Technological innovation is what pushes us forward—and it’s what makes some of us rich beyond our wildest dreams. As a consumer, tech innovation is fascinating because it’s what grants us access to the . As an entrepreneur, innovation or the lack thereof will make or break your tech company; if you can create a new product that truly changes the landscape in some key way, you could make a fortune and build a legacy for yourself. As an investor, learning to sniff out the businesses and areas with the highest potential for tech innovation could help you win big on your long-term plays.
Of course, for technological innovation to occur, the conditions have to be just right. So what are the conditions that give rise to innovation?
First, you need to have a . This isn’t to say that innovation can’t happen during an economic downturn, but it’s much more likely to occur. Good economic conditions mean that more people have time resources, and the confidence to start their own businesses. Investors are more willing to take risks, and people are more willing to spend money on new technologies. In harsh economic conditions, money is much tighter, and entrepreneurs and inventors have a harder time getting the things they need to continue pushing forward.
It also helps for an environment to have minimal regulations to contend with. Laws and regulations can be a good thing; for example, strict regulations in the medical field prevent consumers from having their information shared unnecessarily, and prevent novel solutions from entering the market too soon.
However, excessive regulations can also make it difficult to innovate. For example, let’s say that in order for a new solution to enter the market, it needs to be tested over the course of two years, and needs to be tested by thousands of people. Suddenly, the costs of development are much, much higher, and the earliest you can start generating revenue is much further away; entrepreneurs see this, and consider going after much lower-hanging fruit.
This is why we often see more tech innovation in areas with looser regulations. For example, early in the development of self-driving cars, of its streets for autonomous vehicle testing. Many companies flocked to the state to develop their self-driving vehicles there.
For a company to innovate new technology, it needs to have strong leadership. A good leader will serve many functions, including: