Recession can stimulate innovation

The current recession has had a severe impact on businesses in all sectors. You might think that this means that new ideas and inventions are falling by the wayside as everyone focuses on their core activities.

However, even when times are tough, creativity doesn’t stop – in fact, probably the opposite. Look at some of the great companies that were founded during a time of recession – IBM, Apple and Microsoft are a few examples – and you quickly realise that hard times can stimulate innovation.

Frequently, difficult times force people to make choices. For example, someone may lose their job and decide that they’re finally going to develop the business idea they’ve always thought about, but never had time to get off the ground.

Based on my personal experience, particularly as a player in the early stage venture capital business, I think we will be able to look back at 2008-2009 as one of the halcyon periods for developments in early stage technology.

The idea is not enough

However, having the idea is not sufficient. Once you’ve made your prototype or done your first piece of clinical research, you need money or some other route to get your idea to market. The venture capital market is a source of funding, but another option is to turn to companies that are using the principles of open innovation, such as the Boots Centre for Innovation.

The Boots Centre for Innovation was set up as a not-for-profit organisation by the UK’s largest chain of retail chemists, Alliance Boots, with backing from the investment firm Longbow Capital and the University of Swansea, Wales, to look in the UK and then further afield, for great ideas that could be developed into pioneering products or services for Alliance Boots customers. These ideas may be at any stage, from concept to shelf-ready.

The Centre also searches for solutions to specific problems and for new technologies that can be adapted to address particular healthcare issues. It complements the established product development resources of Alliance Boots, and offers extensive commercial support, access to funding and the potential for distribution across Alliance Boots’ international network. Importantly, the creator retains his or her original intellectual property rights.

The culture shift to open innovation

The Boots Centre for Innovation is a unique embodiment of the ‘Open Innovation’ process that is being embraced by an increasing number of major companies around the world. The idea is that any company should actively encourage and cultivate creativity not just within its own four walls, but from outside as well. This involves a major cultural shift for many organisations.

Since the recession began, the number of people approaching us certainly hasn’t slowed down. Entrepreneurs turn to the Boots Centre for Innovation because it promises informed, experienced support and advice and offers, potentially, a privileged route to market through the Alliance Boots chain of shops. Funding is, for many, a secondary consideration, although absolutely critical for a minority.

Over the last two years we’ve brought a number of new products to market, ranging from a device to tackle female stress incontinence developed by a lone innovator, to a wound treatment initially created to treat racehorses before being developed into a consumer product.

Another product uses technology first developed at the University of Swansea to treat children with birthmarks. The scientists realised it could also suppress the growth of hair and set up a company to exploit it. After successfully supplying the professional market, they approached us with a prototype for home use. We worked together to research the market and optimise the technology for consumer use, resulting in a small, affordable hair reduction device that has been extremely successful.

I believe that good inventions will always win through, regardless of the economic climate. Open Innovation offers inventors an effective route to market in these difficult times and, when handled correctly, provides a win-win solution for both the innovator and the organisation sourcing ideas.