The 50 Most Innovative Companies (2010)

Since 2005, Bloomberg Business Week has published a table each year displaying the ‘50 Most Innovative Companies’. The data is gathered by Boston Consulting Group (BCG). The consultancy gathers this data using various techniques. In December 2009, senior executives were emailed around the world asking which companies, in their view, were the most innovative operating outside their industry. With this data, BCG then took consideration of the financial performance for these highly ranked companies. For the final list, survey results account for 80%, 10% from stock returns and 5% for 3 year returns, as well as margin growth.

For the 2010 report, the survey distribution strategy was altered to improve the reflection of each country's share in the world economy; decreasing or increasing the number of questionnaires sent to different countries. The survey was also translated into different languages in an attempt to increase the response rate leading to more representable data.

It seems to be the case that Asian companies are becoming more established in the global market and significantly increase their market share as “In the past decade, as the U.S. was losing an estimated 2.4 million factory jobs to China” (Bloomberg Business Week [online], Accessed: 9/11/11).

As found in the 2010 Bloomberg Business Week report, 15 of the Top 50 are Asian; a significant increase from the figure in 2006 of five. This is evident today where China are trying to export technologies such as wind turbines and high-speed bullet trains to the United States. However, despite the number of companies from outside the US appearing in the Top 25 of the 2010 table, Apple remains number one (as it has done for the past 5 years) with Google as runner-up; firmly representing America.

With an increased amount of Asian companies claiming spots in the Top 25, many other companies from the US and Britain have been pushed further down the table; some even wiped off completely (AT&T).

HTC, a recently well known Asian smartphone brand, was founded in 1997 and produced its first phone using Google’s Android software in 2008. In January 2010, it launched the Nexus One which was the start of many smartphone innovations for the company. HTC is now selling its own smartphones and “roughly a quarter of the company's 8,000-person workforce hold engineering-related jobs” (Bloomberg Business Week [online], Accessed: 9/11/11). This reflects the demand and supply for their products and how they have expanded since being founded. HTC Chief Executive, Peter Chou, believes that “Innovation is not a one-time job—innovation is a journey” (Bloomberg Business Week [online], Accessed: 9/11/11). We are likely to see many more innovative products from this company in years to come – will they ever be able to compete with the likes of Apple? An unanswered question.

As China suffers from its highly polluted air filling the environment, the government is willing to promote the use of eco-friendly cars; helping to make this a viable venture. In addition, the government is also encouraging overall generation in the country. “Beijing has implemented new procurement policies to promote what it calls "indigenous innovation" by requiring locally made technology in certain government purchases” (Bloomberg Business Week [online], Accessed: 9/11/11).

According to statistics, 95% of executives in China said innovation was the key to economic growth compared to 90% in South America and 89% in India. In the U.S., only 72% said innovation was important.

As the recession presses on with tough economic conditions and squeezed budgets, many countries are suffering to finance their innovations; possibly explaining why the innovation budget of the US has fallen to 48%. However, 88% of China executives, 82% in South America and 73% in India said they were raising their innovation budgets this year. In Japan, only 34% of executives aimed to increased their innovation spending. This lack of innovation by the US could be detrimental to their future place in the Innovative Companies table.

Many critics believe that:

“China, Korea, and India aren't all that innovative. Their domestic economies are growing so quickly—and there are so many opportunities to launch tried-and-true business models—that these companies don't need to come up with the Next Big Thing. Sticking with the Same Old Thing suits many companies and investors just fine” (Bloomberg Business Week [online], Accessed: 9/11/11).

There’s no doubt that the recession has been very tough for companies to survive within; especially due to the unstable and unpredictable market conditions; “72% of companies see innovation as a "top three" strategic priority, and 61% of respondents are planning to increase the amount they spend on innovation” (Bloomberg Business Week [online], Accessed: 9/11/11).

For many companies, priorities have shifted whereby innovation has become the lowest priority than it has done so far as focus is now aimed at cost-reduction, increasing productivity and incremental changes (rather than radical).

References:

Bloomberg Business Week [online], Available from: http://www.businessweek.com/interactive_reports/innovative_companies_2010.html, Accessed: 9^th November 2011

Bloomberg Business Week [online], Available from: http://www.businessweek.com/magazine/content/10_17/b4175034779697.htm, Accessed: 9^th November 2011

Bloomberg Business Week [online], Available from: http://www.businessweek.com/magazine/content/10_17/b4175043789498.htm, Accessed: 9^th November 2011 

An insight into the life of a great innovator; Steve Jobs

Steve Jobs shook up the industry. He changed the world.

R.I.P

February 24, 1955 – October 5, 2011

The life of Steve Jobs wasn’t all fame, success and profit. Channel 4's programme (Steve Jobs: iChanged the World) was shown on 2nd November 2011 and gave a unique insight into the life of one of America's most successful innovators and entrepreneurs. The programme explained how Jobs went from being a college drop out to one of the wealthiest and successful men in the world.

He’s frequently been called the genius of modern age providing us with products that have improved our lives, made communicating easier and inspired a new generation. Despite his highly complex developments, Apple’s products require no manual due to their consumer friendly nature.

