The Innovation Leaders for 2016/17 - Those organisations across 25 sectors that are making the most of their innovation activities and driving growth. This is the latest results from a 15 year research programme that looks at the top 1500 companies across 25 sectors and profiles the leader in each one.
As a core part of the research, Innovation Leaders tracks the link between innovation and share price growth. Year after year, the companies identified as being the most effective innovators outperform their peers and the market. Over the last 15 years average return of the Innovation Leaders portfolio has been 14.5% CAGR. In 2016, growth was 18.9% again significantly higher than the S&P500, NASDAQ and FTSE 100.
This year’s Innovation Leaders Index includes a number of consistent performers from previous years such as Amazon, Apple, Inditex, LEGO and Reckitt Benckiser as well as more recent entrants including Accenture, Boston Scientific, Delta Air Lines and Nvidia.
For more information see www.innovationleaders.org or contact research@innovationleaders.org or @innovationldrs on twitter
5. WWW.INNOVATIONLEADERS.ORG
InnovaDon
Leaders
idenDfies
the
companies
that
achieve
the
most
from
their
innovaDon
acDviDes
to
deliver
sustained
growth
§ 16th
year
of
research
§ Analysis
across
25
sectors
§ Global
view
of
>1500
firms
§ Profiles
the
leaders:
§ High
impact
results
§ Most
effecDve
innovators
§ Also
outperforms
the
market
§ 14.5%
CAGR
since
2002
7. WWW.INNOVATIONLEADERS.ORG
Across
the
leaders
for
2016/17
we
can
see
three
notable
trends
US
Dominance
§ 20
of
the
25
leaders
are
US
based
organisaDons
§ This
is
the
highest
single
country
concentraDon
since
the
research
began
§ European
presence,
down
50%,
should
be
raising
some
hard
quesDons
Partnerships
at
the
Fore
§ CollaboraDon
has
been
a
key
component
for
some
sectors
for
some
Dme
§ Today
it
is
increasingly
influenDal
across
the
board
§ Delivering
high
impact
change
requires
new
alliances
Big
Bets
§ Radical
approaches
are
core
to
several
organisaDons’
growth
strategies
§ Alphabet,
Amazon,
Apple,
Tesla
being
joined
by
Bank
of
America,
LEGO,
Nvidia
§ More
established
companies
making
major
future
growth
investment
bets
10. WWW.INNOVATIONLEADERS.ORG
Accenture
Linking
digital
and
management
consul;ng
to
drive
client
innova;on
2016
KEY
DATA
35%
Net
Income
Growth
6%
Revenue
Growth
289
US
Patents
11. WWW.INNOVATIONLEADERS.ORG
Adidas
Partnership
and
brand-‐led
innova;on
across
the
whole
product
porPolio
2016
KEY
DATA
48%
Gross
Margin
80%
Sales
-‐
New
Products
€150m
R&D
investment
12. WWW.INNOVATIONLEADERS.ORG
Adobe
Leading
the
digital
evolu;on
across
graphics
and
desktop
publishing
2016
KEY
DATA
22%
Revenue
Growth
$976m
R&D
Investment
356
US
Patents
13. WWW.INNOVATIONLEADERS.ORG
Alphabet
Using
significant,
rising
Google
income
to
place
many
big,
bold
bets
2016
KEY
DATA
20.3%
Revenue
Growth
19%
Net
Income
Growth
3389
US
Patents
14. WWW.INNOVATIONLEADERS.ORG
Amazon
Successful
expansion
from
retail
to
cloud
services
extending
into
AI
and
autonomy
2016
KEY
DATA
27.1%
Revenue
Growth
298%
Net
Income
Growth
1696
US
Patents
15. WWW.INNOVATIONLEADERS.ORG
Apple
World’s
most
valuable
company
is
refilling
its
pipeline
across
a
widening
porPolio
2016
KEY
DATA
$10.0bn
R&D
Investment
2535
US
Patents
215m
iPhone
sales
16. WWW.INNOVATIONLEADERS.ORG
Bank
of
America
Proac;ve
posi;oning
on
fin-‐tech
and
block-‐chain
inspiring
sector
disrup;on
2016
KEY
DATA
13%
Income
Growth
289
US
Patents
$2.2tn.
