Keep innovating in the downturn -

Keep innovating in the downturn


We've all been hit hard by the current economic situation. Downsizing, cut backs, layoffs and more are happening everywhere in the engineering community. And yet we're all being asked to “do more with less.” Is this even possible? If we have fewer resources at our disposal, it would seem that not as many tasks could be accomplished. Can substantial innovation really happen in economic times such as these? As engineers, we're being asked to complete our next projects and designs with fewer resources and people, and continue to meet deadlines. If we're having difficulties meeting deadlines, how can we continue to innovate? Is it even possible to innovate today? I believe it is possible, but it's definitely not easy.

Throughout history, lots of important and crucial innovation has happened during economic hard times and recession. Let's take a look back at the greatest recession of all time–the Great Depression. Two major engineering inventions came out of those very bleak times, Scotch Tape and the fluorescent light bulb. Hewlett Packard was also founded during the Great Depression. It's important in times like these not to panic and pull back too much on research and development of new technologies and products. The best way to survive a downturn, if you have the available resources in place, is to prepare for the inevitable rebound by investing in change. Here are four tips for engineering and technology companies on how to innovate with less during tough economic times.

1. Avoid the urge to pull back on research
Research and development (R&D) and other innovation-related parts of the business are always easy places to look to when searching for places to reduce budget. And when you think about it, investing in these areas are unlikely to offer quick return on investment, so cutting back won't help the company's ability to meet top-line revenue targets in the short term. Avoid this temptation if possible.

Taking a look back at our company's history, we've seen first-hand positive results of investing in research during a downturn. During the bursting of the tech bubble in 2001, we made a difficult financial decision to invest in R&D when many others were pulling back. During that time, we created some of our most popular products.

Even though your core business operations might have already been cut to the bone through trimming every conceivable part of the budget, you hopefully still have some resources to focus on projects that will give you a long-term strategic advantage over competition. And at times like these, it's virtually impossible to avoid a short-term budget crunch, so make sure not to derail your long-term vision to make near-term numbers look good. There may be some innovative-related sections of the business where it might make sense to pull back, but make sure you don't pull back on all research. Innovation is the driving factor for technology companies, so if you're not able to innovate now, you may be in trouble down the long-term road.

2. Invest in growth areas
A positive outcome of a tough economic time is the way it forces us to focus. When things are good and there's lots of growth and budget to go around, we don't need to scrutinize spending. The result is that we spread our spending too thin in healthy times. In some ways, better innovation decisions are made in hard times because more thought and effort is being made to determine where investment will happen. A downturn lets us concentrate on the few key areas of innovation that will definitely make an impact and put an end to those investment areas that have been going on for years that have never made an impact.

Today, you don't really have to look too far to see what areas of innovation will help pull us out of this recession. Government and the environment are showing the engineering community where a lot of money will be spent in the future. Four areas we are looking into to build long-term growth are renewable energies, medical, robotics, and infrastructure. With all of the stimulus money being thrown at clean technologies, this is an obvious area to invest. There are many start-up companies as well as large well-established companies creating business strategies around green engineering solutions.

3. Realize you can't do it all
The temptation after researching a variety of growth areas is to try to invest in as many as possible. Of course, we want our companies to be as diverse as possible, but too much diversity can hurt you. When deciding on where to invest, make sure that the technology or innovation area of change aligns with your current business model.

A great recent example of a company making a sound investment strategy is the multi-billion dollar giant Applied Materials. Applied is one of the huge players in the semiconductor space, but with the semiconductor market quickly dwindling, Applied Materials has chosen to strategically invest in solar energy. The company that has been instrumental in nano-manufacturing technology over the years for semiconductors and displays is now taking this technology into green engineering. It's amazing to see how a company can leverage its existing expertise in a new area of growth.

Start-up companies have a big advantage over established companies at times like this. Start-ups can be more nimble and change directions more quickly based on where funding is going, although this advantage can turn into a hindrance if start-ups never get to a point of deciding what growth area they'll focus on. In times like these, regardless of whether you're an established company or a start-up, you must realize you can't do it all.

4. Prototype cheaply
When talking about innovating during a downturn, it's crucial that we don't forget the fundamentals of innovation. One of the crucial steps of the innovation process is the creation of the functional prototype of the idea or project. Creating a functional prototype has many advantages: it helps demonstrate your idea to management and/or investors; it lets you work out bugs early and test your design; it lowers financial risk; and it can speed time-to-market.

Prototyping is something that every engineering individual or team should go through at some point in their design. But if you wait too long to prototype your idea or project, or spend too much money in the prototyping process, your idea or innovation might not live to see the future. Therefore, when prototyping your idea or innovation, it's important to use the right tools and spend just enough (and not too much) time and effort transforming your idea into reality.

In these challenging economic times, it can be easy to skip this step and not invest resources in prototyping. This can lead you into funding something that might not have long-term value. Of course, we all have to watch our budget and don't want to over-invest in a prototype, but there are ways to create a prototype and prove the value in your project or idea without spending too much money in the process.

Make sure your design and research teams are using tools that enable them to move quickly and nimbly with their prototype. More and more engineering teams are designing at a system level during the prototyping process rather than using low-level tools. One methodology for prototyping that we've seen customers use and have success with is graphical system design. This approach abstracts the implementation details that have typically required more specialized skills. Using high-level software tools and PC-based hardware allows smaller design teams to accomplish major design and prototyping feats quickly, without wasting too much time and money.

Dr. James Truchard is CEO, president, and cofounder of National Instruments. He is the co-inventor of the NI LabVIEW graphical development environment and is recognized as an industry leader for revolutionizing the way engineers approach measurement and automation. Truchard holds a doctorate in electrical engineering as well as bachelor's and master's degrees in physics, all from The University of Texas at Austin.

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