A collection of Toyota hybrids from around the world.
When it comes to innovation, the spotlight usually shines on the high-tech world of Silicon Valley; automotive manufacturers, by comparison, are generally seen as technological dinosaurs. But a new study suggests that this conventional wisdom might need to be turned on its head.
Of the 20 most innovative companies named in a new study by the Boston Consulting Group, nine are carmakers – more than both the technology and telecom list for the first time since the 2005 study was released. And the number grows substantial — adding a few breakthrough names like Tesla — when looking at the Top 50 innovators.
“Innovate or die,” the study stresses, repeating what has become the mantra at many leading corporations. And BCG analysts said that is more than just a public relations ploy for the most successful companies, noting that the call for innovation is “backed up by investment, which has been rising significantly in recent years.”
Notably, even during the worst years of the Great Recession, the companies highlighted by the study continued to spend on R&D and new technologies. And in 2013, 85% of those identified as “strong innovators” plan to up their budgets compared to 2012. Only 39% of “weak innovators” plan to increase their budgets.
At the top of the chart, the new study names Apple the most innovative company of 2013, while arch-rival Samsung comes in second, with Google slipping one spot to third. Microsoft, now in the midst of a closely followed CEO search, took the fourth spot, but BCG put Toyota at number five.
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Two other automakers landed in the Top 10, eighth-ranked Ford, followed by BMW in ninth. GM surged from 29th last year to 13th in the BCG study, with Volkswagen close behind at 14. Honda took the 18th spot followed by VW’s Audi subsidiary at 19. Meanwhile, Daimler AG returned to the Top 20 list in 20th place.
Perhaps more significant was the fact that Tesla landed in 41st place, a significant achievement considering it only has one product on the market, the battery-powered Model S sedan. A total of 14 automakers were listed among the top 50 companies, only slightly behind the 16 tech and telecom firms.
(GM has big plans for battery lab. Click Here for the full story.)
BCG says the rankings were the result of a survey of 1,500 senior executives from companies around the world. Their rankings were supplemented, the consulting firm noted, by three financial measures:
- 3-year total shareholder returns;
- 3-year revenue growth; and
- 3-year margin growth.
Considering that innovation in the auto industry traditional had more to do with oil, grease and steel than silicon and touchscreens, how did so many automakers suddenly land on the list of innovative leaders?
The report points to several factors. There is, of course, the rising focus on infotainment and other “advanced electronic and entertainment systems.”
(VW goes electric. Click Here to find out what that means for its future products.)
There is the push to meet tough new mileage and emissions mandates. That, in turn, has led to the development of new materials, more efficient conventional powertrains and even more advanced battery-based drive systems. And then there’s the push for high-tech safety systems which, some makers now promise, will lead to the first fully autonomous automobiles by decade’s end.
(Automakers “democratize” technology by moving luxury advancements into mainstream products. For more, Click Here.)