When we reached the depths of the recession, one prevailing thought was that we needed to innovate our way out of it if we were ever going to get back to economic health. After all, that's what we've done before.
In the '80s, the birth of the computer helped pull us out of recession, and in the '90s it was the Internet boom that drove growth after another recession. In the early 2000s, it was a boom in housing that drove GDP growth instead of a boom of innovation, although we found out later that housing was a bubble -- and we all know how that ended.
This time around, we needed an innovation boom to drive capital investment, research and development spending, and consumer spending once again. While those of us in the financial community were talking about the need for innovation, it was the business community that was actually making major advances. Where does the innovation boom stand now? You might be surprised by the progress we've made.
Electric vehicles are here Since Henry Ford made the Model T a vehicle for the masses, there haven't been many monumental shifts in the auto industry. Models change and improve, but the pistons still go up and down, and we still go to a gas pump when our tanks are empty.
While most of us were worried about how to pay the bills during the recession, Tesla Motors Inc (NASDAQ:TSLA) was working on a vehicle that turned the auto industry on its head. The Model S is the first electric vehicle that has made going electric conceivable for the masses. It gets nearly 300 miles on a charge, drives better than most sports cars, and doesn't need to be filled up at the pump.
What's more impressive is that the Model S has laid the ground work for a complete EV revolution. Charging stations are popping up around the country, and Tesla is supplying Toyota with drivetrains, while Ford, General Motors, Nissan, and others are quickly playing catch-up to get into this growing market.
Innovation in electric vehicles seemed to have happened overnight, and Tesla's Model S launch may later prove to be the point when the auto industry changed forever. That's no small feat of innovation.
We've struck black gold Dependence on foreign oil has been a concern for decades, but over the past five years that fear has all but vanished. The reason? Fracking.
Halliburton Company (NYSE:HAL) has been one of the main technology developers and service suppliers for fracking to extract oil from rock miles beneath the earth's surface. One of the main products it supplies to the industry is chemicals that get pumped into wells along with water and sand, which allows for the underground fracturing and release of hydrocarbons. Of course, these are the same chemicals that are so controversial and Halliburton has been the target of its fair share of environmental complaints.
But without this company we may not be producing as much oil and gas domestically as we are today. That's where the real impact on U.S. oil production and imports has been dramatic.
Since fracking became commonplace, net oil imports are down to 35.9% of consumption this year from 60.3% as recently as 2005. Fracking is another transformative innovation that took place during the depths of the recession and may eventually lead to U.S. energy independence.
Solar energy is here Before the recession the solar industry was making progress cutting costs and becoming competitive with the grid. But the recession and subsidy cuts around the world put the industry into desperation mode -- something it's just emerging from now.
What you may not realize is that desperate times are when some of the best inventions and innovations take place. When your very survival depends on creating new products, new ways to cut costs, and new ways of doing business, it can result in extraordinary improvements.
The solar industry is a perfect example of this, experiencing the lowest of the lows and now emerging stronger than ever. In the past three years the residential and commercial solar lease has become commonplace, manufacturers have slashed costs, and efficiency has jumped across the industry.