Persistent innovators and how to act now (ref. Covid-19)

Persistent innovators and how to act now

In this post we cover:

What is in common among persistent innovators during and after the 2008 crisis?

Persistent innovators are companies (and countries such as S. Korea and China) that continue innovating despite a crisis. They were not in majority during and after the 2008 crisis, but there were companies who sustained to innovate.

Filippetti & Archibugi (2011) have found that three important components helped to offset the effects of the crisis: the good national institutional structures for innovation, robust financial systems and highly skilled and qualified human resources. Those companies and countries that have accumulated larger “stocks” of knowledge showed greater persistency in innovation (Filippetti & Archibugi, 2011).

A study by Archibugi, Filippetti & Frenz (2013) has confirmed that companies in crisis reduce innovation. The study has also clarified for some positive aspects: companies that have launched more products and services “new to the market” have continued and strengthened their innovation activity during the crisis. This is true for both small and larger companies in this category. Not only did they continue, but they also increased their innovation efforts through being more focused and more concentrated (innovation on fewer project, but with greater budget). This implies that fewer firms were responsible for an increased share of innovation expenditure (Archibugi, Filippetti, & Frenz, 2013).

Firms that are more robust to the innovation in crisis times are organizations that have been continuously working on consolidating their technological capabilities in line with the technological trajectories. This is called creative accumulation.  These firms are usually large corporations, but also some small fast-growing companies. (Archibugi, Filippetti, & Frenz, 2013) These companies have established R&D departments and strategies in place that they continue to follow during the downturn periods.  They continue to focus on exploring new markets and offerings. Examples of large companies can be long term innovators like P&G or IBM. Examples of small companies could be IT, software, and biotech companies.

In short

Persistent innovators increase their innovation in crisis times. They build their capabilities on:

  • Delivering more “new to the market” offerings before and during crisis times
  • Strong human capital
  • Continuously growing their creative accumulation

Crisis effects are lowered if a country has:

  • Good national institutional structures for innovation,
  • Robust financial systems and
  • Highly skilled human



How will the Covid-19 crisis affect innovation?

Many industries have experienced an immediate fall in revenues.

The lack of cash inflows has made them unable to create and innovate. Even worse, their existence is at risk, with low-cost carriers like Norwegian or Germanwings being good examples of this. Many have reached out for governmental and investor help. Securing the help for these diminishes the resources for other maybe more viable innovation investments. Due to the high uncertainty, demand for product and services in other sectors may be also be largely on hold. Also, financial investors are likely to become more reluctant to invest as they may want to wait to see how the situation will develop.

Governments focusing on R&D incentives

On the other hand, governments will be focusing on creating incentives for research and businesses that will help in combating coronavirus. The EU has announced a call for financing research targeted at coronavirus and is eliminating certain taxes on the import of medical devices and equipment from countries outside of the EU and EEA.

This will foster innovation and business opportunities. Telemedicine is increasing. Adoption of virtual care is growing. A company in the USA is offering its transplant patient to self-monitor their conditions with a home-based blood draw technology that enables them to avoid hospital and lab visits.

More robust and innovative economies are better off

Governments with more robust financial situations like for example Norway will have more bandwidth to ignite business activity by providing different R&D financing incentives. Innovation and R&D programs are focusing on sustainability, climate change and as a consequence technologic trajectory will have positive effects on the economy and further boost creative accumulation. This, coupled with a highly skilled labor force, will help economies to recover faster.

Technological frontiers will lead innovation

Technological frontiers like AI, machine learning, blockchain will continue to create and innovate opportunities. IT, digital media, entertainment, and education will probably suffer little but readjust quickly. The “isolation” economy creates a strong demand for online content and services as new adopters of digital solutions will increase; they’ll push the demand further up.  “Forced” online education could make customers, that are usually resistant to digital learning, more curious and more acceptable of the new technology. This could make them learn new skills hence more adaptable to the conditions on the labor market.  Such effects would help activating the displaced workforce. Low skilled workforce laid off from the tourist industry may find new job opportunities in the highly pressured health sector.



How to innovate now?


One should start with assessing the impact the Covid-19 had on their business, how did it impact your offering, how did it change your customers’ behaviors and your value chain. The next step is to draw new opportunities. Based on your assessments, draft for new offerings and approaches including these outside your core business.  How can you redefine your offering?  We should then evaluate and prioritize the listed solutions. We assess new solutions in terms of customer needs, satisfaction levels, time to market delivery, novelty on the market. Next is to define the roadmap to launch the idea, product or service; strategizing market moves, evaluating cooperation and partnership opportunities, publicly available funding, changes in the value chain situation. It is important thus to plan that changes and unknown circumstances can arise as we deploy the new product or service. Decide on a start, monitor progress, and update your plan according to the circumstances.

Crisis led innovation

There are always crisis led innovations, but there are not many of them. These (countries and companies) that continued to innovate in crisis were strong innovators prior to crisis, they are fewer in number, and they have actually increased innovation in crisis. Strong innovation capabilities enabled them to suffer less from negative effects of crisis.

Strong innovators continue to innovate in crisis

In generally, the total amount of innovation initiatives decreases in crisis and crisis does not result in abundancy of creativity and innovation. Crisis makes innovation efforts harder for majority. Hence, we would say that crisis led innovations do not have a power to immediately and quickly correct all negative effects of a crisis. Cushioning the effects of crisis through innovating is a long term strategically focused activity led both by governments and by companies itself.

The covid-19 crisis is so disruptive, it immediately stopped economies and made consumers change their behaviors and habits. The customers will create a collective memory and will make it easier in future to accept changes.

Touchless environment

The Covid-19 crisis has created a touchless environment. Companies must adjust fast in order to soften the negative impacts of the situation. Innovation is hence crucial in order to define spaces of opportunities and how to exploit them.

Innovation is the solution

In order to survive, the majority of companies must reconsider their past business models and find a new one suitable for the isolation and post COVID-19 society. They must innovate immediately in order to survive.



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The feedback is always appreciated.

The author of the text is Barbara Salopek, CEO of Vinco Innovation and a lecturer at BI Norwegian Business School. You can get in touch with her at



Archibugi, D., Filippetti, A., & Frenz, M. (2013, March). Economic crisis and innovation: Is destruction prevailing over accumulation? Research Policy, 303-314.

Filippetti, A., & Archibugi, D. (2011). Innovation in times of crisis: National Systems of Innovation, structure and demand. Resserach policy, 179-192.

OECD. (2012). OECD Science, Technology and Industry Outlook 2012, Chapter: Innovation in the crisis and beyond. OECD.


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