In innovation - as in life - drive, size, and skill are a powerful combination;
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.
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.
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:
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: How and Why Organizational Culture Eats Strategy for Breakfast, Lunch, and Dinner
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