- Apple, Alphabet, Amazon, Microsoft and Samsung, are considered the five most innovative companies, according to BCG’s analysis of the 50 most innovative companies of 2020.
- Companies who are strongest at innovation most value advanced analytics, digital design and technology platforms.
- JD.com, Bosch, ABB, FCA, Novartis and Volvo join the list of the top 50 most innovative companies for the first time this year.
- Fastest movers include Huawei, who jumped from 48th to 6th, Walmart, who jumped from 42nd to 13th, HP, who jumped from 44th to 15th and Dell, who jumped from 41st to 20th.
- Only eight companies have made the list every year, and they include Alphabet, Amazon, Apple, HP, IBM, Microsoft, Samsung, and Toyota.
These and many other insights are from the Boston Consulting Group’s 14th annual report defining the world’s most innovative companies in 2020. When research began on the study earlier this year, Covid-19 had not yet emerged. As the BCG research team was completing The Most Innovative Companies 2020: The Serial Innovation Imperative study, the core findings regarding the scale and need for serial innovation became even more relevant. The research team found every company in the survey was quickly adapting to changing supply chains, customer demand and modifying manufacturing processes. BCG’s 2020 study is available for download free here (28 pp., PDF). The methodology is based on the firm’s annual survey of more than 2,500 global executives on innovation trends and its global innovation performance database of more than 1,000 firms.
BCG has also made an interactive dashboard available to compare the rankings of the 50 most innovative companies by year. You can find the dashboard here, The Most Innovative Companies Ranking Over Time.
Forbes also has an annual list of the world’s most innovative companies you can find here. The methodology Forbes uses is explained in the post, How We Rank The Most Innovative Companies.
Key insights from BCGs’ most innovative companies of 2020 include the following:
- Companies who excel at serial innovation double down their efforts during downturns, so they have a greater opportunity to invest and position themselves for a recovery faster than competitors. BCG found that companies pursuing a consistent, focused innovation strategy outperform over the long term, accelerating out of financial crises faster than their industry’s competitors. Companies who excel at serial innovation are always working to improve and calibrate the systems they rely on to innovate. BCG relied on these criteria and more to define the world’s most innovative companies of 2020, who are listed below:
- The companies most committed to excelling at innovation prioritize advanced analytics, digital design and technology platforms to strengthen their specific initiatives and create new ventures. BCG found that companies who excel at innovation can solve the AI paradox of the ease of achieving powerful results with AI pilots and the difficulty of replicating those results at scale. BCG finds that even when the most committed companies to innovation prioritize the use of advanced analytics, digital design and technology platforms, they still struggle to make their success with innovation programs repeatable. The following graphic compares the top innovation priorities for committed innovators by industry:
- Software and services companies have long been known for the disruptive innovation they cause in other industries, with BCG noting chemical companies, industrial manufacturers and others are attempting to do the same today. BCG notes the auto industry’s shift toward autonomous driving and a mobility model is one example, as demonstrated by Sony, Alphabet and Apple, as well as automotive companies such as Tesla, Volkswagen and Bosch. The rapid improvements being made in sensor technologies, including IoT devices, are also enabling automotive, aircraft and farm equipment manufacturers to pursue new business models based on real-time monitoring data. Interpreting data in real-time and providing insights on how to improve customer response times, ROI and ROIC are now common. The following graphic shows the market dynamics of boundary breakers from an innovation standpoint:
- Companies who are innovation leaders invest 1.4X their peers and achieve approximately 4X the output from their innovation programs as measured as % of sales. BCG found that innovation leaders are remarkably alike, regardless of size. The study found that smaller leaders make investments in innovation as a percentage of sales at a similar level as bigger companies. They are equivalent in time to market and achieve comparable returns. What most differentiates large companies who excel at innovation is the willingness to be patient and get next-generation products right. Leaders wait on average five months longer to launch new products as is shown in the graphic below under time-to-market: