2018 Global Innovations 1000 PDF

October 2018
2018 Global
Innovation 1000
What the Top Innovators
Get Right
Introduction
What the Top Innovators Get Right
Innovation 1000 update
Strategy& | PwC 2018-Global-Innovation-1000-Fact-Pack.pptx 1

For the 14th year, Strategy& studied innovation trends and spending
at the world’s 1000 largest publicly listed corporate R&D spenders
2005: 2006: 2007: 2008: 2009: 2010: 2011:

Money isn't Smart The customer Beyond borders Profits down, How top Why culture
everything spenders connection spending steady innovators is key
keep winning
2012: 2013: 2014: 2015: 2016: 2017: 2018:

Making ideas Navigating the Proven paths to Innovation’s Software as a Will Stronger What the Top
work digital future innovation new world catalyst Borders Innovators Get
success order Weaken Right
Innovation?

The study has become a globally recognized contributor to better
understanding what drives innovation success
• The Global Innovation 1000 study has
Global Innovation 1000:
received significant media and academic
attention: Selected press coverage
– Called “the most comprehensive assessment
of the relationship between R&D investment
and corporate performance” by the
The Economist in 2009
– In 2018 awarded the National Gold Medal for

Best Web Feature Article and in 2011 & 2014,
awarded Gold National Medal for Original
Research by the American Society of
Business Press Editors (“the Azbee”)
– Given “2006 Special Achievement Award for

Advancing Innovation” by Innovate Forum
– In 2009 given “Best of Visions” award by

Product Development Management
Association
– Cited in more than 200 publications spanning

34 countries and 6 continents
Introduction

Executive Summary – High-leverage innovators
• This year we conducted an analysis to identify High-Leverage Innovators (HLIs) – companies from
our Top 1000 list that consistently outperform their industry peers across a basket of 7 measures of
financial success, but spend below their peers when it comes to R&D intensity
• The high-leverage innovator analysis was conducted across three 5-year periods ending in 2007,
2012, and 2017 where HLIs only made up less than 12% of the Top 1000 population each period
– 33 HLI companies appeared on 2 out of 3 HLI year lists
– Only 2 HLI companies – Apple & Stanley Black & Decker made the list all three times
– HLIs even more dramatically outperformed the rest of the Top 1000 during the 2007-2012
period, a period that included the Great Recession and initial recovery
• High-leverage innovators and the larger universe of companies that report comparatively high
performance vs. their peers share six key characteristics:
1. Close alignment of innovation and business strategy
2. Company-wide cultural support for innovation
3. Close involvement with innovation program by leadership
4. Deep understanding of insights from end-users
5. Rigorous approach to R&D project selection
6. Ability to integrate all of these things together to create a unique experience

Executive Summary – Update on Top 1000 companies
• In 2018 total R&D spending by the Global Innovation 1000 increased 11.4% to $781.8B
• R&D intensity remains at an all-time study high of 4.5%, with revenue for the 1000 companies
rising by 11.4% - driven by increase in sales across all industries
• Consumer overtook Software& Internet for the first time in 5 years as the fastest YoY growth
in R&D spending, up 26.3% this year while Software and Internet, the second fastest growth
industry for R&D spending grew 20.6%
• Healthcare companies are on track to become the biggest R&D spenders by 2020
• Computing & Electronics, Healthcare, and Auto contributed 60% of R&D spending in 2018,
slightly down from 2017
• Regionally, all regions saw an increase in R&D spend, most notably China up 34.4% and Europe up
14%, while North America and Japan saw single digit increases in R&D
• Amazon maintained the #1 spot in the top R&D spenders list for the second year in a row.
Sanofi and Siemens joined the Top 20 spenders since last appearing on it in 2015 and 2011
respectively
• Apple regained the top rank as the most innovative company from Alphabet. Netflix joined the
top 10 most innovative companies list for the first time
• Companies selected by survey respondents as the most innovative companies continue as a
group to outperform the top 20 R&D spenders
Note: Use of local currency would result in different YoY changes

Only two firms made the HLI list for the entire 15 years
Comparing the HLI companies over three 5-year periods – By # of HLI companies
• Adidas • Harris Corporation • Stanley Black &

