The World's 50 Most Innovative Companies

These firms set the pace when it comes to generating new growth ideas

Last Updated: Oct 25, 2012, 06:40 IST7 min

1.&enspSalesforce.comInnovation premium:&ensp73% US(Software)Sales growth¹: &ensp37.7%Return²:&ensp29.7%In salesforce.com’s 13-year history, founder and CEO Marc Benioff has taken pride in innovating from within. That’s how he pressed for the release of Chatter, Salesforce’s Facebook-like tool for businesses. But this year, he’s spent $1 billion, the most ever, acquiring two firms: Radian6 and Buddy Media. “We couldn’t afford to wait,” says Benioff. These deals form the backbone of a new division within Salesforce, The Marketing Cloud, which will help brands know what is being said about them on social networks and then tailor messages to those audiences. Buddy Media places 10 percent of all ads on Facebook. Benioff has acquired 24 firms in all, and admits not all have succeeded. He is okay with failure, because that’s part of risk-taking. Everyone learns something along the way: “Innovation is a continuum. You have to think about how the world is evolving and transforming. Are you part of the continuum?”

2. Alexion PharmaceuticalsInnovation premium:&ensp72.3% US(Biotech)Sales growth: &ensp46.5%Return: &ensp47.6%Its anaemia drug Soliris will gross $1.1 billion in revenue this year. Shares have outperformed Apple since 2007.

3.&enspAmazon.com

Innovation premium: &ensp58.3% US(Internet retail)Sales growth: &ensp34.9%Return: &ensp26.3%Has more than 20 million products in stock, and thousands of startups depend on its cloud computing services. Founder Jeff Bezos tops Forbes’ list of America’s best CEOs.

4.&enspRed HatInnovation premium: &ensp58.1% US(Software)Sales growth: &ensp22.6%Return: &ensp23.9%Open-source software maker passed $1 billion in revenue last year. Its CEO, Jim Whitehurst, likens open-source to American Idol. Both “are successful because the people choose”.

5.&enspBaidu Image: Reuters

Innovation premium: &ensp57.6% China(Computer services)Sales growth: &ensp73.9%Return: &ensp50%China’s leading search engine is also the fifth most visited site in the world.

6.&enspIntuitive Surgical Innovation premium: &ensp54% US(Medical equipment)Sales growth: &ensp27.6%Return: &ensp20.8%Its ergonomic da Vinci surgical robots allow a doctor to watch a live, high-resolution feed of a patient’s insides and operate through a one- to two-centimetre-wide incision. Some 2,300 of the machines are installed in hospitals worldwide.

7.&enspRakutenInnovation premium: &ensp51.5% Japan(Internet retail)Sales growth: &ensp18.3%Return: &ensp25.8%The world’s No. 3 e-commerce firm owns a big stake in hot social network Pinterest. Its billionaire CEO, Hiroshi Mikitani, has a brash goal: Beat Amazon.

8.&enspEdwards LifesciencesInnovation premium: &ensp46.9% US(Medical equipment)Sales growth: &ensp13.1%Return: &ensp33.7%Invented the artificial heart valve in 1960. Valve replacements are now one of the most common cardiac surgeries in the US.

9.&enspLarsen & ToubroInnovation premium: &ensp46.1% India(Engineering services)Sales growth:&ensp 19%Return: &ensp-0.5%India’s largest engineering firm builds ships, railroads, highways and bridges. Set to sell Toshiba’s plastics machinery business.

10.&enspARM Holdings Innovation premium: &ensp45.4% UK(Semiconductors)Sales growth: &ensp16.9%Return: &ensp27.3%Designs the microprocessors in the majority of the world’s smartphones and tablets, and by 2015 may run a quarter of all notebook PCs.

11.&enspTencent HoldingsInnovation premium: &ensp44.1% China(Computer services)Sales growth: &ensp55.8%Return: &ensp53%Chinese internet and gaming giant bought a minority stake in Epic Games earlier this summer. The Gears of War and Infinity Blade maker is the company’s second US purchase.

12.&enspHindustan UnileverInnovation premium: &ensp43.9% India(Household/personal care)Sales growth: &ensp11.4%Return: &ensp17%Enlists poor women and men in rural areas to sell door-to-door, creating the Indian equivalent of an army of Avon ladies.

13.&enspFMC TechnologiesInnovation premium: &ensp40.7% US(Oil & Gas Equipment/Services)Sales growth:&ensp 29.8%Return: &ensp18.4%Its high-pressure fluid control equipment allows subsea offshore drillers to separate oil, gas, sand and water.

14.&enspCernerInnovation premium: &ensp39.2% US(Health care services)Sales growth: &ensp24.6%Return: &ensp20.3%Its servers handle 150 million health care transactions a day, roughly one-third of the patient data for the entire US.

