Economic adaptation refers to changes in behavior on the part of individuals, businesses and even entire societies in response to changes in the economic environment. Economic adaptation may occur due to efforts to cope with the effects of a recession. Currently, governments and businesses are seeking ways to adapt to the economic consequences of climate change. Positive changes like the development of new and better technology can also lead to economic adaptation.
Consumers and Economic Adaptation
When a recession strikes, people typically take measures to cope with the change in economic climate. Families may choose to stop at a fast-food restaurant instead of a steakhouse. Other economic adaptations to tough economic times include reducing unnecessary spending, taking extra jobs and saving more as a cushion in the event of job loss. These economic adaptations can be beneficial when they prompt people to manage their money more efficiently.
Innovation and Economic Adaptation
Another motive for employing strategies of economic adaptation is the need for businesses to stay competitive when faced with technological innovations. Existing producers in an industry may adapt by implementing the new technology, or they can try to improve the systems they already have. An example of the latter is the typewriter industry. Faced with growing competition from computers in the late 1970s, typewriter producers began introducing machines with advanced features like data storage and the ability to communicate with computers.