Even in a recession, business moves forward—sometimes by tiny increments, sometimes by leaps and bounds.
The little stuff showed up in the second quarter's productivity growth.
Though by no means guaranteed, GM's Chevy Volt could be an example of a larger technological change.
And Wall Street's not dead yet. It's shaking up the status quo—making room for a new round of financial innovation.
Innovation comes in many shapes and forms. Sometimes it's big and groundshaking—a tsunami—but mostly it's millions of seemingly insignificant, incremental droplets that make a puddle, then a pool, then a lake, then a sea change. And it's going on all the time, even when we think it couldn't possibly—like during an economic downturn.
Want to see small stuff? Just look to Tuesday's announcement second quarter productivity surged. Firms are successfully lowering labor costs and it isn't about gadget innovation. It's about streamlining processes by asking a million little questions like, "Shouldn't we be using both sides of the paper to print memos? Or better yet, go digital altogether?" (Granted, pretty much everyone but the feds figured this out years ago, but you get the picture.) In the near term, these little daily innovations mean firms can turn profitable, even without a big economic recovery. And when things improve? They're in an even stronger position to make bigger profits.
Technological innovation can continue during downturns too. Its success is no guarantee, but GM's Chevy Volt is an example of innovative hybrid technology rushed through production to catch up with competitors in what is likely to be a growing market. Even though traditional energy source demand will remain strong for years to come, solutions to tomorrow's problems often pop up long before they're needed—even in "great recessions." (Mind you, the government may yet kill US automakers, but still, if there's a glimmer of hope for profits—folks will try for it.)
And Wall Street's not dead yet. The feds have been whacking the big guys, but that's created an opportunity for others to fill their shoes—today's "B" list firms could be tomorrow's "A" listers. And finding opportunities when things get challenging is nothing new for Financials. Merrill Lynch piloted retail investing in the ‘40s—not exactly a great time to be in the securities business. But the idea was game-changing in the decades to come, eventually morphing into today's massive retail business.
We've been through a difficult time no doubt—a recession and huge dose of government intervention. But difficulties often create opportunities if firms can find a way to innovate. And they almost always do—large or small, in sickness or in health.