15.&enspPernod RicardInnovation premium: &ensp39% France(Beverages)Sales growth: &ensp7.9%Return: &ensp4.3%Owns 36 brands, including icons Absolut and Chivas Regal. In June hosted its second all-hands event to promote moderate drinking.

16.&enspMonsantoInnovation premium: &ensp38.6% US(Chemicals)Sales growth: &ensp18.6%Return: &ensp8.3%Produces genetically modified soybean, cotton and corn seed that make their own insecticide.

17.&enspPerrigoInnovation premium: &ensp38.3% US(Pharmaceuticals)Sales growth:&ensp 15.2%Return: &ensp38.3%World’s largest maker of private-label over-the-counter cures also has thriving generic prescription business.

18.&enspKweichow Moutai Image: Getty Images

Innovation premium:&ensp 37.9% China(Beverages)Sales growth: &ensp56.2%Return: &ensp18.6%State-owned enterprise produces a sorghum-based premium hard liquor. Stock up 40-fold from its IPO 11 years ago, with strong sales at home and abroad.

19.&enspInfosysInnovation premium: &ensp37.7% India(Computer services)Sales growth: &ensp12.7%Return: &ensp0.4%Offers consulting, software development and outsourcing services. Facing probe by Justice Department into visa fraud allegations.

20.&enspWuliangye YibinInnovation premium: &ensp37.6% China(Beverages)Sales growth: &ensp36.5 %Return:&ensp 5.9%Profits are up 50 percent from a year ago, and the 600-year-old Wuliangye brand will soon have an airport in Yibin City named after it.

21.&enspStarbucksInnovation premium: &ensp37% US(Restaurants)Sales growth: &ensp12.7%Return:&ensp 13.4%Now has nearly 18,000 stores in 59 countries, including Morocco. Stock up 161 percent since return of CEO Howard Schultz in 2008.

22.&enspNidecInnovation premium: &ensp36.1% Japan(Electrical equipment)Sales growth:&ensp 3.4%Return: &ensp7.2%World’s largest hard-disk-drive spindle-motor manufacturer, with 80 percent global market share.

23.&enspEstee Lauder Cos.

Innovation premium: &ensp36% US(Household/personal care)Sales growth: &ensp10.3%Return: &ensp26.6%Its high-end beauty products are virtually recession-proof. Earnings up 25% last quarter.

24.&enspGoogleInnovation premium: &ensp35.9% US(Computer services)Sales growth: &ensp29.5%Return: &ensp6.2%Search giant debuted its first tablet, Nexus 7, in July to compete with Kindle and iPad. Continuing to map every corner of the globe. Acquired Motorola Mobility to advance its ubiquitous Android mobile operating system.

25.&enspDanoneInnovation premium: &ensp35.8% France(Food)Sales growth: &ensp7.8%Return: &ensp0.3%Reviving yogurt’s origins as a health food and selling it in sleek new rounded plastic pots.

26.&enspAppleInnovation premium: &ensp35.7% US(Computer hardware)Sales growth: &ensp48.3%Return: &ensp39.7%World’s most valuable company launched the iPhone 5, is expected to launch a new TV set.

27.&enspProcter & GambleInnovation premium: &ensp35.3% US(Household/personal care)Sales growth: &ensp2.3%Return: &ensp3.5%Megabrands include Gillette, Cover Girl, Downy. Sold its last food-related brand, Pringles, to Kellogg in February.

28.&enspEssilor InternationalInnovation premium: &ensp35.2% France(Medical equipment)Sales growth: &ensp7.7%Return: &ensp9.5%Optics titan drives vans across India to bring $5 glasses to the myopic masses.

29.&enspTata Consultancy ServicesInnovation premium: &ensp35.1% India(Computer services)Sales growth: &ensp19.5%Return:&ensp 14.6%India’s largest IT services firm added 40,000 employees in the past year and boasts a workforce that’s 32 percent women.

30.&enspReckitt Benckiser groupInnovation premium: &ensp34.5% UK(Household/personal care)Sales growth: &ensp5.4%Return:&ensp 5%British firm’s diverse brands include Clearasil, French’s mustard and Durex condoms.

31.&enspEcolabInnovation premium: &ensp34.1% US(Chemicals)Sales growth:&ensp 47.2%Return:&ensp 11.9%Provides technology and services for clean water and hygiene to the hospitality, food service and health care industries.

32.&enspKeyenceInnovation premium: &ensp34% Japan(Electronics)Sales growth: &ensp12.1%Return: &ensp8.5%Makes sensors, bar code readers, microscopes. New products account for 20 percent of sales.

33.&enspDiageoInnovation premium: &ensp33.9% UK(Beverages)Sales growth: &ensp1.6%Return: &ensp9.7%Brands include Johnnie Walker, Ketel One, Guinness. Plans to invest $1.5 billion in scotch whisky production over the next 5 years.