Assets
17. WWW.INNOVATIONLEADERS.ORG
Boeing
Matching
commercial
performance
with
advances
in
defence
and
space
2016
KEY
DATA
$4.6bn
R&D
Investment
1051
US
Patents
5.2%
Net
Profit
Margin
18. WWW.INNOVATIONLEADERS.ORG
Boston
Scien;fic
Growing
influence
across
medical
devices
via
partnerships
and
niche
market
focus
2016
KEY
DATA
$920m
R&D
Investment
492
US
Patents
12.2%
Revenue
Growth
19. WWW.INNOVATIONLEADERS.ORG
Cisco
Driving
growing
IoT
based
transforma;on
across
the
connected
economy
2016
KEY
DATA
$6.3bn
R&D
Investment
990
US
Patents
20%
Net
Income
Growth
20. WWW.INNOVATIONLEADERS.ORG
Delta
Air
Lines
Matching
new
seat
innova;on
with
more
process
and
experience
partnerships
2016
KEY
DATA
$4.4bn
Net
Income
318
Des;na;ons
4,804
Flights
per
day
21. WWW.INNOVATIONLEADERS.ORG
Dow
Chemical
Pervasive
front-‐runner
and
driving
force
developing
a
more
sustainable
industry
2016
KEY
DATA
545
US
Patents
$1.6bn.
R&D
Investment
103%
Net
Income
Growth
22. WWW.INNOVATIONLEADERS.ORG
FedEx
World’s
largest
fleet
adop;ng
greener
fuels
and
compe;ng
on
autonomy
2016
KEY
DATA
6.1%
Revenue
Growth
73%
Net
Income
Growth
12m
Daily
shipments
23. WWW.INNOVATIONLEADERS.ORG
First
Solar
Pushing
integrated
system
adop;on
in
a
fast-‐growing
but
highly
compe;;ve
sector
2016
KEY
DATA
$131m
R&D
Investment
49
US
Patents
38%
Net
Income
Growth
24. WWW.INNOVATIONLEADERS.ORG
Humana
Advancing
digital
healthcare
to
increase
engagement
and
reduce
costs
2016
KEY
DATA
12%
Revenue
Growth
11%
Net
Income
Growth
Growing
Patent
PorPolio
25. WWW.INNOVATIONLEADERS.ORG
Inditex
Sustained
innova;on
op;mising
global
mul;-‐brand,
fast
fashion
2016
KEY
DATA
11%
CAGR
Revenue
9%
EBIT
Growth
250
Store
Openings
26. WWW.INNOVATIONLEADERS.ORG
KT
Corpora;on
Deep
collabora;on
driving
adop;on
of
next
genera;on
technology
plaPorms
2016
KEY
DATA
184bn
KRW
R&D
Spend
553bn
KRW
Net
Income
108
US
Patents
27. WWW.INNOVATIONLEADERS.ORG
LEGO
World’s
most
valuable
brand
exploring
and
delivering
the
future
of
play
2016
KEY
DATA
25.2%
Revenue
Growth
31%
Net
Income
Growth
109
Net
Promoter
Score
28. WWW.INNOVATIONLEADERS.ORG
Lilly
Strong
pivot
to
cancer
and
Alzheimer’s
bearing
fruit
alongside
the
tradi;onal
core
2016
KEY
DATA
$5.2bn
R&D
Investment
44
US
Patents
8.9%
Revenue
Growth
from
New
Products
29. WWW.INNOVATIONLEADERS.ORG
Marrioe
Major
hotel
firm
embracing
innova;on
as
source
of
guest
experience
differen;a;on
2016
KEY
DATA
Opened
55,000
Rooms
5.0%
Revenue
Growth
14%
Net
Income
Growth
30. WWW.INNOVATIONLEADERS.ORG
Nvidia
High-‐impact
expansion
from
processors
for
gaming
into
automo;ve
and
AI
2016
KEY
DATA
353
US
Patents
$1.3bn
R&D
Investment
7.0%
Revenue
Growth
31. WWW.INNOVATIONLEADERS.ORG
PepsiCo
Sustaining
“performance
with
purpose”
to
improve
resource
use
and
product
health
2016
KEY
DATA
9%
Growth
