Pretty much the only reason for a business to "stay alive" is to make profit. It is the only reason they get capital available to do any work, production or R&D.
That’s why tech innovation is so rapid during wartime.
That is because government don't care what it costs, it isn't their money.
All very true if you think innovation is simply the product of how much money is thrown at a problem.
There is, however, a very well known method of encouraging innovation called the skunkworks. Take your most unconventional thinkers, put them in an underfunded lab and pit it against the “conventional lab” which is well-funded.
The skunkworks surprisingly often outperforms the “official” organization.
http://en.wikipedia.org/wiki/Skunkworks_project
A bunch of engineers in multiple small companies that are desparately trying to keep afloat creates a whole bunch of skunkworks.
Or maybe not. I guess we’ll find out.
Quite so. But I've been in companies when the money was rolling in without a great deal of effort, with high margins, and I've seen the complacency that results.
IOW, a company with 25% margins is not all that highly incentivized to increase it to 30%.
A company with a 5% margin is very highly incentivized to keep that margin or increase it to 10%.