The most innovative companies in 2023

This article is based on the results of BCG's (The Boston Consulting Group) global innovation survey, The 50 Most Innovative Companies. This annual report helps us to understand the new sources of innovation, define the challenges of the moment and identify the most innovative companies among large corporations. After reading the report, it's clear that the leaders in innovation share a number of common characteristics. Thanks to these attributes, these companies are able to exploit innovation more rapidly, better withstand macroeconomic disruptions, achieve better operational performance and, ultimately, create more value for shareholders. Corporate culture has a lot to do with this. This is what we're going to see.

The formula for innovation in large companies

Despite global economic uncertainty, innovation has become one of the top priorities for companies in 2023. 79% of them rank it among their top three objectives. The main areas of innovation are the creation of new products and the exploration of new business models. 42% of companies plan to significantly increase their spending on innovation in 2023. This represents a spectacular leap of 16 points compared to the last economic recession in 2009.

Source: BCG

So, even in this tense macroeconomic environment, companies are convinced that innovation is one of their best ways out. Indeed, companies that prioritize innovation and ensure they are ready to act in the face of change are widening the gap with their less successful competitors. These change-makers launch new products, conquer new markets and seek new sources of revenue. Those who lag behind in the innovation race, those who simply follow the changes at a snail's pace, struggle to compete.

Innovation requires three essential things to be in place: making innovation a priority, devoting investment and talent to it, and being prepared to turn investment into results. According to BCG, only one in four companies is truly ready for innovation, i.e. it validates these three criteria. These companies are much more aggressive in their M&A (mergers and acquisitions) strategy, targeting innovative technologies or processes, or surrounding themselves with managers and employees who have demonstrated their ability to innovate.

The 2023 ranking

When we look at the 2023 ranking of the 50 most innovative companies, we once again find many technology stocks. The top ten are Apple, Tesla, Amazon, Alphabet, Microsoft, Moderna, Samsung, Huawei, Byd Company and Siemens. New entrants include BioNTech, Schneider Electric, Honeywell, Sinopec, Glencore, Stripe, Saudi Aramco, PetroChina and NTT.

Source: BCG

Better stock market performance

Since 2005, an equally-weighted portfolio of BCG's 50 most innovative companies, updated annually with the new ranking (BCG MIC 50), has outperformed the market (MSCI World index). This outperformance of 3.3% per year is not insignificant for a long-term investment.

Source: BCG

The most innovative companies develop superior capabilities that are often sustainable. Indeed, even if technologies evolve rapidly, mastery of a technology such as AI enables a company to rapidly deploy its solutions, whereas few entities are really taking advantage of this market at present. As a result, they are taking most of the market share. This is the case of Nvidia, for example. Secondly, these companies benefit from a snowball effect: they can invent, deploy, adapt and reinvest more rapidly with the profits generated.