New
Products
$654m
R&D
Investment
16.3%
Fall
in
Net
Income
32. WWW.INNOVATIONLEADERS.ORG
Reckie
Benckiser
Non-‐stop
incremental
innovator
growing
globally
as
consumer
health
powerhouse
2016
KEY
DATA
11.1%
Revenue
Growth
60.9%
Gross
Margin
5.1%
Net
Income
Growth
33. WWW.INNOVATIONLEADERS.ORG
Tesla
The
catalyst
for
change
across
the
automo;ve
industry
and
beyond
2016
KEY
DATA
$214m
R&D
Investment
81%
Revenue
Growth
373,000
Preorders
for
Model
3
34. WWW.INNOVATIONLEADERS.ORG
Xerox
Industry
pioneer,
regaining
leadership
through
focus
on
analy;cs
/
automa;on
2016
KEY
DATA
$476m
R&D
Investment
1227
US
patents
27.4%
Fall
in
Net
Income
36. WWW.INNOVATIONLEADERS.ORG
Back
in
1999,
exploring
growth
strategies
in
pharma,
we
wanted
to
know
who
were
the
most
effecDve
innovators?
1. “If
we
are
going
to
gain
more
more
from
organic
growth
then
which
companies
that
are
delivering
sustained
growth
are
the
most
effecDve
innovators
to
learn
from?”
2. “How
best
should
we
measure
innovaDon
performance?”
Company
InnovaDon
CapabiliDes
InnovaDon
Input
InnovaDon
Output
e.g.
$
R&D
Spend
e.g.
#
Patents
37. WWW.INNOVATIONLEADERS.ORG
But
if
we
wanted
to
know
who
is
the
most
effecDve
innovator
then
we
had
to
understand
key
raDos
of
output
to
input
Company
InnovaDon
CapabiliDes
InnovaDon
Input
InnovaDon
Output
InnovaDon
Input
InnovaDon
Output
39. WWW.INNOVATIONLEADERS.ORG
For
the
past
15
years
we
have
been
idenDfying
and
profiling
the
worlds
most
innovaDve
companies
across
25
sectors
This
published
analysis
has
consistently
idenDfied
organisaDons
that
subsequently
deliver
higher
organic
growth
40. WWW.INNOVATIONLEADERS.ORG
Most
now
recognize
that
innovaDon
can
both
take
many
different
forms
and
result
in
a
wide
range
of
varied
impacts
Product Innovation
Technological Innovation
Service Innovation
Process Innovation
Business Model Innovation
Many are looking for a correlation between effective innovation capability and sustained corporate growth
Increased Sales
Higher Margins
Enhanced Brand Value
Attractive Culture for Talent
New Ways of Working
Tangible
Intangible
Tradi.onal
Emerging
Types
of
Innova:on
Example
Innova:on
Impacts
41. WWW.INNOVATIONLEADERS.ORG
Our
model
analyses
the
1500
largest
companies
in
these
sectors
and
systemaDcally
selects
the
top
innovators
25
InnovaDon
Leaders
Single
company
for
each
sector
75
Companies
25
Sectors
1500
Companies
Largest
companies
across
25
sectors
25
most
innovaDon-‐
focused
sectors
Top
3
companies
per
sector
QuanDtaDve
Analysis
Throughout
Process
42. WWW.INNOVATIONLEADERS.ORG
The
annual
InnovaDon
Leaders
results
since
2002
have
been
published
in
books
and
via
the
innovaDon
leaders
website
Sector
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
Aerospace
Rolls Royce
Rolls Royce
Rolls Royce
Rolls Royce
Boeing
