The world economy And the political turmoil of the past year has had a significant impact on corporate innovation in the technology industry and beyond.
The global war against Covid, the Ukraine-Russia conflict and the economic collapse of the COVID lockdowns and supply chain disruptions have combined to create a painful global recession, global inflation and unprecedented instability in the global economy.
All of these factors have led to belt-tightening, layoffs and hiring in the corporate world, and a more conservative investment stance from the investment community. These changes will inevitably have a chilling effect on innovation in the coming years.
However, there is perhaps a silver lining when it comes to creative prospects. In some ways, these market forces can act as catalysts for innovation and technological progress.
In this climate, it may be easier to buy and integrate than to try to build from scratch.
Short term effects
In the short term, the impact of these negative economic trends and political instability will be felt in the corporate and innovation centers of the startup world.
Corporations reduce the cost of internal and external innovation. That means they reduce their research and development budgets and focus R&D on long-term vision projects that can generate immediate profitability.
Corporations spend less on collaborations with other innovators and on advanced technology acquisitions. We expect to see more acquisitions as early-stage companies falter and corporations seek to develop new technologies more cheaply by buying at a discount rather than building from scratch.
