2018 Global Innovation 1000 - Strategy&
October 20182018 GlobalInnovation 1000What the Top InnovatorsGet Right
IntroductionWhat the Top Innovators Get RightInnovation 1000 updateStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx1
For the 14th year, Strategy& studied innovation trends and spendingat the world’s 1000 largest publicly listed corporate R&D spenders2005:Money isn'teverything2006:Smartspenders2007:The customerconnection2010:2008:2009:How topBeyond borders Profits down,spending steady innovatorskeep winning2011:Why cultureis key2012:Making ideaswork2013:Navigating thedigital future2014:Proven paths toinnovationsuccess2015:Innovation’snew worldorder2018:What the TopInnovators GetRightStrategy& Software as acatalyst2017:Will StrongerBordersWeakenInnovation?2
The study has become a globally recognized contributor to betterunderstanding what drives innovation success The Global Innovation 1000 study hasreceived significant media and academicattention:Global Innovation 1000:Selected press coverage– Called “the most comprehensive assessmentof the relationship between R&D investmentand corporate performance” by theThe Economist in 2009– In 2018 awarded the National Gold Medal forBest Web Feature Article and in 2011 & 2014,awarded Gold National Medal for OriginalResearch by the American Society ofBusiness Press Editors (“the Azbee”)– Given “2006 Special Achievement Award forAdvancing Innovation” by Innovate Forum– In 2009 given “Best of Visions” award byProduct Development ManagementAssociation– Cited in more than 200 publications spanning34 countries and 6 continentsStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx3
IntroductionWhat the Top Innovators Get RightInnovation 1000 updateStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx4
Executive Summary – High-leverage innovators This year we conducted an analysis to identify High-Leverage Innovators (HLIs) – companies fromour Top 1000 list that consistently outperform their industry peers across a basket of 7 measures offinancial 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 2007-2012period, a period that included the Great Recession and initial recovery High-leverage innovators and the larger universe of companies that report comparatively highperformance vs. their peers share six key characteristics:1.Close alignment of innovation and business strategy2.Company-wide cultural support for innovation3.Close involvement with innovation program by leadership4.Deep understanding of insights from end-users5.Rigorous approach to R&D project selection6.Ability to integrate all of these things together to create a unique experienceStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx5
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 companiesrising 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 growthin R&D spending, up 26.3% this year while Software and Internet, the second fastest growthindustry 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 up14%, 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 2011respectively Apple regained the top rank as the most innovative company from Alphabet. Netflix joined thetop 10 most innovative companies list for the first time Companies selected by survey respondents as the most innovative companies continue as agroup to outperform the top 20 R&D spendersNote: Use of local currency would result in different YoY changesStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx6
Only two firms made the HLI list for the entire 15 yearsComparing the HLI companies over three 5-year periods – By # of HLI companiesTo view all HLI periodlists, visit: What the TopInnovators Get Right ons b229 AdidasAdvanced SemiconductorEngineeringAmazon.comAmetekAmphenolAU OptronicsChimei InnoluxCompal CommunicationsCSL LimitedEcolabEnergizer HoldingsFresenius SE & CoGarminHankook Tire Harris CorporationHewlett-PackardHexagon ABHologic, Inc.Hon Hai Precision IndustryHyosung CorporationHyundai Heavy IndustriesIDEXX Laboratories Inc.Ingenico GroupKeyence CorporationLVMHNewmont MiningReckitt BenckiserReynolds AmericanSmith & Nephew33 Stanley Black &StrykerSysmex Teva PharmaceuticalIndustriesAppleStanley Black & Decker2HLIs that appeared onceacross all 3 HLI period lists*HLI companies that appearedin 2 out of 3 HLI periodsHLI companies thatappeared in all 3 periods*2007 – 118 HLI companies, 2012 – 95 HLI companies, 2017 – 88 HLI companiesSource: 2017 Global Innovation 1000 Study, 2012 Global Innovation 1000 Study, 2007 Global Innovation 1000 Study, Bloomberg data, Capital IQ dataStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx7
