As we emerge from the worst economic downturn in decades, companies may be looking to return to business as usual. Recessions are stressful and boring. We want to get back to growing and having fun again. However, the speed and severity of the recent contraction have altered saving and spending patterns for consumers and businesses alike. It is unlikely that these patterns will be reversed overnight.

Leading economists and investment professionals are counseling caution and pointing to the emergence of value as the chief criterion in purchasing decisions. There are few industries that can claim to be immune to the impact of reduced discretionary spending and more value-conscious buyers. How you respond to this new reality may determine how much fun you have this year and the next.

Companies around the world that are proactive about their approach to innovation and are employing strategies to execute well will win over the long haul. We are seeing five innovation strategies and tactics emerge in response to this "new normal." The beauty of these approaches is that they may benefit your business even if the prognosticators are wrong, and we see a snap back in consumer spending and business investment. We like strategies that do not require us to predict the future.

As you consider these five strategies, think about them not as a menu of options, but as elements of an integrated approach to innovating in this economic environment.

Innovate in Reverse

For years companies have invested in high-end technology for the developed world and then looked for ways to adapt products to emerging-economy price points. With the globalization of talent and trade, it is now better to invent products for the developing world in those markets -- where cost has always been a primary engineering constraint-- and then distribute them globally. This strategy can create lower-cost products that are much more competitive in the developed world.

General Electric has recently published articles highlighting its success with this strategy in the ultrasound and electrocardiogram markets. The risk of cannibalizing higher-end products is lower than the risk of being disrupted by an emerging market competitor that commercializes a low-cost option in your home market.

Make Your Product Worse

This is a variation on the first strategy, but it is important to realize that the innovator's dilemma is alive and even more acute during times of economic upheaval. Recessions historically have given birth to cycles of disruptive innovation. As buyers shift their focus from the feature-packed, high-performance products that have overshot the market and place a priority on value, you run the risk of leaving yourself exposed without a low-end offering.

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