I'm here visiting with clients, and talking with the press. My press interviews are mostly on the economy (no surprise), so I need to climb out from under from the Palo Alto Pleasure Dome and get grounded.
The overarching advice to clients in these down times is "Simplify". Examine closely how to extract the most benefit out of existing investments and people. Determine which projects are critical to your ability to weather the storm, and delay those that can be delayed.
But simplification should not stifle innovation. Companies that can afford to innovate and invest in an economic downturn are more likely to survive. Some innovation can be implemented tactically, whereas other innovations help shape the future state. The worst thing that can happen is that innovation is shut down in favor of the purely tactical (I've written about this extensively). The best case is that simplification increases the ability of the corporation to focus on innovative ideas.
The great thing about Palo Alto (and other similar places worldwide), is that it is an engine for turning innovation into products and services. So much of the output of these engines fuels the economy, personal productivity and enterprise efficiency (consider virtualization technologies, predominantly spawned from the brain of Mendel Rosenblum at Stanford). In turn, innovation-turned-product fuels more innovation, keeping the Xanadu engine working.
So, Palo Alto is more of an Eden...a generative place...below its Pleasure Dome exterior.