The Top 50 Most Innovative Companies in 2020

The Most Innovative Companies of 2020

In innovation - as in life - drive, size, and skill are a powerful combination;

Drive to set an ambitious agenda and fund promising opportunities
Size to transform these opportunities into real sources of new revenue, and
Skill, as embodied in a well-tuned innovation system, to be able to do it over and over again.

And the world’s most innovative companies have been getting bigger.

The revenue of a typical “small” company on Boston Consulting Group's 2020 list of the 50 most innovative companies is $30 billion - up more than 170% from $11 billion (in constant dollars) since Boston Consulting Group's (BCG) first survey in 2005.

But drive and size mean little if your innovation system can’t build on them for serial success.

And here BCG's research offers a more sobering assessment.

Serial Innovation is Hard

Of the 162 companies that have been on BCG's top 50 list over the past 14 years, nearly 30% appeared just once - and 57% appeared three times or fewer.

Only 8 companies have made the list every year: Alphabet, Amazon, Apple, Hewlett Packard, IBM, Microsoft, Samsung, and Toyota.

When they began the research for this 14th edition of BCG’s Most Innovative Companies report, COVID-19 had not yet emerged.

As BCG explored the data and interacted with clients, however, it became clear that this year’s core findings - about the advantages of scale and the imperative for serial innovation - may be even more relevant today as innovation leaders need to adapt to rapidly shifting patterns of supply, demand, consumer behavior, and ways of doing business.

Ranked: 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.

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

Here’s a look at the top 50 most innovative companies in 2020:

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.

Sources

Ranked: The 50 Most Innovative Companies (Visual Capitalist)

Successful Innovators Walk the Talk (Boston Consulting Group)

Related Resources

Innovative Companies 2020: The Serial Innovation Imperative
In this paper, Boston Consulting Group details how facing turbulent and fast-changing markets, innovators need a well-tuned innovation system that can spot emerging product, service, and business model opportunities - and then rapidly develop and successfully scale them - over and over again. Download Now!

Ecommerce Logistics Leader Series
Co-written by Adrian Gonzalez and Mike Glodziak, this ecommerce logistics leader series describes how you can get to market faster, by leveraging your existing network, resources, and relationships to their fullest potential as well as how you can use logistics as a competitive weapon. Download Now!

Omni-Channel Logistics Leaders: 5 Key Insights to Improve Inventory Performance
This joint research study, conducted by LEGACY Supply Chain Services and Adrian Gonzalez of Adelante SCM, examines and provides insight into leading inventory management challenges, opportunities, and best practices. Download Now!

Keeping Up with the Retail Consumer
6 supply chain disciplines retailers must master - developed by Adrian Gonzalez, founder and president of Adelante SCM and LEGACY Supply Chain Services, with a foreword from Rick Blasgen, president and CEO, CSCMP. Download Now!

More LEGACY Supply Chain Services Resources