Economic Crises Known to Spawn Innovation

“Good times are good. Bad times are even better,” said Panasonic founder Konosuke Matsushita.

He believed an economic crisis is a golden opportunity to develop new products and technologies.

Given previous times of economic turmoil, the slogan “A crisis is the mother of invention” is a perfect description. Japan’s leading business daily Nihon Keizai Shimbun said in its New Year edition that an epoch-making technological advancement has been made in every economic downturn, as seen in the 1907 stock market crash, or the "Panic of 1907," when the Ford model of mass production and consumption was introduced afterwards.

After the end of World War II, the University of Pennsylvania invented ENIAC, an electronic numerical integrator and computer. During the second oil shock of 1979, Sony unveiled the Walkman.

Right after the Asian financial crisis of the late 1990s, Google, the world’s biggest Internet search engine, was created. In 2001, after the IT bubble burst, Apple`s portable digital player iPod appeared, raising the level of technology a notch higher.

Dramatic technological advancement usually follows an economic crisis because of the golden opportunity to newcomers given that old values are destroyed and entry barriers and the risk of failure are lowered.

“Though 2009 faces the worst economic crisis in a century, a new technology or product that changes the world could emerge this year as well,” the paper said.

Toyota Motor is developing an electronic car powered by an attached solar cell battery. The company’s ultimate goal is reportedly developing vehicles powered by solar energy that can be recharged at home via solar panels.