• Advanced Semiconductor • Hewlett-Packard • Stryker
To view all HLI period
Engineering • Hexagon AB • Sysmex Corporation
lists, visit: What the Top
• Amazon.com • Hologic, Inc. • Taiwan
Innovators Get Right on
• Ametek • Hon Hai Precision Industry Semiconductor
s+b
• Amphenol • Hyosung Corporation Manufacturing
• AU Optronics • Hyundai Heavy Industries Company
• Chimei Innolux • IDEXX Laboratories Inc. • Teva Pharmaceutical
• Compal Communications • Ingenico Group Industries
229 • CSL Limited • Keyence Corporation
• Ecolab • LVMH
• Energizer Holdings • Newmont Mining
• Fresenius SE & Co • Reckitt Benckiser
• Garmin • Reynolds American
• Hankook Tire • Smith & Nephew
• Apple
• Stanley Black & Decker
33
HLIs that appeared once HLI companies that appeared HLI companies that
across all 3 HLI period lists* in 2 out of 3 HLI periods appeared in all 3 periods
*2007 – 118 HLI companies, 2012 – 95 HLI companies, 2017 – 88 HLI companies
Source: 2017 Global Innovation 1000 Study, 2012 Global Innovation 1000 Study, 2007 Global Innovation 1000 Study, Bloomberg data, Capital IQ data
We identified 88 high-leverage innovators in our 2017 Top 1000
Aerospace and Defense Computing and Electronics Healthcare

Company Name Region Company Name Region Company Name Region
Embraer S.A. ROW AAC Technologies Holdings Inc. China Cadila Healthcare Limited ROW
Automotive AMETEK, Inc. North America CSL Limited ROW
Company Name Region Apple Inc. North America Daewoong Co., Ltd. ROW
Burelle SA Europe Entegris, Inc. North America Essilor International Société

Anonyme Europe
Fiat Chrysler Automobiles N.V. Europe GN Store Nord A/S Europe
Fresenius SE & Co. KGaA Europe
Ford Otomotiv Sanayi A.S. ROW Hangzhou Hikvision Digital
Technology Co., Ltd. China Glenmark Pharmaceuticals Limited ROW
Geely Automobile Holdings Limited China
Hengtong Optic-electric Co., Ltd. China Grifols, S.A. Europe
Hanon Systems ROW
Ingenico Group - GCS Europe Hikma Pharmaceuticals PLC Europe
Subaru Corporation Japan
Jiangsu Zhongtian Technology Co. China Hologic, Inc. North America
Chemicals and Energy Keyence Corporation Japan Jazz Pharmaceuticals Public Limited
Company Name Region Company Europe
Leshi Internet Information &
Eastman Chemical Company North America Technology Corp., Beijing China Jiangsu Hengrui Medicine Co., Ltd. China
Ecolab Inc. North America Pegatron Corporation ROW Lupin Limited ROW
DIC Corporation Japan Siliconware Precision Industries Co., ROW Mallinckrodt Public Limited
Lonza Group Ltd Europe Company North America
Skyworks Solutions, Inc. North America
Medtronic plc Europe
Consumer Taiwan Semiconductor
Manufacturing Company Limited ROW Mylan N.V. North America
Company Name Region
ResMed Inc. North America
Adidas AG Europe
Santen Pharmaceutical Co., Ltd. Japan
Altria Group, Inc. North America
Shanghai Fosun Pharmaceutical
Amer Sports Corporation Europe (Group) Co., Ltd. China
LVMH Moët Hennessy Louis Vuitton Europe Sino Biopharmaceutical Limited China
Pou Chen Corporation ROW Sun Pharmaceutical Industries
Reynolds American Inc. North America Limited ROW
Sky plc Europe Sysmex Corporation Japan
Svenska Cellulosa Aktiebolaget SCA Europe *Thermo Fisher Scientific Inc. North America
Tyson Foods, Inc. North America Valeant Pharmaceuticals
Walgreens Boots Alliance, Inc. North America International, Inc. North America
Source: 2017 Global Innovation 1000 Study, Bloomberg data, Capital IQ data
…continued
Industrial Software and Internet
Company Name Region Company Name Region
ASSA ABLOY AB (publ) Europe Amadeus IT Group, S.A. Europe
Daikin Industries,Ltd. Japan NetEase, Inc. China
Dürr Aktiengesellschaft Europe Playtech plc Europe
HeidelbergCement AG Europe
SS&C Technologies Holdings, Inc. North America
Hexagon AB Europe
Tencent Holdings Limited China
Hyosung Corporation ROW
Zhejiang Dahua Technology Co.,
KION GROUP AG Europe China
Ltd.
KONE Oyj Europe
Kubota Corporation Japan
Telecoms
Obayashi Corporation Japan
Power Construction Corporation of Company Name Region
China Ltd. China AT&T Inc. North America
Schindler Holding AG Europe BCE Inc. North America
Sealed Air Corporation North America KDDI Corporation Japan
Shanghai Construction Group Co., SoftBank Group Corp. Japan
Ltd. China Apple and Stanley Black &
*Stanley Black & Decker, Inc. North America Decker were the only two
Sumitomo Heavy Industries, Ltd. Japan companies that appeared
Sunny Optical Technology (Group) on all three HLI list for the
Company Limited Europe study years: 2007, 2012,
Xinjiang GoldWind Science &
Technology Co., Ltd. China
and 2017
To explore the High-Leverage Innovators list further (including the HLI list for the
study years 2007 and 2012), visit https://www.strategy-business.com/topinnovators
Source: 2017 Global Innovation 1000 Study, Bloomberg data, Capital IQ data
High-Leverage Innovators outperform over a sustained period of
time on most performance metrics
2017 HLI companies: By Performance indices

