Apple and Google remain the world's most innovative companies, according to a report by The Boston Consulting Group, followed by Tesla, Microsoft and Amazon. A wide net for new ideas, leveraging data, innovation excellence and collaboration with external parties is found to set strong innovators apart from the rest of the pack.
In The Boston Consulting Group’s (BCG) latest 'Most Innovative Companies' report, the eleventh edition, the firm ranks the top 50 most innovative companies of the globe, as well as explores key innovation related themes. The analysis is based on a survey of 1,500 senior innovation executives – across a wide range of countries and industries.
Apple remains the top most innovative company for the 2016 edition of the ranking. The company, which the firm notes innovates by empowering its users, has been at the top of the list for more than five years. Google takes the number two spot, while Tesla Motors comes in at number three. Tech and consumer companies Microsoft and Amazon round off the top five.
The report notes that the number of disruptive companies finding themselves rising on the ranking continues. Netflix jumped 15 spots on last year’s ranking to number six, while Uber and Airbnb make the ranking for the first time, coming in at #17 and #21 respectively. The firm notes that the index continues, as in recent years, to be dominated by technology and car companies – the former through the focus on a range of new and disruptive technologies, while the latter sector continues to invest heavily in R&D.
The study also sought to identify what set self-identified strong innovators out from self-identified weak innovators. According to the results, one key aspect of what sets them apart is the breadth of the net employed to seek out innovative ideas and solutions. 78% of self-reported strong innovators ‘often’ and ‘very often’ leveraged internal sources for ideas, compared to 33% of respondents from weak innovators. Competitive intelligence was also more often leveraged at 72% of respondents compared to 32% of weak innovators, while customer suggestion was used by 70% of strong innovators against 26% for weak innovators. In general, almost all sources of ideas for innovation were leveraged by strong innovators at around 60% of respondents, while weak innovators tended to use every channel at less than a third.
Data analysis use was also found to be widely divergent between respondents that self-reported as strong or weak innovators. 86% of self-reported strong innovators said that they use company data, compared to 23% of weak innovators. Strong innovators were also much more likely to use patent data and scientific literature, at 83% and 81% respectively, compared to 18% and 16% respectively for weak innovators.
The report notes that many companies are reluctant to leverage ‘not-invented here’ technologies and solutions. This mindset, according to BCG Partner and report coauthor Andrew Taylor, “can be fatal,” he adds, "Today’s most successful innovators strike a strategic balance between internal and external innovation. They are smart and efficient at scanning for external ideas – and deft at bringing them inside.”
The increasingly technical nature of innovation means that relying on external parties to access or develop solution is becoming increasingly prominent – particularly in areas such as FinTech. Self-reported strong innovators were here also, found to be leveraging a range of channels to access external ideas and expertise – with M&A the most popular way of picking up innovative value.
Aside from acquisition, joint ventures, partnerships and corporate venturing too rank highly as a means used by strong innovators. 57% of the top ten strongest innovators used corporate capital venture initiatives, compared to 40% among the top 30 top innovators. The use of partnerships saw a massive increase in use among both top 10 and top 30 most innovative companies, jumping 58% between 2010 and 2015 at top 10 and 40% for top 30. Incubators appear to be the least favoured collaborative measure to acquire external ideas – used by only 19% of top 30 innovator companies.
BCG Partner and report co-author Hadi Zablit says, “Leading innovators combat the not-invented-here mindset through structure and culture. They complement traditional vehicles like joint ventures with newer approaches like corporate venture capital and incubators—and through incentives and leadership they foster a more outward-looking culture.”