The top 50 most innovative companies in the world, tech firms lead

Digital innovators continue to outperform in the current market, with focus on holistic and committed approaches to innovation and product development correlated with success. Apple, Google and Microsoft subsequently continue to rank among the most innovative companies on the globe, according to the latest available analysis.

Innovation remains a priority for businesses seeking to edge out ahead of their competition, something which has seen a growing number of organisations utilising M&A activity as a means to improve. The drivers of innovation are increasingly shifting however, with digitalisation and automation increasingly the focus, according to the ‘Most Innovative Companies 2018’ report from The Boston Consulting Group. The analysis also sees the firm ranks the top fifty innovators for the new year.

50 most innovative companies

As is the case with multiple studies of innovative companies, Apple once again takes the number one spot. Despite falling sales numbers, and widespread criticism of the group’s $1000 price tag for the latest iPhone, the organisation remains renowned for its innovative approach to products tailored to the middle class.

Google, meanwhile, took the number two spot, following another year of expansion, which saw the continued broadening of the firm’s innovative business tool, G Suite, while Microsoft also continues to dominate in the software space – in at number three – as the group’s Azure cloud continues to grow into new spaces, such as Blockchain. Amazon comes fourth, with its increasingly innovative supply chain being used to minimise pay and conditions for staff, and maximise profits for the firm’s leadership, while Samsung rounded off the top five with its broad array of products.

The top positions were by-and-large all resided with companies whose basis is in someway linked to digitalisation and automation. Uber, Alibaba and Airbnb, which have leveraged organisational efficiencies and ease of access have taken out positions 10-13, with competitors in the travel and accommodation sector, nowhere to be seen on the list. Overall the US remains home to the most organisations, at 27, although Europe, on 16, has cause up somewhat on its 10 entries in 2016.

In terms of the innovation areas and product developments that respondents believe will have the most impact over next three years, technology platforms are the most cited by strong and weak innovators alike – at 45% for strong and 32% for weak. New products are eyed by 40% of strong and weak innovative respondents apiece. Big data analytics and the speed of the adoption of new technology are also highly cited by strong innovators.

One area in which consultancy firms have become increasingly invested, digital design, was cited by 41% of strong innovators as an area of impact, while the rollout of mobile products and capabilities came in at a similar level for strong innovators. The area of least interest for both parties includes marketing, new business models and supporting capabilities.

What makes a strong innovator

The firm notes that the current gulfs, in some instances, between strong and weak innovators mean that catchup will be increasingly difficult. To better understand where strong and weak innovators differ, the firm analysed various aspects of the innovation project – from governance and management to organisation.

In terms of governance, strong innovators were much more likely to allow room for iterations and adjustments (81% vs. 24%) and protecting radical projects from strict cost controls (78% vs. 23%). Other areas that showed considerable difference between governance style, include providing room and time for experimentation (78% vs. 29%) and openly defining a project target (76% vs. 32%).

In terms of management, a culture for experimentation and incentives linked to radical innovation, were cited much more strongly at strong innovators (78% and 76% respectively) compared to weak innovators (28% and 31%).

The firm also sought to identify how innovation teams are structured at strong and weak innovators respectively – finding that at strong innovators, teams are much more often staffed with people that have relevant skills (80%) compared to weak ones (43%). This could reflect the ability of strong innovators to pay, as well as attract talent in a tightening market. The research also found that all relevant functional groups are represented at many more strong than weak innovators (80% vs. 41%), while 78% said that they have committed people to efforts, full time, compared to 30% at weak innovators.

Commenting on the results, Michael Ringel, a BCG Senior Partner and a co-author of the report, said, “Slow movers on digital innovation risk being left behind by those that invested sooner and more decisively. Competitive advantage increasingly depends less on products and more on the digitally enabled services that surround them. From today’s predictive maintenance offerings for industrial goods to tomorrow’s Internet of Things, digital strategists need to explore and master new innovation domains. And as more advanced technologies, such as artificial intelligence, enter the mainstream, the stakes will keep getting higher.”