How to make the most out of a recession

Companies that invest in advertising and R&D fare better than those that cut back

Miracle Whip and Rice Krispies both became prominent brands at a very unlikely time: during the Great Depression. It was no accident. Recessions, it turns out, are among the best times to introduce new products. Numerous studies show that companies that invest in advertising and research and development fare better in recessions than those that cut back and hunker down. This has something to do with the fact that downturns make it easier for challengers to emerge and gain ground on companies that do the expected thing and stop spending. (Apple gave us the iPod during the 2001 recession). But recessions also bring a great deal of uncertainty, making this a big a gamble. Mess up, and it could be ruinous.

New Yorker

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