Performance Index for HLI companies/Rest of Top 1000
3.0 2.9
2.5 2.6
2.5 2.4
2.1
2.0
1.5
1.1
1.0
1.0
0.5
0.0
Average Average Gross Profit Relative Total Operating Sales Growth Market
Operating Gross Margin Growth Shareholder Income Capitalization
Margin Return Growth Growth
Notes: 2017 – 88 HLI companies, 912 rest of Top 1000 companies

Source: 2017 Global Innovation 1000 study, Bloomberg data, Capital IQ data
HLI companies performed even better during the Great Recession
and first years of the recovery
Comparing performance indices (2007, 2012, and 2017 period)

Performance Index for HLI companies/Rest of Top 1000
14 13.4
12
10
8 7.0
6.6
6
4 3.7
2.7 2.5 2.4
2.1 2.2
2
0
Gross Profit Growth Operating Income Growth Relative Total Shareholder Return
Notes: 2007 – 118 HLI companies, 882 rest of Top 1000 companies, 2012 – 95 HLI companies, 905 rest of Top 1000 companies, 2017 – 88 HLI 2007 2017
companies, 912 rest of Top 1000 companies. In 2012, the 905 companies that did not make the HLI list saw very low TSR compared to the 95 HLI
companies. Gross Profit Growth, Operating Income Growth, and Relative TSR are the metrics shown here vs. all 7 due to the significant performance of 2012
HLI companies in 2012
Source: 2007 Global Innovation 1000 study, 2012 Global Innovation study, 2017 Global Innovation 1000 study, Bloomberg data, Capital IQ data
Faster growth companies have tighter alignment between their
innovation and business strategies
Alignment of innovation strategy with business strategy (by revenue growth type)
100.0% 100.0% 100.0%

100%
32.1%
54.0%
77.2%
43.6%
36.3%
18.0% 24.4%
4.8% 9.7%
Faster growth companies Same growth companies Slower growth companies
High alignment Medium alignment Low alignment

Source: 2018 Global Innovation 1000 Study
Faster growth companies see tighter alignment between their
culture and their innovation strategy
Alignment of company culture support of innovation strategy (by revenue growth type)
100.0% 100.0% 100.0%

100%
33.3%
52.5%
71.2%
32.1%
33.2%
20.9% 34.6%
14.3%
7.9%

Not only did faster revenue growth companies have high alignment
of business and innovation strategy, they were also more likely to
have high cultural support of innovation
Fast revenue growth companies Slow revenue growth companies

Cultural support of innovation x Alignment of Cultural support of innovation x Alignment of
business strategy to innovation strategy business strategy to innovation strategy
High
High
10.5%
23.7%
65.9%
Cultural support of
Cultural support of
6.5%
innovation
innovation
Moderate alignment High alignment
Moderate alignment High alignment
56.6%
15.9% 11.8%
9.2%
Low
Low
Low alignment Moderate alignment
Low alignment Moderate alignment
Low Alignment of Business Strategy High
Low Alignment of Business Strategy High
to Innovation Strategy
to Innovation Strategy
= represents the % of survey respondents that reported specific revenue growth type (fast, slow)

Need Seekers’ innovation strategies were almost twice as likely to
be highly aligned with their business strategies vs. other models
Alignment of innovation strategy with business strategy
Need Seekers Market Readers Technology Drivers
2%
15% 11%
14%
48%
53%
36%
37%
84%

