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Business The Economist April 25th 2020 55
Corporate innovation country’s covid shutdown; its sales more
than doubled in February to $6.4bn. One
Crucible of creative disruption foreign buyer recently paid £6m ($7.4m)
for a home in London after only a 3d virtual
tour. Matterport, a Californian firm, says
its 3d cameras are selling like loo rolls.
Besides being expensive, corporate in-
novation has also historically been insular.
NEW YORK This closed approach carries an opportuni-
The crisis is liberating firms to experiment with radical new ideas
ty cost, notes Henry Chesbrough of the
hen mount tambora erupted in typically involves oodles of capital. Right Haas School at the University of California,
WApril 1815 the dust and ash from the now, while companies preserve cash to Berkeley. Most large companies do not use
volcano in what is now Indonesia blotted stay liquid as revenues dry up, fresh invest- or license most of their patents, save their
out the sun and lowered global tempera- ments are the last thing on most bosses’ “crown jewels”. Some of these vaults are be-
tures, hurting harvests everywhere. As minds. Some are discovering ways to do ing opened up, and their contents shared
food prices soared, tens of thousands of things differently without huge outlays. with others.
people died from famine and disease. So The chief executive of a big European Usually prickly pharmaceutical rivals
did thousands of horses, because their food retailer explains how his firm man- are working arm in arm in the race to devel-
owners could no longer afford to feed them aged to increase online fulfilment by more op drugs and vaccines against the corona-
oats. It was against this dismal backdrop than 50%, with no new capital invest- virus. ibm is leading a consortium that will
that Karl von Drais, a German inventor, ments, thanks to all-night picking and pool supercomputing resources to help in
dreamed up the Laufmaschine to replace packing at stores. Evergrande, a big Chi- the search for therapies. On April 21st Mi-
equine locomotion. Today his “running nese property firm, encouraged its sales crosoft, once a staunch advocate of the
machine” is known as the bicycle. force to use social media and virtual-reality “walled garden” approach to software, de-
The pandemic is, like Tambora, an un- technology to promote homes during the clared its support for the open-data move-
mitigated calamity. But in some quarters it, ment (see subsequent article).
too, is spurring innovation, as firms come Also in this section Big companies have largely favoured
up with new ways to keep making existing 56 Facebook’s Jio strategy the advice of insiders and elite consultan-
products despite disrupted supply chains, cies over the wisdom of the crowds, notes
or, as demand collapses amid self-isola- 57 TV-serial numbers Karim Lakhani of Harvard Business School.
tion, create new ones. Some are changing 57 Microsoft opens up This, too, is changing. Ericsson, a Swedish
the very way they innovate. telecoms-equipment firm, is now invest-
The first thing about corporate innova- 58 Bartleby: Play’s the thing ing more in open-source software and en-
tion that the pandemic has changed is its gaging customers in open-innovation ef-
59 Schumpeter: The Netflix binge
cost. Doing anything novel at large firms forts to speed up the adoption of its 5g kit. 1
