Apr 15, 2021

BCG announces top 50 most innovative companies of 2021

Innovation
Data
analysis
Sam Steers
4 min
Courtesy of Getty Images
Boston Consulting Group (BCG) has announced its top 50 most innovative companies of 2021 in a report that includes the likes of Apple and Microsoft...

Boston Consulting Group (BGC) announced today the top 50 most innovative companies in 2021 which includes Apple, Microsoft and Samsung.

The American management consulting firm released the list as part of a yearly report with the latest edition named Overcoming the Innovation Readiness Gap being published earlier this month.

The report which also contains other sections such as 'The CEO Innovation Agenda' found that, out of the 50 companies surveyed, Apple took the top spot.

Based in California, the tech giant is most well known for its iPhone series but its latest innovations include a sleep tracking feature for Apple Watch arriving in the Autumn, and HomeKit-enabled video cameras for Apple TV, allowing users to receive doorbell notifications showing a live feed of their front door.

Second place was awarded to the American holding company Alphabet, whilst Amazon, Microsoft and Tesla were ranked in third, fourth and fifth place.

BCG's report assessed each of the companies against specific criteria including 'Leadership', 'Teaming' or teamwork, and the 'Innovation Readiness Gap.'

Leadership

Results from BCG's analysis under the Leadership criteria showed that "90 per cent of companies that outperform on innovation outcomes have clear C-Suite ownership of the innovation agenda, whilst 20 per cent of that 90 per cent were found to be "innovation underperformers" with C-Suite ownership.

BCG says that leadership is about " leading innovators driving results from a clear CEO agenda. Unambiguous C-level ownership distinguishes top performers from underperformers as measured by share of sales from new products and services."

The results are displayed in the pie chart below.

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Image: Boston Consulting Group.

'Teaming'

Another criteria the companies were assessed against was 'Teaming' or teamwork. BCG states: " It’s impossible to achieve innovation readiness without a strong link—indeed, a virtuous cycle of collaboration - between product development and facing functions.

"Establishing this cycle and keeping it active are perennial challenges. In fact, this year the global innovation executives we surveyed cited it as the top obstacle to achieving higher returns on innovation investment."

The results for this criteria showed that 31 per cent of the companies surveyed saw "poor collaboration between Marketing and R&D as the largest obstacle to improved return on innovation investment."

The survey's results are shown below.

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Image: Boston Consulting Group.

'Innovation Readiness Gap'

Earlier in 2021, BCG asked respondents several questions which allowed them to use their 'innovation-to-impact (i2i) benchmarking framework to "assess the readiness of their innovation systems." BCG says that an i2i score of 100 would be classed as 'perfect', however it pointed out that only about a quarter of committed innovators achieved a score of 80 or above.

"The median committed innovator fell short of best practice on every i2i dimension, sometimes significantly. And by definition, if that’s how the median performer fared, half of committed innovators score even lower," BCG said in a statement.

An explanation of the Innovation Readiness Gap is provided below.

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Image: Boston Consulting Group.

The Impact of COVID-19 on Innovation

The Coronavirus has affected businesses in many ways from being forced to work from home to financial difficulties and much more. However, one area that doesn't seem to have been negatively impacted is innovation and total shareholder return.

The shareholder return on the companies surveyed saw a significant increase of 17 percentage points compared to that of the top 50 companies in 2020. Commenting on the rise, BCG stated: " Our pre-pandemic 50 most innovative companies of 2020 have outperformed the index by a staggering 17 percentage points in the past year—and even if you remove high-flying tech giants (Apple, Google, Amazon, Facebook, and Netflix), top innovators’ outperformance is still 13 percentage points."

If we look at shareholder return before the Coronavirus pandemic, it becomes a very different story.

Boston Consulting Group stated: "Superior readiness drives value creation - and resilience. Consider BCG’s annual roster of the world’s 50 most innovative companies.

"The 50 most innovative companies of 2007, just prior to the Great Financial Crisis, delivered total shareholder returns between 2007 and 2012 that were 4 percentage points higher per year than the market."

A graph detailing the shareholder return's acceleration during the pandemic can be seen below.

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Image: Boston Consulting Group.

From this data, it is clear that there has been a rise in the total shareholder return since December 2019. The dark green line, representing the Boston Consulting Group Most Innovative Companies results indicates a total rise of 33 percentage points, and a rise of 17 percentage points over the world data, which stands at 116 percentage points.

Innovation as a Priority

Boston Consulting Group saw a rise in the number of organisations that reported innovation as one of their top three priorities after being surveyed earlier this year. In a statement about the result, BCG commented: " The number of companies reporting that innovation is among their organizations’ top three priorities is up 10 percentage points in 2021 to 75 per cent."

This is the largest year-over-year increase in the 15 global innovation surveys that the company has seen since it started conducting them in 2005.

In comparison, 65 per cent of organisations surveyed marked innovation as a top three priority.

BCG's Top 50 Most Innovative Companies of 2021

Below is the full list of BCG's top 50 most innovative companies, as led by Apple. It is also displayed, along with further information in the full report.  

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               Image: Boston Consulting Group.

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