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Ranked: The 50 Most Innovative Companies

 

Ranked: The 50 Most Innovative Companies

Courtesy of , Visual Capitalist

The 50 Most Innovative Companies in 2020

Ranked: the Top 50 Most Innovative Companies in 2020

Corporate longevity is on the decline. In the 1960s, a typical S&P 500 company was estimated to last more than 60 years—these days, the average lifespan is just 18 years.

In today’s fast-paced world, companies need to stay relevant in order to survive. Because of this, it’s become increasingly more important for businesses to prioritize innovation.

This chart looks at the top 50 most innovative companies in 2020, based on a survey by Boston Consulting Group (BCG). The companies have been ranked based on four variables:

  • Global “Mindshare”: The number of votes from all innovation executives.
  • Industry Peer Review: The number of votes from executives in a company’s industry.
  • Industry Disruption: A diversity index to measure votes across industries.
  • Value Creation: Total share return.

Breakdown of the Leaderboard

BCG has been ranking the most innovative companies since 2005. Here’s a look at the top 50 most innovative companies in 2020:

Rank   Company          Industry             HQ      Change from 2019  
1 Apple Technology U.S. 2
2 Alphabet Technology U.S. -1
3 Amazon Consumer Goods U.S. -1
4 Microsoft Technology U.S. -
5 Samsung Technology South Korea -
6 Huawei Technology China 42
7 Alibaba Consumer Goods China 16
8 IBM Technology U.S. -1
9 Sony Consumer Goods Japan return
10 Facebook Technology U.S. -2
11 Tesla Transportation & Energy U.S. -2
12 Cisco Systems Technology U.S. 5
13 Walmart Consumer Goods U.S. 29
14 Tencent Other China return
15 HP Inc. Technology U.S. 29
16 Nike Consumer Goods U.S. return
17 Netflix Other U.S. -11
18 LG Electronics Consumer Goods South Korea -
19 Intel Technology U.S. return
20 Dell Technology U.S. 21
21 Siemens Other Germany -5
22 Target Consumer Goods U.S. return
23 Philips Pharmaceuticals & Medtech Netherlands 6
24 Xiaomi Technology China return
25 Oracle Technology U.S. return
26 Johnson & Johnson Pharmaceuticals & Medtech U.S. -12
27 SAP Technology Germany 1
28 Adidas Consumer Goods Germany -18
29 Hitachi Technology Japan return
30 Costco Consumer Goods U.S. return
31 JD.com Consumer Goods China new
32 Volkswagen Transportation & Energy Germany 6
33 Bosch Transportation & Energy Germany new
34 Airbus Transportation & Energy Netherlands return
35 Salesforce Technology U.S. -2
36 JPMorgan Chase Other U.S. -16
37 Uber Technology U.S. return
38 Bayer Pharmaceuticals & Medtech Germany -14
39 Procter & Gamble Consumer Goods U.S. return
40 Royal Dutch Shell Transportation & Energy Netherlands -10
41 Toyota Transportation & Energy Japan -4
42 Nestle Consumer Goods Switzerland return
43 ABB Other Switzerland new
44 3M Other U.S. -5
45 Unilever Consumer Goods U.K. -13
46 FCA Transportation & Energy U.K. new
47 Novartis Pharmaceuticals & Medtech Switzerland new
48 Coca-Cola Consumer Goods U.S. return
49 Volvo Transportation & Energy Sweden new
50 McDonald’s Consumer Goods U.S. -29

 

When you think about innovative companies, Walmart might not be top of mind. However, the retail giant has moved up to the 13th spot on the list, an increase of 29 places since 2019.

Walmart has put significant efforts into its e-commerce and omnichannel offerings. For instance, the company launched NextDay Delivery in 2020, and now offers one-day delivery to a majority of the U.S. population. The company also has a stake in the Chinese e-commerce platform JD.com, which has grown from 5% to 12%.

Costco makes it to 30th place this year, and the company is known for its effective use of data. Thanks to the company’s members-only model, it has been able to compile a ton of information on its customers. It uses this data not only for marketing purposes, but to help streamline processes like recall notices. Costco also uses data monitoring sensors in its warehouses to save money on water usage and to spot any potential leaks before they happen.

Another company worth touching on is Huawei—the Chinese tech company has taken the 6th spot, a 42 rank increase since 2019. This rise in the ranks is likely due to the company’s significant $19 billion investment in research and development (R&D) in 2019. These types of investments seem to be paying off, as Huawei sold more smartphones in 2019 than Apple.

Innovation Leaders Come in All Sizes

While people may picture startups when they think of innovation and adaptability, big firms aren’t lagging far behind when it comes to innovation output.

In this context, firms with new product sales above their industry median are considered “innovation leaders.” Although 52% of small firms are considered innovation leaders, 43% of large firms still find themselves in the same boat.

Small vs. big firms innovation leaders

In fact, because larger firms generally have more access to resources and manpower than smaller firms, they often have an advantage when it comes to research and development and the creation of innovation-focused programs.

Investing in innovation shows a far greater payoff down the line—firms that invested 1.4x more in innovation input saw 4x the amount of new products sales.

Innovation investment pays off

Innovation as a Lifestyle

Unless you’re in a startup that’s hoping to get acquired by a larger firm, innovation can’t be a one-hit-wonder. Yet, despite its importance, innovation over the long term is hard to maintain.

There have only been 8 companies that have appeared on the list every year. Here’s a look at the companies that have consistently made the cut since 2005:

These companies are serial innovators, and have managed to create innovation systems to perpetually foster creativity and agility. It’s an intentional, laborious process—but when done right, the payoff can be huge.

 


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