Rolls Royce
Rolls Royce
Honeywell
Rolls Royce
EADS
Honeywell
Airlines
Lufthansa
Air New Zealand
Air New Zealand
Virgin Atlantic
Virgin Atlantic
Virgin Atlantic
Virgin Atlantic
Virgin Atlantic
Singapore Airlines
Singapore Airlines
Singapore Airlines
Automotive
BMW
BMW
Renault
Tata Motors
BMW
Toyota
Toyota
Toyota
Honda
Honda
Honda
Chemicals
BASF
BASF
BASF
BASF
BASF
Dow
DSM
DSM
BASF
Dow
Dow
Consumer Electronics
Apple
Apple
Apple
Apple
Samsung
Electronics
Samsung
Electronics
Samsung
Electronics
Samsung
Electronics
Samsung
Electronics
Samsung
Electronics
Sony
Energy
Chevron
Shell
Chevron
Statoil
Shell
Shell
BP
BP
BP
BP
BP
Fashion Retail
Inditex
Inditex
Inditex
Inditex
HandM
H&M
H&M
H&M
H&M
H&M
Inditex
Food and Drink
Nestle
Nestle
Nestle
Nestle
PepsiCo
Nestle
PepsiCo
PepsiCo
Danone
Nestle
Nestle
General Retail
Amazon
Amazon
Amazon
Amazon
WalMart
Tesco
IKEA
Tesco
Tesco
Tesco
Tesco
Hotels and Leisure
Starwood
Starwood
Starwood
Starwood
Starwood
Starwood
Starwood
Starwood
Starwood
Starwood
Starwood
Household Goods
Reckitt Benckiser
Reckitt Benckiser
Reckitt Benckiser
Reckitt Benckiser
Reckitt Benckiser
Reckitt Benckiser
Reckitt Benckiser
Reckitt Benckiser
P&G
Kimberley Clark
P&G
Insurance
Humana
AON
Humana
Humana
Aviva
Allianz
Allianz
Allianz
AEGON
Prudential
Prudential
IT Hardware
ARM
ARM
ARM
ARM
Apple
Apple
Apple
Logitech
Apple
AMD
AMD
IT Services
IBM
Infosys
IBM
IBM
Infosys
IBM
Wipro
Infosys
IBM
Infosys
IBM
Logistics
UPS
UPS
UPS
UPS
UPS
UPS
UPS
UPS
Federal Express
Federal Express
Federal Express
Media and Entertainment
Google
Disney
Disney
Disney
Google
Google
Google
Time Warner
Disney
Disney
Disney
Medical Devices
Medtronic
Stryker
Stryker
St Jude Medical
Medtronic
Medtronic
Medtronic
Medtronic
Medtronic
Medtronic
Becton Dickenson
Office Products
Canon
Canon
Canon
Canon
Canon
Hewlett Packard
Canon
Canon
Hewlett Packard
Canon
Canon
Pharmaceuticals
Roche
Novo Nordisk
Novo Nordisk
Novo Nordisk
Lilly
Novartis
Novartis
Novo Nordisk
Novo Nordisk
Novo Nordisk
Merck
Retail Banking
ICICI Bank
Santander
Santander
Santander
Handelsbanken
Handelsbanken
Santander
RBS
HSBC
Bank of America
Bank of America
Software
Microsoft
Google
Google
Google
Microsoft
Microsoft
Microsoft
Microsoft
Adobe
Adobe
Adobe
Sports Goods
Nike
Nike
Nike
Nike
Adidas
Adidas
Adidas
Adidas
Nike
Nike
Nike
Telecom Equipment
Qualcomm
Juniper
Qualcomm
Qualcomm
Nokia
Nokia
Nokia
Nokia
Qualcomm
Qualcomm
Qualcomm
Telecom Operators
Bharti Airtel
Bharti Airtel
Bharti Airtel
Bharti Airtel
Telefonica
NTT DoCoMo
Vodafone
NTT DoCoMo
NTT DoCoMo
NTT DoCoMo
Vodafone
Toys and Games
LEGO
LEGO
LEGO
LEGO
LEGO
Nintendo
Nintendo
Nintendo
Nintendo
Nintendo
Nintendo
43. WWW.INNOVATIONLEADERS.ORG
The
annual
InnovaDon
Leaders
results
since
2002
have
been
published
in
books
and
via
the
innovaDon
leaders
