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The pandemic is liberating firms to experiment with radical new ideas

23 Apr 2020

WHEN MOUNT TAMBORA erupted in April 1815 the dust and ash from the volcano in what is now Indonesia blotted out the sun and lowered global temperatures, hurting harvests everywhere. As food prices soared, tens of thousands of people died from famine and disease. So did thousands of horses, because their owners could no longer afford to feed them oats. It was against this dismal backdrop that Karl von Drais, a German inventor, dreamed up the Laufmaschine to replace equine locomotion. Today his “running machine” is known as the bicycle.

The pandemic is, like Tambora, an unmitigated calamity. But in some quarters it, too, is spurring innovation, as firms come up with new ways to keep making existing products despite disrupted supply chains, or, as demand collapses amid self-isolation, create new ones. Some are changing the very way they innovate.

The first thing about corporate innovation that the pandemic has changed is its cost. Doing anything novel at large firms typically involves oodles of capital. Right now, while companies preserve cash to stay liquid as revenues dry up, fresh investments are the last thing on most bosses’ minds. Some are discovering ways to do things differently without huge outlays.

The chief executive of a big European food retailer explains how his firm managed to...

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This content was originally published by The Economist: Business. Original publishers retain all rights. It appears here for a limited time before automated archiving. By The Economist: Business

Covid-19 – Johns Hopkins University

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