Fast revenue growth companies see the most involvement of the
executive team with R&D investment and strategy
Involvement of executive team in R&D investment and strategy (by revenue growth type)
100.0% 100.0% 100.0%
52.6%
61.5%
77.5%
21.8%
29.3%
17.7% 25.6%
4.8% 9.2%
High alignment Medium Alignment Low alignment

Strategy& | PwC 2018-Global-Innovation-1000-Fact-Pack.pptx October 2018 16
All revenue growth type companies ranked deep customer insights
as the most important ideation capability
Top 3 ideation capabilities in terms of importance (By revenue growth type)
30%
28%
25% 25%
24%
22%
20%
19% 19%
b c d b c a b c d
Ideation capability coding for bar chart above:

a) Open innovation/capturing ideas at any point in the process from external sources
b) Deep consumer and customer insights and analytics
c) Detailed understanding of emerging technologies and trends
d) Independent competitive insights from the marketplace including competitor analysis and teardowns
e) Supplier and distributor engagement in ideation process

However, fast revenue growth companies do not see themselves as
being the most competent in deep customer insights
Top 3 ideation capabilities in terms of competency (By revenue growth type)
22% 23% 22%

22% 21%
20% 20% 20%
20%
c b a b c a b e d
Ideation capability coding for bar chart above:

a) Open innovation/capturing ideas at any point in the process from external sources
b) Deep consumer and customer insights and analytics
c) Detailed understanding of emerging technologies and trends
d) Independent competitive insights from the marketplace including competitor analysis and teardowns
e) Supplier and distributor engagement in ideation process

Faster growth companies selected the ideation and project selection
stages as areas of opportunity to improve
Innovation stages where most/least improvement is needed (By revenue growth type)
Needs Most Improvement
42%
30% 31%
28% 27%
26%
22% 22% 21%
20% 18%
15%
Ideation Project Selection Product Development Commercialization

Needs Least Improvement
35%
32%
30% 28% 29% 28%
26% 27%
25%
17%
13%
11%
Ideation Project Selection Product Development Commercialization

Faster growth Same growth Slower growth
HLIs excel at each of these 5 characteristics and have been able to
integrate them
Close alignment of innovation strategy
with business strategy
Rigorous control
of project
selection early in
the innovation Company-wide
process cultural support of
Ability to integrate innovation
all these
characteristics
Base innovation on Leadership is closely

direct insights from involved with the
end-users innovation program

Introduction

In 2018, R&D spending by the Top 1000 companies accelerated
11.4% from 2017 spending levels, the highest growth since 2007
Global Innovation 1000 R&D Spending

2005–2018, $US Billion
5.29%
13–year CAGR =
5.3%
+95%
$782
$680 $680 $702
$638 $647
$614 0.04% 3.2% 11.4%
$538 $560 1.4% 5.1%
3.8%
$501 $508 9.7%
$447
$400 $409 7.3% -5.6% 10.3%
12.2%
2.2% 9.3%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: 2018 Global Innovation 1000 Study, Bloomberg data, Capital IQ data, Thomson Reuters Eikon data
Total revenue of the Innovation 1,000 also rose by 11.4% from 2017
to 2018
Global Innovation 1000 Revenue

2005–2018, $US Trillion
13–year CAGR =
4.81%
4.8%
+84%
$18 $18
$18 $18 $17
-1.0% $16
$16 1.3% 3.7% $16
$15
12.0% -11.8% -2.5% 11.4%
$13 $13
$12 12.3% -10.4% 16.7%
$11 13.1%
$9 11.5%
11.7%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
This was due to a rise in revenue across all industries, but in
particular from growth in Energy
Revenue by Industry
2005–2018, $US Trillion
$5.0
$4.5
$4.0
$3.5
3.1 Chemicals and Energy +16%
2.9
$3.0 2.7 Auto
Industrials
2.4
$2.5 2.6 2.6
Computing and Electronics
2.3
$2.0
1.5 Consumer
1.4
$1.5 Healthcare
1.3 Software and Internet
$1.0 0.9
0.8
0.7 Other
0.6
$0.5 0.7 Telecom
0.5
Aerospace and Defense
$0.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
R&D intensity remains at an all-time high
Global Innovation 1000 R&D Intensity