34.&enspL’OréalInnovation premium: &ensp33.6% France(Household/personal care)Sales growth:&ensp 4.3%Return: &ensp4.1%Registered 613 patents in 2011. Recycles or reuses 96 percent of its waste for energy.

35.&enspHersheyInnovation premium: &ensp33.2% US(Food)Sales growth: &ensp7.1%Return: &ensp12.4%118-year-old maker of Almond Joy, Twizzlers continues to make Kisses in Hershey, Pennsylvannia.

36.&enspBeiersdorfInnovation premium: &ensp33% Germany(Household/personal care)Sales growth: &ensp1.1%Return:&ensp 2.7%Boasts ultra-modern Hamburg skin research centre with 450 scientists.

37.&enspColgate-PalmoliveInnovation premium: &ensp32.7% US(Household/personal care)Sales growth:&ensp 5.7%Return: &ensp12.2%Its products take care of home, oral hygiene, pets and body odour. Roots date back to early 1800s. Sells in 200 countries.

38.&enspSun Pharmaceutical IndustriesInnovation premium: &ensp32.7% India(Pharmaceuticals)Sales growth: &ensp34.6%Return: &ensp22.2%India’s most valuable drug firm acquired Israeli subsidiary Taro Pharma and named former head of Israel’s Teva as chairman.

39.&enspCitrix SystemsInnovation premium: &ensp32.3% US(Software)Sales growth:&ensp 18.1%Return: &ensp19%Provides tools for networking, desktop virtualisation and cloud computing.

40.&enspDassault SystèmesInnovation premium: &ensp31.9% France(Software)Sales growth: &ensp9.9%Return: &ensp12.3%Its powerful 3D design software used by BMW, Boeing, Ford, Guess, GE and Honda.

41.&enspTechnipInnovation premium: &ensp31.8% France(Oil & gas equipment/services)Sales growth: &ensp15.9%Return:&ensp 12.4%Operates fleet of specialised vessels for pipeline installation and subsea construction.

42.&enspKoneInnovation premium: &ensp31.6% Finland(Engineering services)Sales growth: &ensp9.9%Return: &ensp18.9%Services more than 850,000 elevators and escalators globally.

43.&enspFanucInnovation premium: &ensp31.1% Japan(Industrial machinery)Sales growth: &ensp20.4%Return: &ensp14%Reached records in sales and earnings for its factory robots. Seeing strong China demand.

44.&enspSchlumbergerInnovation premium: &ensp31% Netherlands(Oil & gas equipment/services)Sales growth: &ensp23.4%Return:&ensp -2.1%Employs 115,000 people in 85 countries.

45.&enspNintendo Innovation premium: &ensp31% Japan(Software)Sales growth: &ensp-26.7%Return: &ensp-21.2%Its Nintendo 3DS was used in the Louvre as an offciial digital audio guide. Plans to launch New Wii U system later in 2012.

46.&enspPraxairInnovation premium: &ensp30.7% US(Chemicals)Sales growth: &ensp5.8%Return: &ensp10.4%Customers use its speciality gases and coatings to preserve food and make computer chips.

47.&enspSynthes3Innovation premium &ensp30.7% Switzerland(Medical equipment)Sales growth: &ensp7.8%Return: &ensp8.9%Makes metal discs that fit into spinal columns. Founder is on Forbes’ billionaires list.

48.&enspYum! BrandsInnovation premium:&ensp 30.3% US(Restaurants)Sales growth: &ensp14%Return: &ensp18.6%Owns Kentucky Fried Chicken, Taco Bell, Pizza Hut. Has 30,000 stores in 120 nations.

49.&enspCSLInnovation premium: &ensp29.2% Australia(Biotech)Sales growth: &ensp-6%Return: &ensp15.7%Makes plasma products used to treat infections and autoimmune diseases.

50.&enspGeneral MillsInnovation premium: &ensp28.8% US(Food)Sales growth: &ensp11.9%Return: &ensp9.9%Brands include Wheaties, Pillsbury, Green Giant. International sales are 30 percent of total, up from 10 percent in 2002.

All figures in US dollars. Total returns as of August 17. The innovation premium is a measure of how much investors have bid up the stock price of a company above the value of its existing business based on expectations of future innovative results (new products, services and markets). Members of the list must have $10 billion in market capitalisation, spend at least 2.5 percent of revenue on R&D and have seven years of public data.

1. Latest 12 months.2. 5-year annualised total return.3. Acquired by Johnson & Johnson in June.

Sources: Holt, a division of Credit Suisse, in collaboration with Innovator’s DNA LLC Interactive Data, Thomson Reuters Fundamentals and Worldscope via Factset Research Systems Bloomberg.

First Published: Oct 25, 2012, 06:40

Justice DepartmentMarc Benioff