Does genuine tech innovation happen better in a recession?

Not sure about innovation, but it does seem like there's far better signal/noise ration during recession.

When the market's booming, weak ideas and uncommitted teams naturally find it much easier to get some funding - so perhaps the good ideas/teams are just as many (or more) as in a recession, but their overall share is far smaller.

A lot of it seems to be a result of the misconception of productivity that is so prevalent today. A lot of people seem to think that, because you're not actually doing something, the act of just sitting down and thinking and experimenting with ideas does not constitute being productive. They don't realize that, if everybody simply sat down and banged out work continuously, we'd always be doing things that we already know how to do.

Necessity is the mother invention. In the world of web software, tech innovation is also cultural innovation. Remember the New Deal? What if a tech innovation could enable us to do that again, without the government?

If some Ron Paul supporters could use youtube, social news, and email lists to effortlessly fund and fly a blimp for 6 weeks, maybe there is a tech innovation which could enable the nation to effortlessly fund giant wind and solar projects.

I believe it does. Innovation almost always comes from the human spirit being tested to its limits. It is then when humans are pushed to their breaking point that they truly innovate.

For instance, there are alot of people are hoping for $8/gallon gas, since $8/gallon gas would catapult the US into seriously investing in alternative energies.