In an uncertain economic climate, companies that demonstrate the ability to innovate are more important than ever and consistently outperform their peers.
- Companies that made the top 50 list of the 2023 Most Innovative Companies report had a 3.3% higher shareholder return than the MSCI World Index each year, according to Boston Consulting Group (BCG).
- Businesses that are prepared for action and ready to embrace change consistently surpass their competitors by delivering new products, embracing new markets, and developing new revenue streams.
- Those who refuse to innovate struggle to make any headway in the market.
- BCG’s findings reveal that companies that are prepared for the future have several traits in common, one of which is an innovation-driven culture.
why it’s news
With new technologies like artificial intelligence (AI) emerging and an uncertain economic outlook, companies that want to survive must be prepared to innovate. The evidence of this is on display throughout BCG’s most innovative companies report.
Innovation is among the top corporate priorities in 2023, BCG found. Almost 80% of companies listed it among their top three goals for the year. This is an increase from last year, when 75% of companies listed it as a priority. Primarily, businesses are emphasizing new product development and growing similar business models.
Costs are one of the main reasons companies gave for their decision to focus on innovation. Around 42% say that they anticipate they will increase spending on innovation this year. During the 2009 economic downturn, far fewer companies placed this much emphasis on innovation.
While more companies are pushing innovation, some are taking this strategy further and highlighting innovation as a critical component of their growth strategy. BCG found that successful innovation is driven by three factors: prioritizing innovation, dedicating money and talent, and readiness to turn investments into results.
Shortly after the pandemic, BCG found that only around 20% of companies met these criteria as “innovation ready.” However, that number is growing, with around 66% of companies committing to innovation as their top priority and nearly 90% planning to increase their funding.
The top 10 most innovative companies of 2023 were:
- Apple (computers)
- Tesla (electric vehicles)
- Amazon (e-commerce)
- Alphabet (digital advertising)
- Microsoft (computer software)
- Moderna (pharmaceutical)
- Samsung (consumer electronics)
- Huawei (telecommunication)
- BYD Company (energy generation)
- Siemens (manufacturing)