The Year in Innovation

BusinessWeek (Arndt) - The innovation industry took a hit this year, as executives dialed back on initiatives—and paid the price. But some encouraging trends also emerged.

Trickle-up innovation may best represent what some are calling today's "good enough" marketplace. Multinationals used to develop their top-of-the-line products for the developed world. These goods then "trickled down" to emerging markets as even better replacements were introduced to affluent consumers. Now the process is being flipped. Companies increasingly are designing low-priced, no-frills products for those at the bottom of the pyramid and trickling them up to the developed world.

Open innovation spread far and wide as companies sought to offset cuts in their own R&D budgets by soliciting help from outsiders, including customers, suppliers, and freelance experts. While companies such as Johnson & Johnson have used the Internet to vacuum up worthwhile ideas and practical assistance since the previous downturn almost a decade ago, the Great Recession is converting more to open innovation today. Clorox, for example, says 80% of its new products included input from at least one partner.