When a financial crisis hits, small business dreams, retirement goals and countless other mainstays of the American economy can be dashed overnight. But for inventors and entrepreneurs looking to create the next big product, hard times hold both challenges and opportunities.
Inventors tend to keep patenting new ideas through economic crises, though they may not get to be the next Jeff Bezos or Mark Zuckerberg, according to from CU 羞羞视频鈥檚 Leeds School of Business, Columbia Business School and Northwestern University鈥檚 Kellogg School of Management.
鈥淭he ideas themselves find a way forward,鈥� said study co-author Asaf Bernstein, an assistant professor of finance at Leeds. 鈥淏ut we see more inventions inside of firms and big companies.鈥�
The working paper looks at historical patent filings across the U.S. It finds the nation鈥檚 invention productivity can weather financial downturns surprisingly well.听
Asaf Bernstein, assistant professor of finance at the Leeds School of Business听(CU 羞羞视频).
鈥淲hen there is a disruption, it鈥檚 relatively short-lived,鈥� Bernstein said.听
The study found that patents fell dramatically in response to the 1918 influenza pandemic but bounced back the following year. Areas harder hit by the Great Depression earned a similar number of future patent citations as areas with less severe financial woes.
The mechanism of that resilience, however, could be a downside for those looking to strike it rich on a big idea. Inventors tended to move into big, established companies in response to events like the Great Depression and the 1918 flu.听
The impacts could also be somewhat permanent, as the researchers found that these crises changed the innovation landscape for as long as 80 years.
What happens now?
Academics like Bernstein often avoid trying to predict the future.
鈥淚t鈥檚 always tricky,鈥� Bernstein said. 鈥淏ut now we鈥檙e looking at an unprecedented crisis.鈥�
The paper鈥檚 findings hold some lessons for the COVID-19 economic meltdown.
For people with big ideas, the research could represent a light in the dark.
鈥淚nnovators and entrepreneurs might fear that if they move into firms that would be the end of their ability to innovate,鈥� said Bernstein. 鈥淲hat we find is that working for a big company is not a death knell for your ideas.鈥�
For larger companies, this could be a time to think about hiring, instead of downsizing.
鈥淟arger businesses could have an opportunity to get good, smart talent who may otherwise work on their own,鈥� Bernstein said.
For technology enthusiasts bemoaning that the 2020s might be a lost decade of cool new gadgets, Bernstein offers something for them, too.
鈥淏ig ideas seem to find their way.鈥�
