To say the least, this year has been challenging for brands and businesses all over the world for many reasons (transformation obstacles, talent retention, CX, shifts in loyalty patterns, data-management issues, etc.) and the unsteady economy has compounded those challenges—like most other functions, communicators are facing tighter budgets, as well as greater demand for ROI, clearer revenue generation, and more substantial leads—the list goes on and on.
Now, with a potential recession looming on the horizon, business leaders are seeing more aggressive innovation as a critical strategic focus, and as perhaps the only way to fend off economic vulnerability. New research from Boston Consulting Group (BCG) finds that innovation has emerged as a top corporate priority for 2023—79 percent of companies around the world see innovation as a top-three priority for this year and 66 percent plan to increase spending, and 42 percent plan to do so by more than 10 percent. This is a considerably higher priority compared to the last downturn in 2009, when fewer than two-thirds of companies ranked innovation as a top-three priority and only 58 percent planned to increase spending.
In its 17th “Most Innovative Companies” report, Reaching New Heights in Uncertain Times, BCG examines how leading companies are raising their commitment to innovation, and how innovation is building their resilience to economic uncertainty.
“The connection between innovation, growth, and advantage is stronger than ever,” said Justin Manly, a BCG managing director and partner and a coauthor of the report, in a news release. “The companies that both prioritize innovation and make sure that they are ready to act will continue to widen their lead and deliver outsized returns.”
The 50 Most Innovative Companies of 2023
Despite the market headwinds that they experienced in 2022, tech companies continue to dominate the top 50, including five of the top ten slots. For the third consecutive year, Apple holds the top spot on the list. Tesla climbs three positions to second place, and Amazon remains at third. Nine new companies join the top 50. In addition, international energy companies hold five spots, possibly reflecting survey respondents’ concerns over climate change and the fact that they’re looking to the energy industry to be a creative part of the solution.
The 50 most innovative companies for 2023 are a geographically diverse group, roughly evenly split between North America and the rest of the world. Europe and Asia are well represented, and the Middle East joins the list for the first time.
The new report also underscores the role innovation plays in driving performance: Since 2005, BCG’s portfolio of the 50 most innovative companies has outpaced the broader market in shareholder returns by a significant margin—an average of 3.3 percentage points per year.
Companies are investing in AI more than any other technology
As we know, AI is transforming business operations this year, and is rapidly expanding innovation possibilities—and companies’ investment priorities reflect this: 61 percent of companies are investing in AI and machine learning this year, which is 15 percentage points higher than robotics and process automation, the second most attractive technology for investment selected by survey respondents.
However, while 83 percent of these firms have systematically implemented AI to support innovation in one or more use cases, only 45 percent have managed to translate this into business impact.
Those select companies that ultimately realize impact from AI become idea-generation powerhouses. They generate more than five times as many ideas than others and incubate more than twice as many minimum viable products.
“The best innovators develop a self-reinforcing, virtuous cycle. AI is a great example of this—more ideas means greater likelihood of finding the best use cases for AI, and implementing AI helps generate more ideas,” said Michael Ringel, a BCG managing director and senior partner and a coauthor of the report, in the release. “Once the innovation cycle starts, it creates its own momentum and produces transformative competitive advantage.”
The report draws on the firm’s annual survey of more than 1,000 global executives on innovation trends and its global innovation performance database of more than 1,000 companies.