In an exclusive interview from 1994, it was clear that Jobs wanted to make a difference describing that everything in the World is made by people no smarter than you so you can change it and build your own things that people can use.

His Apple adventure began in 8^th Grade when he became friends with Bill Fernandez and Woz (Steve Wozniak). They were all interested in engineering and electrics. Together, Jobs and Woz experienced their first venture; mimicking telephone router codes for free calls around the World. Computer prototypes were then created and were taken to Homebrew Computer Club when they attracted a lot of attention. This device was the first computer using a computer and a screen to read the data.

Jobs was the persuasive one and convinced Woz to set up in business together. They decided to take on an older but experienced partner; Ronald Wayne. He described Steve as being very business directed and serious. It was agreed following a proposal that Jobs and Woz would each own 45% whilst Wayne would own 10% as the tiebreaker if any disputes occurred. 10% investment in Apple today would equate to over $37bn. Ron was worried about working with them, finding it too stressful so handed back his share and walked away with no regrets. As a result, Robert Cringeley was then hired but paid in stock due to the little capital they had.

It wasn’t long until the second model of the Apple consumer friendly computer device was produced. Jobs used diverse influences to fuel his creativity, such as calligraphy courses. He dropped out of college and studied Buddhism in India; following his Hippy trail. People viewed him as an atypical teenager for his age; asking more serious questions than the average 20 year old. He wanted to understand the true nature of things (known as Zen) which was incorporated into his later products.

In 1979, he teamed up with Xerox Technology to create an improved version of a prototype mouse. If Steve wanted to make it happen, his team had to innovate. This involved a trip to the local chemist to buy some roll on deodorant (acting as the ball) and a local supermarket to purchase a butter dish (acting as the structure).

Great influence, rival and friend, Bill Gates, was a great influence to Steve Jobs. They had been partners for a very long time – Apple’s first two computers used Microsoft software and despite their friendship, there was deeply routed rivalry. By the mid 1980s, at the age of 29, Steve Jobs was one of the richest self made men in America. Many close friends and colleagues have commented on his high enthusiasm about everything.

21 years old – worth $1m

22 years old – worth $10m

23 years old – worth $100m

…Not the life of an average 20 year old!

However, because of this, he knew nothing but success and as a result had huge ambition.

In 1985, John Scully was appointed (Pepsi’s Executive). Jobs trusted Scully but 2 years later, profits faulted and Steve left after a boardroom battle.

Steve soon found his feet again and starting to found a new company (Next) that specialised in educational computers which was heavily funded by Ross Perot. Jobs started with little hesitation, high motivation and was great at encouraging creativity and new ideas.

Jobs invested $5m capital in Pixar, taking 30% of the company and kept investing more and more taking more equity away from the employees because he didn’t want to be embarrassed by failure.

Richard Branson himself said that Steve Jobs was a very hands-on individual who wasn’t good at delegating or praising people but he was still a great success so he must have been doing something right! He knew how to move and how to market ideas; a key to success.

Soon enough, Apple wanted Steve Jobs back. They were in trouble and only he could fix it. It was almost dead and about 90 days away from bankruptcy. It was partly outside investment that saved Apple; Bill Gates came to the rescue with $150m. The public despised Gates and believe that if Apple were to win, Microsoft had to lose – but this wasn’t the case. Many believe that Steve Jobs became a better businessman due to his experience of failure which allowed him to learn from his mistakes. A brand new product was developed; the iMac. Steve took bigger risks and continuously innovated with his intuitive tastes.

Jobs successfully brought Apple back on track. He was at his peak of creative genius and the company was a great success.  His key to success was moving beyond the computer and broadening out its product range to other electronic devices. A vast amount of innovative products were released by Apple and at the age of 50, Steve Jobs was now worth $3.2bn.

Apple’s evolution into the world of music was a great success. Although iTunes killed off many music stores (including Virgin Megastores), half a million songs were being downloaded from this virtual music store on a daily basis and managed to change the lives of the recording artists themselves; including Black Eyed Peas.

However, news struck when Jobs was informed he had cancer. It was until this moment when Steve realised “Life is fragile”. From here, he withdrew himself from the public eye and only kept in contact with close friends and colleagues. After his liver transplant, he was very frail but still set himself a goal each day.

Jobs handed in his resignation letter to the Apple board on 24^th August 2011 with immediate affect; “I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come” (UK2 [online], Accessed 8/11/11). His succession plan named Tim Cook as the replacement CEO of Apple.

On Wednesday 5^th October 2011, the tragic death of Steve Jobs devastated the world.

He had the changed the way we live, communicate and interact.

He will never be forgotten.

Apple still lives on.

References:

Steve Jobs: iChanged the World (2011) [TV Broadcast] Channel 4, 2^nd November. 23:05 hrs.

UK2 [online], Available from: http://www.uk2.net/blog/steve-jobs-resigns-as-ceo-of-apple/, Steve Jobs Resigns as CEO of Apple, (Accessed: 8^th November 2011)