2005–2018
13–year CAGR =
0.45%
0.45%
+6%
4.5% 4.5%
4.2% 4.2%
3.9% 0.02%
3.8% 3.8% 3.6% 3.8% 3.6% 3.7% +5.9%
3.6% 3.5% 3.5%
-8.5% -2.0% -0.8% 13.4%
-4.5% 5.3% -5.5% -2.0% 2.5% -2.2% 6.1%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
The Consumer industry overtook Software & Internet for the first
time in 5 years as the fastest growth in R&D spending
Change in R&D Spending by Industry

2017–2018
35% 33.7%
30%
26.3%
25%
20.6%
20%
15.9% 15.2%
15%
10% 8.6% 8.1%

6.6%
5%
0%
-0.5%
-5%
-10% -7.8%
Consumer Software Industrials Auto Computing Telecom Healthcare Aerospace Chemicals Other
and and and and
Internet Electronics Defense Energy
Software & Internet and Healthcare have the largest R&D
intensities of all industries
R&D intensity (Total R&D expenditure/Total revenue) by Industry

2018
14.0%
14%
12% 11.4%
10%
8% 7.3%
6%
4.1% 3.9%
4%
2.8%
1.7% 1.6% 1.8%
2%
1.0%
0%
Software Healthcare Computing Auto Aerospace Industrials Consumer Telecom Chemicals Other
and and and and
Internet Electronics Defense Energy
By 2019, Healthcare will pass Computing & Electronics to become
the largest R&D spending industry
R&D Spending by Industry, estimates

$US Billion
$190
176 177 178 Healthcare
$180
168 171 Computing and Electronics
168 166
$170 163 162 Software and Internet
$160 154
150
$150 142
137 136
$140
130 Auto
127 125
$130 121
$120 116
109 109
$110 103 105 105
99
$100
89 90
$90 86 87 86 Industrials
83
$80 74 75 73
70 68 71 69
$70 64 66
56 71
$60 52 51
$50 44 46
41 43 Chemicals and Energy
$40 Consumer
$30 Aerospace and Defense
$20 13 15 15 14 12
9 9 11 11 11 12 11 11 Other
8 7
$10 5
Telecom
$0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019_Est 2020_Est
* CAGR Value is calculated for last 5 years span from 2013 to 2018
Computing & Electronics, Healthcare, and Auto represent 60% of all
R&D spending in 2018, a slight contraction from 2017
2018 R&D Spending by Industry

Total = $US 781.8 Billion
Other
Telecom
Aerospace and Defense
1.5% Consumer
Computing and Electronics 1.9% Chemicals and Energy
2.8% 4.1%
22.5%
3.2%
Industrials
10.6%
15.7%
21.7% Software and Internet
Healthcare
16.0%
Auto
Source: 2018 Global Innovation 1000 Study, Capital IQ data, Thomson Reuters Eikon data
Companies across all regions increased their R&D spending in 2018
with China and Europe showing the highest growth YoY
R&D Spending by Region

2014–2018, $US Billion
$0.34 332
North America
$0.32 308
297 +4%
$0.30 +7.8%
275 +8%
$0.28
257 +7%
$0.26
$0.24
$0.22 214
201 Europe
194 182
$0.20 +4% 188
-9%
+3%
$0.18 +14.0%
$0.16
$0.14
117 117
$0.12 109 107 Japan
-6% 101
+6%
$0.10 -8% +9.3%
$0.08
54 54 54 58 China
$0.06 50 61
+10% 0% -1% ROW
45 0% 45 8.6%
$0.04 30 39 +15%
+32% +34.4%
$0.02
$0.00
2014 2015 2016 2017 2018
China and Europe increased the number of companies in the Top
1,000, while the other three regions saw a decrease
Number of Companies in the Top 1,000 by Region

