According to the latest Boston Consulting Group (BCG) report, Most Innovative Companies 2021: Overcoming the Innovation Readiness Gap, the COVID-19 pandemic has demonstrated the importance of innovation excellence in turbulent times. Pharmaceuticals have performed superbly this year, joining tech and software companies that have dominated the rankings in recent years. The innovation survey has also identified important regional differences in the degree of innovation readiness of companies, with China and the United States leading the way.
The report reveals that only 20% of companies in the world have developed the high-performance innovation systems necessary to transform their ambitious aspirations into real results. Added to this are large differences in the level of preparation between sectors. Those companies that are committed to innovation (backing their priorities with investment) and prepared (putting the necessary practices and platforms in place) are up to four times more likely to outperform their competitors in revenue generated by new products, services, and business models. deal.
«Innovative companies have reaped the fruits of their investment in the context of the current crisis, both in value for their shareholders and in terms of social impact,» says Ramón Baeza, Managing Director and Senior Partner of BCG and one of the authors of this report.
17 companies got into the Top 50
This year’s ranking of the 50 most innovative companies underscores the importance of commitment and preparation. In addition to 33 companies that resist from last year, the 2021 list includes 12 companies that have returned to the top 50 after at least a year of absence, and five companies that make their debut on the list. Tech and software companies continue to dominate the ranking (Apple, Alphabet, Amazon, Microsoft, Tesla), yet this year, pharmaceutical companies have made a stellar appearance, with nine pharmaceutical companies on the list (tripling the 2020 number) , three of them qualifying for the first time (Abbott Labs, Moderna and AstraZeneca).
Differences in readiness for innovation are also reflected in performance, as evidenced by the return to shareholders generated by companies that have been ranked by BCG in the past. «Companies in the 2020 Top 50, before the pandemic, have outperformed the MSCI World stock index by a prodigious 17% in the last year, and even without the tech giants, the most innovative companies continue to outperform the index in 13 percentage points, demonstrating that investment in innovation translates into benefits both in the short and long term, and especially in times of crisis, ”says Konstantinos Apostolatos, Managing Director and Senior Partner at BCG and co-author of the report.
Regional differences on innovation
Estados Unidos sigue liderando el ranking con 27 empresas entre las 50 primeras (dos más que el año pasado), impulsado por empresas tecnológicas, de software y farmacéuticas. Europa, debido a su relativa falta de empresas tecnológicas y de software, tan sólo cuenta con 11 empresas en la lista (cuatro menos que el año pasado), no obstante, mantuvo sus resultados en otros sectores como el automovilístico, el de las tecnologías médicas, el farmacéutico, el industrial y el de la moda. Aunque China consiguió sólo cuatro puestos entre los 50 primeros, cada vez son más las empresas que se acercan a las puertas del Top 50 y que entrarán en la lista en los próximos años, cuando empiecen a competir de manera más visible en los mercados globales.
Diversity, an engine for innovation
The fifty leading innovation companies tend to have greater diversity among their leadership teams, as the examples of Microsoft, Alibaba, Cisco, Philips and Novartis show. «When we talk about diversity and innovation, a chicken-and-egg dilemma seems to arise: which came first?» states Johann Harnoss, Associate Director of BCG and co-author of the report. “We have tried to answer this question using the data we have, dating back to 2005, and there is strong evidence to say that diversity is an engine for innovation, and not so much that innovation is the source that attracts diversity. ”
Bridging the gap in readiness is essential
This year’s analysis reflects a worrying gap in preparedness. On the positive side, 75% of companies cite innovation as one of their top three priorities (an increase of 10%, the largest year-on-year increase in the report’s three decades of history), and 60% intend to step up their investment in innovation, a third in more than 10%. However, 80% fall short of BCG’s benchmark for multi-dimensional readiness of its innovation systems. The report suggests that focusing efforts on two areas can help narrow this gap: increasing the degree of commitment from top management and creating a stronger bond between the product and sales teams.
BCG data corroborates that the commitment of managers is essential: among companies that outperform their competitors in innovative results (measured in proportion to the share of sales of new products and services), in 90% of cases the high Management shows strong commitment, compared to just 20% for the worst performing companies. Likewise, almost a third of the companies interviewed in the 2021 survey pointed out as their greatest impediment to achieving a better result in innovation, an ineffective collaboration between their R&D teams and their sales teams.
“CEOs are stepping up their companies’ efforts and investment, recognizing that the power of innovation to drive resilience and achieve competitive advantage is more important than ever,” reiterates Justin Manly, Managing Director and Partner at BCG and one of co-authors of the report. “However, we also see the risk that their hopes will not materialize due to their companies being unprepared. The good news is that most can radically improve their readiness with just a few focused changes to their strategy, the design of their operating model, and their organizational capabilities. «