BusinessWeek asked Eric Schmidt the CEO of Google this question. His response:
Innovation has nothing to do with downturns. A hot product will sell just as well in a recession as it will in a non-recession. Let’s imagine that we invented a better advertising product for television. What would our revenue growth be for that? Well, you’re into a $50 billion market, so it will be driven not by whether there’s a television ad recession but by what degree we can get people to substitute [our product] for the other. The strong companies understand this, and during a recession, they invest.
He also said
Many companies can skirt downturns entirely by coming up with innovations that change the game in their industries or create new ones. (When asked if Google’s strategy would change as the economy heads into a likely recession, he replied: “What recession?”)
