Sunday, March 15, 2009

Necessity is the Mother of Invention

I wrote yesterday about a wonderful art exhibit at the Ackland Art Museum at the University of North Carolina in Chapel Hill. I quoted John Eckblad, the collector who provided the prints for the exhibition as saying:

Today, with our economy and environment under siege, it’s useful to remember that crisis begets invention. When we seem closest to capitulation, the seeds of our next reality have already been sown. And, we need not wonder for long how our new realities will look and feel. Once again, artists will be there to both document and interpret.

Saturday, there was an article in the New York Times about just this thing. The article by journalists Matt Richtel and Jenna Wortham described how the recession with its resulting layoffs was forcing a whole new way of entrepreneurial activity from younger people who couldn’t find work. The article quotes Mark V. Cannice, executive director of entrepreneurship programs at the University of South San Francisco as saying:

If there is a silver lining, the large-scale downsizing from major companies will release a lot of new entrepreneurial talent and ideas — scientists, engineers, business folks now looking to do other things,” Mr. Cannice said. “It’s a Darwinian unleashing of talent into the entrepreneurial ecosystem.

The technology enabler that is releasing a wave of entrepreneurial activity is the web. Whether people envision starting a new dot com business or whether they are using the web to market their physical products or locate suppliers, the internet is making low-cost innovation possible. It is tempting to think that this is somehow a unique feature of the technology of our time. But every new technology wave has had the same impact on releasing innovation. The railroads with their resultant lowering of transportation costs stimulated decades of new business. Montgomery Ward and Sears both developed in the late 19th Century as a means to cost-effectively provide retail goods to rural people. Both of these catalog businesses were located at the center of the U.S. rail hub in Chicago. They were literally the Amazons of their day, enabled by a technology network that made the business even possible.

It’s going to be interesting to see what emerges out of this new wave of “forced entrepreneurship” (Mark Cannice’s phrase). Lots of it will be local and hence not visible to most of us. Many of the startups will be short-lived. But they will have not only allowed their owners to survive, they will help the economy and will be the route for many to what amounts to a free MBA through the School of Hard Knocks. These entrepreneurs will acquire invaluable knowledge that will serve them all their lives. As Eckblad said, “The seed of our next reality have already been sown.”

No comments: