As the financial crisis has taken over the news cycle, it’s very hard to focus on innovation. Yet, As Janet Rae-Dupree points out in her New York Times article Sunday, this is precisely the time when innovation is most important. She cites Howard Lieberman, founder of the Silicon Valley Innovation Institute and a serial entrepreneur himself, “ the companies that survive are those that keep creativity and innovation foremost.”

Indeed, hard times can be the source of innovative inspiration, according to Chris Shipley, executive producer of the DEMO conferences of new ideas. “Some of the best products and services come out of the worst times.”

There’s proof.  A new study in the peer reviewed journal, Marketing Science, shows that cutting back on R&D in hard times is exactly the wrong strategy.  Studying 69 publicly traded companies over 30 years, the researchers found that on average, shares in companies that announce new R&D efforts rise above their competitors—and long term, they beat their rivals who don’t focus on R&D.

For a PDF of the return on innovation study, see the attached file below.