2005–2018
500
469 468 461
441
450
420
393
400 378 381
368 368
360 351 350
348 -5%
350 North America
300
266 260
247 252 248 251 244 252
242 235 Europe
250 222 223 +7%
202
191
200
165 171
160
145 Japan -6%
150 123 125
114 120 China +16%
93
100 75 111 ROW -8%
101
44 50
50 27
8 11 10 14 15
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
This is the second consecutive year Amazon is largest R&D spender;
Sanofi and Siemens rejoined the Top 20 Spenders
Top 20 R&D Spenders
Companies in RED have been among the top 20 R&D spenders every year since 2005
Rank in Rank in R&D spending R&D Change
Change Company Geography Industry
2018 2017 (US$ Billions) Intensity from 2017
1 1 NA Amazon.com, Inc. North America Software and Internet 22.6 12.7% 40.6%
2 2 NA Alphabet Inc. North America Software and Internet 16.2 14.6% 16.3%
3 5 2 Volkswagen Europe Auto 15.8 5.7% 14.1%
Computing and
4 4 NA Samsung Electronics ROW 15.3 6.8% 6.8%
Electronics
Computing and
5 3 -2 Intel Corporation North America 13.1 20.9% 2.8%
Electronics
6 6 NA Microsoft Corporation North America Software and Internet 12.3 13.7% -5.7%
Computing and
7 9 2 Apple Inc. North America 11.6 5.1% 15.3%
Electronics
8 7 -1 Roche Holding AG Europe Healthcare 10.8 18.9% -8.7%
9 12 3 Johnson & Johnson North America Healthcare 10.6 13.8% 16.0%
10 8 -2 Merck & Co., Inc. North America Healthcare 10.2 25.4% 0.8%
11 11 NA Toyota Motor Corporation Japan Auto 10.0 3.9% 2.6%
12 10 -2 Novartis AG Europe Healthcare 8.5 17.0% -11.1%
13 15 2 Ford Motor Company North America Auto 8.0 5.1% 9.6%
14 20 6 Facebook, Inc. North America Software and Internet 7.8 19.1% 31.0%
15 14 -1 Pfizer Inc. North America Healthcare 7.7 14.6% -2.7%
16 13 -3 General Motors Company North America Auto 7.3 5.0% -9.9%
17 16 -1 Daimler AG Europe Auto 7.1 3.6% -9.2%
18 19 1 Honda Motor Co., Ltd. Japan Auto 7.1 5.4% 8.7%
19 24 5 Sanofi Europe Healthcare 6.6 15.1% 5.8%
20 23 3 Siemens Europe Industrials 6.1 6.2% 4.9%
214.5 11.6% 7.3%
Netflix made the top 10 most innovative companies list for the first
time while Apple regained the #1 rank from Alphabet
10 Most Innovative Companies
Rank 2010 2011 2012 2013 2014 2015 2016 2017 2018
1 Apple Apple Apple Apple Apple Apple Apple Alphabet Apple
2 Google Google Google Google Google Google Alphabet* Apple Amazon
3 3M 3M 3M Samsung Amazon Tesla 3M Amazon Alphabet

General General
4 Samsung Amazon Samsung Samsung Tesla Tesla Microsoft
Electric Electric
General
5 Toyota Microsoft 3M Tesla Amazon Amazon Microsoft Tesla
Electric
General
6 Microsoft IBM Microsoft 3M 3M Samsung Samsung Samsung
Electric
Procter & General General General
7 Samsung Toyota Microsoft Facebook Facebook
Gamble Electric Electric Electric
Procter & Procter & General
8 IBM IBM Microsoft Microsoft Microsoft Facebook
Gamble Gamble Electric
General
9 Samsung Toyota IBM Tesla IBM IBM IBM Intel
Electric
Procter &
10 Intel Facebook Amazon Facebook Toyota IBM Alibaba Netflix
Gamble
Samsung is the only non US-firm

and IBM was absent from the top 10
ranking for the first time this year

* In 2015, Google announced a corporate restructuring forming an umbrella company called Alphabet
Once again, the 10 Most Innovative Companies outperform the Top
10 R&D Spenders on a set of financial metrics
10 Most Innovative Companies vs. Top 10 R&D Spenders
10 Most 2018 R&D 2018 R&D Highest 100%

Innovative spend R&D Top 10 R&D spend R&D Possible
Rank Companies (US$ Bn) intensity Spenders (US$ Bn) intensity Score:
1 Apple Inc. 11.6 5.1% Amazon.com, Inc. 22.6 12.7%
Amazon.com,
2 22.6 12.7% Alphabet Inc. 16.2 14.6%
Inc.
Volkswagen
3 Alphabet Inc. 16.2 14.6% 15.8 5.7%
Aktiengesellschaft
Samsung 57%
Microsoft Normalized
4 12.3 13.7% Electronics Co., 15.3 6.8% 49%
Corporation Performance
Ltd. 47%
of Industry 48%
5 Tesla, Inc. 1.4 11.7% Intel Corporation 13.1 20.9% Peers: 37% 36%
Samsung 29%
Microsoft
6 Electronics Co., 15.3 6.8% 12.3 13.7%
Corporation
Ltd.
7 Facebook, Inc. 7.8 19.1% Apple Inc. 11.6 5.1%

