NEW YORK: For the fourth year running Apple and Google have topped the list of global innovators compiled by management consulting firm Booz & Co.
The firm's ninth Global Innovation 1000 study saw some changes below the top two companies, with 3M slipping from third to fifth to be replaced by Samsung and Amazon, climbing six places to fourth. Facebook reappeared in the top ten in tenth spot. Tesla was a new entrant at nine. GE (6th), Microsoft (7th) and IBM (8th) rounded out the top rankings.
The study also found that that yearly R&D spending among the world's 1,000 largest public corporate R&D spenders had reached a record level of $638bn. But it noted that higher spending was no guarantee of greater returns, as the ten most innovative companies had financially outperformed the world's top spenders, despite actually putting significantly less into R&D.
"You can't buy your way to the top," said Barry Jaruzelski, senior partner at Booz & Company. "When it comes to innovation, how you spend is much more important than how much you spend."
The nature of the business may also be a factor as the list of top spenders was dominated by auto and healthcare companies. Overall these two industries, along with computers and electronics, accounted for 65% of global total R&D spend.
The report found a 22% increase in R&D spending among software and internet companies. This was "likely driven by an increasing demand for digital products and services, creating more opportunities for cutting edge innovation," said Richard Holman, a partner at Booz & Company and coauthor of the study.
Across the board, companies were spending 8.1% of their R&D budgets on digital tools to enable their innovation process, either to boost productivity or to improve their ability to gain better insight into customer needs.
Productivity enablers included such things as rapid prototyping/3D printing, which were found to be the most effective tool for the ideation phase of the innovation process, simulation tools, and project management tools.
Market and customer insight enablers included discussion platforms, monitoring tools, and usage monitoring sensors.
John Loehr, partner at Booz & Company and global leader of the firm's Innovation practice, said that newer tools such as big data, usage sensors, and social voting were "beginning to prove their value in multiple industries".
He conceded it was a risk investing in these but added it was one everyone would have to take if they were to stay at the forefront of innovation.
Data sourced from Booz & Company; additional content by Warc staff