Apple tops BCG's innovation ranking for third consecutive year

22 June 2023 2 min. read

Apple ranked first for the third consecutive year in Boston Consulting Group’s annual list of the Most Innovative Companies.

Despite market headwinds that have resulted in significant layoffs at big tech firms, the technology industry continued to dominate BCG’s top 50, including five of the top 10 spots.

Tesla came in second place, jumping three positions from last year. Amazon and Alphabet remained at third and fourth place, respectively, while Microsoft dropped three spots to fifth place.

Nine companies joined the list for the first time, while five spots were occupied by energy firms as more oil and gas companies look to diversify into sustainable energy.

The top 50 innovative companies were roughly evenly split between North America and the rest of the world. A company from the Middle East (Saudi Aramco) breached the list for the first time.

Apple tops BCG's innovation ranking for third consecutive year

Since 2005, companies on the top 50 list have outpaced the broader market in shareholder returns by a margin of 3.3% per year.

Despite global economic uncertainty, the 17th annual report found that 79% of companies view innovation as a top-three priority for this year, and 66% plan to increase spending. In contrast, during the financial crisis downturn in 2009, fewer than two-thirds of companies ranked innovation as a top-three priority and only 58% planned to increase spending.

The top areas of innovation emphasis are new products and exploring adjacent business models. Cost is a key driver for 62% of respondents.

A small group of companies is going further in placing innovation at the center of their growth strategies – allocating fully one-third of spending toward developing breakthrough innovations. These “innovation-ready” firms make innovation a priority, commit investment and talent to it, and are ready to transform investment into results.

Such firms are more aggressive in M&A – targeting innovative technologies and acquiring leaders and employees with an ability to innovate. They are also likelier to engage with external partners on innovation and drive efforts toward new digital products, agile teaming, and improving insights. They also leverage the power of artificial intelligence.

AI is an attractive area to most companies, with 61% of firms investing in AI and machine learning this year – 15 points higher than robotic process automation in second place.

While 83% of firms have implemented AI to support one or more use cases, only 45% have translated this into business impact. Companies that realize impact from AI generate over five times as many ideas than others and incubate over double the amount of 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.