INNOVATION SPECIAL ................... THE 10 MOST INNOVATIVE COMPANIES

THE 10 MOST INNOVATIVE COMPANIES

Which companies do innovation executives around the globe consider to be the very best at discovering and developing new products and services, and bringing them to market? We have posed this question in the Global Innovation 1000 survey in each of the past five years, and the majority of participants have consistently placed Apple and Google at the top of the list. This year, Amazon continued its rise up the rankings. It first appeared on this list at number 10 in 2012, jumped to the fourth position in 2013, and then rose to number three in 2014, moving Samsung down a spot. Tesla, which first appeared in 2013 in ninth position, rose to number five in 2014—likely reflecting not only its highly rated cars, but also its move to unilaterally make its patents freely available to competitors. Procter & Gamble rejoined the list in 10th place after dropping off last year, while Facebook—number 10 last year—fell from the list (see Exhibit F).

Consistent with one of the core insights of the Global Innovation 1000 studies over the past decade—that spending more on R&D does not drive more innovation (or better financial performance)—the top 10 innovators once again outperformed the top 10 R&D spenders in market capitalization growth, revenue growth, and EBITDA as a percentage of revenues (see Exhibit G).

Several of the industries represented by the 10 most innovative companies are also featured on the top 10 spenders list: software and Internet, computing and electronics, and auto. But interestingly, no healthcare companies have been selected by the R&D executives we’ve surveyed over the last five years as among the 10 most innovative, despite the fact that at least four of the top 10 R&D spenders each year have been healthcare companies. One possible explanation is that healthcare companies’ innovations tend not to be so closely identified with their brands, except, perhaps, by healthcare professionals.

In contrast, the four most innovative companies—Apple, Google, Amazon, and Samsung—all deliver branded products and services that are a part of most people’s daily lives, and they make new product announcements often. But making a media splash is by no means requisite to a company’s selection: Slow and steady can also win. For example, 3M keeps a comparatively low media profile but has products in wide use, and has been voted among the 10 most innovative firms in each of the five years we’ve asked the question.

• Barry Jaruzelski, Volker Staack and Brad Goehle
• Also contributing to this article were s+b contributing editor Rob Norton, and Strategy& senior campaign manager Josselyn Simpson, senior analyst Jennifer Ding, and campaign manager Kristen Esfahanian.