Companies with a history of innovation have built legends and large revenue bases by capitalising on good ideas in good times and bad. Drew believes that difficult economic times are actually a spur to innovation. "You're forced to be creative and innovative because you have less resources with which to work," he says. Take Scotch tape. 3M engineers developed it and masking tape during the biggest downturn of them all, the Great Depression. Boldly, 3M established its Central Research Laboratory in 1937, the deepest trough of the Depression, just to let its engineers and researchers fool around with new materials. By the end of the 30s, the lab had not only come up with new adhesives and abrasive materials - the company's core products - but also reflective materials that made highway signs and markings easier to see on dark and stormy nights. Over time, 3M turned those innovations into billions of dollars in sales.

The idea that a bad economy is an invitation to innovate is now a core 3M belief. As 2001 began, and all the major economic indicators continued pointing south, W James McNerney Jr, who became 3M's CEO last January, launched a set of initiatives jointly called Acceleration. The plan moves responsibility for product development away from the company's individual business units and back to the corporate office so that the corporation itself can step in with dollars when a unit doesn't have the budget to support an innovative project. With that level of executive commitment, Drew is sinking his resources into new projects, such as collaborative engineering tools, and cutting back on standby programs, such as internal user support. Drew says he's managed to pacify his users by creating a data warehouse that gives them access to information, such as where to find a list of accounts receivable to generate a report, that they used to have to call an IT person to dig up. And he says his department has actually cut costs by installing the new technology. In order to do any of these things, Drew says, it's critical to have a mandate from the top to put innovation over user convenience.

Another company with a history of innovating in hard times is Memphis-based FedEx. FedEx spent the recessionary years of 1979 and 1980 introducing computer systems that managed shipments and coordinated pickups for customers. Then, when the economy slumped again between 1989 and 1991, FedEx developed a satellite-based system to locate vehicles and an early supply chain application that provided a centralised routing management service. Although FedEx's marquee technology accomplishment, its Internet-based tracking system, debuted in 1994 during the early days of the technology boom, the company is still expanding its Web presence even as the bloom fades from the dotcom rose. In May, FedEx downgraded earnings expectations for its fourth fiscal quarter by nearly 30 cents per share, but executive vice president and CIO Robert Carter says the company is increasing its level of investment in Web customer service technology, despite his expectation that his overall IT budget will be cut. New projects include wireless access to package-tracking information and FedEx InSight, an application intended to allow people to customise their view of package deliveries and automatically receive notification via e-mail or fax when a package does or does not arrive as scheduled. InSight's customisation capability eliminates the need for customers to use a package-tracking number every time they want to track a shipment. In other words, in an increasingly customer-centric business environment, the application tracks shipments by user, not by package.

An unblinking focus on the Web makes sense for the company, even as it soaks up precious dollars. Just this year, more FedEx customers used its Web site for service than called the company's toll-free number. FedEx now averages 1 million package tracks a day at Fedex.com; it does fewer than 100,000 per day over the phone. That's important because, according to Carter, every call to the toll-free line costs the company $US2.14 on average, while every customer inquiry on the Web site costs an average of 10 cents. Like Drew, Carter has the support of his CEO in prioritising innovation. And like 3M, FedEx is cutting back on supporting users and other basic services in order to fit new projects into the budget. Carter says the company will go even further to continue innovating if it has to. "If we have to pull back on back-office or service capabilities, we will. We will not pull back on customer-facing technologies," he says. "It's a core part of the FedEx culture. We'd rather invest in [new technology] than in trucks or planes."