Lowest
Possible 0%
General Electric Roche Holding
8
Company
4.8 4.0%
AG
10.8 18.9% Score: Revenue Gross Margin Market Cap
Growth (5- (5-yr. CAGR) Growth (5-
yr. CAGR) yr. CAGR)
Intel Johnson &
9 13.1 20.9% 10.6 13.8%
Corporation Johnson
10 Most Innovative Companies
10 Netflix, Inc. 1.1 9.0% Merck & Co., Inc. 10.2 25.4%
Top 10 R&D Spenders
For the complete study and more
information on the annual
Strategy& Global Innovation 1000 study
Please visit:
http://www.strategyand.pwc.com/innovation1000
For media or other inquiries, please contact:
Rowena Mearley
+ 44 7730 598 643
rowena.mearley@pwc.com

© 2018 PwC. All rights reserved.
PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see
www.pwc.com/structure for further details.
This content is general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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October 2018

Strategy& | PwC 2018-Global-Innovation-1000-Fact-Pack.pptx 1

2005: 2006: 2007: 2008: 2009: 2010: 2011:

2012: 2013: 2014: 2015: 2016: 2017: 2018:

Strategy& | PwC 2018-Global-Innovation-1000-Fact-Pack.pptx 2

– In 2018 awarded the National Gold Medal for

– Given “2006 Special Achievement Award for

– In 2009 given “Best of Visions” award by

– Cited in more than 200 publications spanning

Strategy& | PwC 2018-Global-Innovation-1000-Fact-Pack.pptx 4

Strategy& | PwC 2018-Global-Innovation-1000-Fact-Pack.pptx 5

Note: Use of local currency would result in different YoY changes

• Adidas • Harris Corporation • Stanley Black &

Aerospace and Defense Computing and Electronics Healthcare

Automotive AMETEK, Inc. North America CSL Limited ROW

Burelle SA Europe Entegris, Inc. North America Essilor International Société

2017 HLI companies: By Performance indices

Notes: 2017 – 88 HLI companies, 912 rest of Top 1000 companies

Comparing performance indices (2007, 2012, and 2017 period)

100.0% 100.0% 100.0%

Faster growth companies Same growth companies Slower growth companies

High alignment Medium alignment Low alignment

100.0% 100.0% 100.0%

Faster growth companies Same growth companies Slower growth companies

High alignment Medium alignment Low alignment

Fast revenue growth companies Slow revenue growth companies

Source: 2018 Global Innovation 1000 Study

Alignment of innovation strategy with business strategy

Need Seekers Market Readers Technology Drivers

High alignment Medium alignment Low alignment

Source: 2018 Global Innovation 1000 Study

100.0% 100.0% 100.0%

Faster growth companies Same growth companies Slower growth companies

High alignment Medium Alignment Low alignment

Faster growth companies Same growth companies Slower growth companies

Ideation capability coding for bar chart above:

Source: 2018 Global Innovation 1000 Study

22% 23% 22%

Faster growth companies Same growth companies Slower growth companies

Ideation capability coding for bar chart above:

Source: 2018 Global Innovation 1000 Study

Ideation Project Selection Product Development Commercialization

Ideation Project Selection Product Development Commercialization

Base innovation on Leadership is closely

Source: 2018 Global Innovation 1000 Study

Strategy& | PwC 2018-Global-Innovation-1000-Fact-Pack.pptx 21

Global Innovation 1000 R&D Spending

Global Innovation 1000 Revenue

Global Innovation 1000 R&D Intensity

Change in R&D Spending by Industry

10% 8.6% 8.1%

R&D intensity (Total R&D expenditure/Total revenue) by Industry

R&D Spending by Industry, estimates

2018 R&D Spending by Industry

R&D Spending by Region

Number of Companies in the Top 1,000 by Region

10 Most Innovative Companies

1 Apple Apple Apple Apple Apple Apple Apple Alphabet Apple

2 Google Google Google Google Google Google Alphabet* Apple Amazon

3 3M 3M 3M Samsung Amazon Tesla 3M Amazon Alphabet

Samsung is the only non US-firm

Source: 2018 Global Innovation 1000 Study

10 Most 2018 R&D 2018 R&D Highest 100%