Summary
After Forbes has has published the annual list of the “Most Innovative Companies” for many years, CNBC has published the 2018 edition for the first time. The ranking is still compiled by Boston Consulting Group’s (BCG), who have surveyed wide range of countries and industries since 2005 to help cast light on the perceived state of innovation in global business. Like in recent years, this year’s report names 50 companies that – according to BCG – are seen as “most innovative” worldwide.

The methodology is based on a perception survey among 1,000 senior managers across multiple industries globally and – complementary – on three financial measures over a three-year period: total shareholder return (TSR), revenue growth and margin growth. Respondents’ votes counted for 80 per cent of the ranking, while TSR for 10 per cent, and revenue and margin growth for 5 per cent each. The top managers were asked to rank the most innovative companies both in their own and in all industries and five-year growth is indicated in TSR. Due to this mixture of collecting perceptions AND “hard facts” plus the expertise of the seniority of survey respondents, this methodology is a robust and plausible way to measure the “innovativeness” of companies – unlike other ranking approaches that either only rely on surveys OR on so-called “hard facts” such as patents only. Respondents to the survey were not only asked to rank the most innovative companies but also to name the most important drivers for innovation in their view.

As the subtitle of this year’s ranking “Innovators Go All In on Digital” suggests, digitalization is seen as one key driver for innovation. When asked “Which of the following areas of innovation and product development will have the greatest impact in your industry over the next three to five years?”, the most frequent responses were “new products” (41%), “technology platforms” (41%) and “big data analytics” (39%).

Like last year, Apple and Google are at the top of the list, followed by Microsoft at #3. Tesla, last year’s #3, dropped 4 positions to #7 this year. Most remarkable are two new entrants to the Top 10: Uber at #9 (coming from #17 last year) and Alibaba at #10 this year, not even listed in 2017 – a spectacular jump! Bayer, the German-based pharma and agrcultural giant – just about to swallow Monsanto -, dropped from #11 last year to #27 in the new list. With Bayer dropping significantly, it is also worth mentioning that this year’s list does not cover any healthcare company among the top 20 – although the industry strongly claims to be highly innovative. The best ranked healthcare company is J&J only at #25. Geographically, North America is seen as having by far the most innovative companies, with 27 corporation featured on the list. Europe has 16 entrants, up from 10 last year. Switzerland, regularly rated as one of the most innovative countries worldwide, only has one company on the list: Nestlé at #50.

In conclusion, “Most Innovative Companies” is a highly valuable ranking to gauge and compare the innovation status of individual companies. As the ranking has a long history, comparisons and developments over time are possible. The only limitation is that the ranking is built on senior managers’ perceptions only – a very important stakeholder group, but not the only one that counts.

You can read the CNBC article incl. the full top 50 ranking table here.

Detailed information on the ranking and a PDF report can be found on the BCG website.