website
Sector
2016
2015
2014
2013
Aerospace
Boeing
Boeing
Raytheon
Rolls
Royce
Airlines
Delta
Air
Lines
Delta
Air
Lines
Delta
Air
Lines
Delta
Air
Lines
AutomoDve
Tesla
Tesla
Tesla
Toyota
Chemicals
Dow
Chemical
Dow
Chemical
Dow
Chemical
BASF
Consumer
Electronics
Apple
Apple
Apple
Apple
Energy
First
Solar
First
Solar
Chevron
Chevron
Fashion
Retail
Inditex
Inditex
Inditex
Inditex
Food
and
Drink
PepsiCo
PepsiCo
PepsiCo
Nestle
General
Retail
Amazon
Amazon
Amazon
Amazon
Hotels
and
Leisure
Marriok
Starwood
Starwood
Starwood
Household
Goods
Reckik
Benckiser
Reckik
Benckiser
Colgate
Palmolive
Reckik
Benckiser
Insurance
Humana
Humana
Humana
Humana
IT
Hardware
Nvidia
Nvidia
ARM
ARM
IT
Services
Accenture
Accenture
IBM
IBM
LogisDcs
FedEx
UPS
FedEx
UPS
Media
and
Entertainment
Alphabet
Alphabet
Alphabet
Google
Medical
Devices
Boston
ScienDfic
Boston
ScienDfic
Smith
&
Nephew
St
Jude
Office
Products
Xerox
Xerox
Xerox
Xerox
PharmaceuDcals
Lilly
Novo
Nordisk
Novo
Nordisk
Merck
Retail
Banking
Bank
of
America
Bank
of
America
Bank
of
America
ICICI
Bank
Sooware
Adobe
Adobe
SAP
Adobe
Sports
Goods
Adidas
Adidas
Nike
Nike
Telecom
Equipment
Cisco
Broadcom
Broadcom
Qualcomm
Telecom
Operators
KT
CorporaDon
Verizon
Verizon
SK
Telecom
Toys
and
Games
LEGO
LEGO
LEGO
LEGO
45. WWW.INNOVATIONLEADERS.ORG
We
have
modeled
how
an
InnovaDon
Leaders
porrolio
would
have
performed
as
an
investment
fund
since
2002
Models
have
been
created
that
show
the
performance
of
a
fund
based
on:
§ InvesDng
in
the
most
innovaDve
company
per
sector
each
year
§ Making
the
investment
on
March
31
of
each
year
§ Holding
these
stocks
for
2
years
before
rebalancing
the
porrolio
§ ReinvesDng
all
capital
and
profits
at
then
end
of
each
2
year
hold
period
Key
assumpDons
made
in
the
modeling
include:
§ IniDally
equal
value
investments
in
all
companies
§ Independent
of
current
price
and
short-‐term
market
fluctuaDons
For the analysis stock selection we used only the published results of the innovation leaders analysis
46. WWW.INNOVATIONLEADERS.ORG
A
2012
back-‐test
of
the
InnovaDon
Leaders
against
S&P500
showed
clear
outperformance
over
the
previous
10
years
Compound
Annual
Growth
Rate:
14%,
Std
Dev:
20%,
Alpha:
12,
Beta:
0.74
47. WWW.INNOVATIONLEADERS.ORG
Throughout
the
years
a
porrolio
of
the
InnovaDon
Leaders
companies
has
consistently
out-‐performed
the
major
indices
Year
ILF
MSCI
ACWI
S&P500
NASDAQ
FTSE100
2002/3
(15%)
(20%)
(22%)
(28%)
(25%)
2003/4
37%
34%
29%
50%
14%
2004/5
31%
15%
11%
9%
8%
2005/6
15%
10%
5%
1%
17%
2006/7
26%
21%
16%
10%
11%
2007/8
25%
10%
5%
10%
4%
2008/9
(40%)
(40%)
(37%)
(41%)
(31%)
2009/10
54%
31%
26%
44%
22%
2010/11
31%
12%
15%
17%
9%
2011/12
1%
(5%)
2%
(2%)
(6%)
2012/13
21%
6%
9%
13%
0%
2013/14
22%
15%
19%
29%
3%
2014/15
18%
3%
10%
3%
3%
2015/16
15%
(8%)
(1%)
3%
(8%)