Corporate innovation in the technology industry and beyond has been significantly impacted by the worldwide economic and political instability of the last year.

A bitter concoction of global recession, global inflation, and unexpected instability has resulted from the international fight against COVID, the Ukraine-Russia conflict, and the economic repercussions of COVID lockdowns and supply chain disruptions.

As a result, companies have been cutting costs and putting hiring on hold, and investors have been more cautious. There will be a chilling impact on future innovation as a result of these changes.

Yet, perhaps there is a glimmer of hope when it comes to the potential for innovation. It’s possible that competition and other market factors may spur innovation and technological progress.

The Short-Term Effects

Inventive hubs in both established businesses and new enterprises will feel the heat from the current economic downturn and political unrest in the near future.

Budgets for both internal and external innovation within companies are expected to be cut. That is, they will cut funding for R&D and probably prioritise programmes with short-term implications on revenue above those with longer-term vision.

Companies will also reduce spending on novel partnerships with other pioneers and on costly new technologies. As early-stage firms weaken and larger organisations seek to create new technologies at a lower cost by buying at a discount rather than constructing from scratch, we anticipate an increase in acquisitions of such businesses.