ABSTRACT
Innovation is often considered as an outcome of resource abundance. This chapter will argue that situations with resource constraints can lead to novel processes and solutions as well. The argument is based on a synthesis of findings across three qualitative studies of how cost-cutting initiatives have stimulated innovation activities among petroleum supply firms. The necessity to respond to significant change in demand during a downturn represented a driver for the suppliers to introduce changes in order to sustain their position in the market. While these changes in the early stages of the downturn consisted of cutting costs on existing solutions and processes, they also entailed changes to the suppliers’ innovation model.
