several large companies that were on the crest of the wave and fell because they did not keep up with the dynamics of the market. See the example of Nokia. In 2007, it was the world leader in smartphones, while Apple's market share was non-existent. The innovations that the iPhone brought, such as the touch screen, simpler graphical interfaces and, later, the App Store, started a radical transformation in the smartphone universe, taking Apple to the lead.
The same happened with Blockbuster, a chain of physical movie rental stores, with a worldwide presence and a prominent market leader for years, but which was overtaken by newcomer Netflix, rising from a turnover of 6 billion dollars in 2004 , for the closure of doors in 2010.
Not innovating, underestimating the innovations of (new) competitors or reacting late and slowly can take any company from glory to decay in a few months. Innovation is, therefore, essential, not in times of crisis, but for the company to perpetuate itself, resist crises, anticipate or even lead market trends.
Thinking that others will come and be better than us is, in itself, a great incentive to innovate. If we don't want to be left behind in this race, this should encourage us to constantly look for new paths, other ways of doing things differently. If we don't innovate, what we do will wear out and/or lose value.
Innovation is not only important in times of crisis. Innovation is essential for the survival of any business, at any time.
CEO of dstelecom
Source: Dinheiro Vivo