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Tuesday, 18 September 2012

Revention - Inventions in a recession?

Economists love a good portmanteauStagflation, say it with me, staaaag-flation, is the slithering word that indicates the unfortunate combination of economic stagnation and inflation.  As necessity is the mother of invention, when IPKat reader Zoe Birtle pointed out this post by the BBC, I thought we could do with another nifty term.  So, let's go with revention: invention during a recession.

The BBC reports on a survey which indicated one-third of Britons report that the recession has "increased the amount they were coming up with inventions and innovative, money-saving solutions."  Not sure what the other two-thirds are up to, but that does beg the question - what does a recession do to innovation?

Finding photos of cats with beer was challenging.
In case you haven't noticed, we are in a recession.  Last week, a poll of 50 economists, who can't be wrong, suggested that the economy will bounce back with 0.6 percent growth this quarter.  The unusually wet weather and the extra holiday from the Queen's Jubilee are said to have contributed to the three quarters of GDP contraction earlier this year.  Fingers crossed that we are back on track and that the programme of printing mon..., erm, Quantitative Easing, has us coming out of a recession sooner rather than later.

Innovation becomes more important during recession as it is a means to increase productivity. Part of the cycle will be the process of Creative Destruction.  Set out by Joseph Schumpeter, Creative Destruction describes how the destruction of one regime (say, in the time of economic crisis) can give rise to the new.  Professor Richard Florida refers to our current economic crisis as a Great Reset. He argues that this era should make room for a new era of innovation, creativity and technological change.  Florida also points to economist Christopher Freeman's work which finds that innovation tends to be bumpy.  We may be in a period where innovations are "bunching" up and will come into force when the economy improves.

Business themselves operate on cycles and some businesses, such as funeral parlors, are considered essentially recession-proof.  One surprising growth area in the UK has been breweries.  Nearly 160 new breweries opened in the UK in the last year.  While total beer sales have fallen, "cask real ale" sales have stayed relatively flat.  Where quitting your job and buying a vineyard is not an option in the British climate, apparently opening a brewery is.  (Watch this space for the forthcoming IPKat tipple which promises hints of catnip with suggestions of mackerel and ball-of-string aftertaste.)

So are we in a period of revention?  Is this the world's worst portmanteau?  Or can IPKat readers come up with a better expression in the comments?

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