We identified 88 high-leverage innovators in our 2017 Top 1000Aerospace and DefenseComputing and ElectronicsHealthcareCompany NameRegionCompany NameRegionCompany NameRegionEmbraer S.A.ROWAAC Technologies Holdings Inc.ChinaCadila Healthcare LimitedROWAMETEK, Inc.North AmericaCSL LimitedROWRegionApple Inc.North AmericaDaewoong Co., Ltd.ROWBurelle SAEuropeEntegris, Inc.North AmericaFiat Chrysler Automobiles N.V.EuropeGN Store Nord A/SEuropeEssilor International SociétéAnonymeEuropeFord Otomotiv Sanayi A.S.ROWFresenius SE & Co. KGaAEuropeGeely Automobile Holdings LimitedChinaHangzhou Hikvision DigitalTechnology Co., Ltd.ChinaGlenmark Pharmaceuticals LimitedROWHanon SystemsROWHengtong Optic-electric Co., Ltd.ChinaGrifols, S.A.EuropeSubaru CorporationJapanIngenico Group - GCSEuropeHikma Pharmaceuticals PLCEuropeJiangsu Zhongtian Technology Co.ChinaHologic, Inc.North AmericaKeyence CorporationJapanJazz Pharmaceuticals Public LimitedCompanyEuropeAutomotiveCompany NameChemicals and EnergyCompany NameRegionEastman Chemical CompanyNorth AmericaLeshi Internet Information &Technology Corp., BeijingChinaJiangsu Hengrui Medicine Co., Ltd.ChinaEcolab Inc.North AmericaPegatron CorporationROWLupin LimitedROWDIC CorporationJapanSiliconware Precision Industries Co., ROWLonza Group LtdEuropeSkyworks Solutions, Inc.Mallinckrodt Public LimitedCompanyNorth AmericaMedtronic plcEuropeMylan N.V.North AmericaResMed Inc.North AmericaSanten Pharmaceutical Co., Ltd.JapanShanghai Fosun Pharmaceutical(Group) Co., Ltd.ChinaLVMH Moët Hennessy Louis Vuitton EuropeSino Biopharmaceutical LimitedChinaPou Chen CorporationROWReynolds American Inc.North AmericaSun Pharmaceutical IndustriesLimitedROWSky plcEuropeSysmex CorporationJapanSvenska Cellulosa Aktiebolaget SCA Europe*Thermo Fisher Scientific Inc.North AmericaTyson Foods, Inc.North AmericaWalgreens Boots Alliance, Inc.North AmericaValeant PharmaceuticalsInternational, Inc.North AmericaConsumerCompany NameRegionAdidas AGEuropeAltria Group, Inc.North AmericaAmer Sports CorporationEuropeTaiwan SemiconductorManufacturing Company LimitedNorth AmericaROWSource: 2017 Global Innovation 1000 Study, Bloomberg data, Capital IQ dataStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx8
continuedIndustrialSoftware and InternetCompany NameRegionCompany NameRegionASSA ABLOY AB (publ)EuropeAmadeus IT Group, S.A.EuropeDaikin Industries,Ltd.JapanNetEase, Inc.ChinaDürr AktiengesellschaftEuropePlaytech plcEuropeHeidelbergCement AGEuropeHexagon ABEuropeSS&C Technologies Holdings, Inc.North AmericaHyosung CorporationROWTencent Holdings LimitedChinaKION GROUP AGEuropeZhejiang Dahua Technology Co.,Ltd.ChinaKONE OyjEuropeKubota CorporationJapanObayashi CorporationJapanPower Construction Corporation ofChina Ltd.Company NameRegionChinaAT&T Inc.North AmericaSchindler Holding AGEuropeBCE Inc.North AmericaSealed Air CorporationNorth AmericaKDDI CorporationJapanSoftBank Group Corp.JapanShanghai Construction Group Co.,Ltd.China*Stanley Black & Decker, Inc.North AmericaSumitomo Heavy Industries, Ltd.JapanSunny Optical Technology (Group)Company LimitedEuropeXinjiang GoldWind Science &Technology Co., Ltd.ChinaTelecomsApple and Stanley Black &Decker were the only twocompanies that appearedon all three HLI list for thestudy years: 2007, 2012,and 2017To explore the High-Leverage Innovators list further (including the HLI list for thestudy years 2007 and 2012), visit rce: 2017 Global Innovation 1000 Study, Bloomberg data, Capital IQ dataStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx9
Performance Index for HLI companies/Rest of Top 1000High-Leverage Innovators outperform over a sustained period oftime on most performance metrics2017 HLI companies: By Performance s inAverageGross Profit Relative TotalGross rowthNotes: 2017 – 88 HLI companies, 912 rest of Top 1000 companiesSource: 2017 Global Innovation 1000 study, Bloomberg data, Capital IQ dataStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx10
HLI companies performed even better during the Great Recessionand first years of the recoveryPerformance Index for HLI companies/Rest of Top 1000Comparing performance indices (2007, 2012, and 2017 s Profit GrowthOperating Income GrowthRelative Total Shareholder ReturnNotes: 2007 – 118 HLI companies, 882 rest of Top 1000 companies, 2012 – 95 HLI companies, 905 rest of Top 1000 companies, 2017 – 88 HLIcompanies, 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 HLIcompanies. Gross Profit Growth, Operating Income Growth, and Relative TSR are the metrics shown here vs. all 7 due to the significant performance ofHLI companies in 2012Source: 2007 Global Innovation 1000 study, 2012 Global Innovation study, 2017 Global Innovation 1000 study, Bloomberg data, Capital IQ dataStrategy& 017201211
Faster growth companies have tighter alignment between theirinnovation and business strategiesAlignment of innovation strategy with business strategy (by revenue growth 3%18.0%24.4%4.8%9.7%Faster growth companiesSame growth companiesHigh alignmentSlower growth companiesMedium alignmentLow alignmentSource: 2018 Global Innovation 1000 StudyStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx12
Faster growth companies see tighter alignment between theirculture and their innovation strategyAlignment of company culture support of innovation strategy (by revenue growth 2%20.9%34.6%14.3%7.9%Faster growth companiesSame growth companiesHigh alignmentSlower growth companiesMedium alignmentLow alignmentSource: 2018 Global Innovation 1000 StudyStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx13
Not only did faster revenue growth companies have high alignmentof business and innovation strategy, they were also more likely tohave high cultural support of innovationSlow revenue growth companiesCultural support of innovation x Alignment ofbusiness strategy to innovation strategyHighHighFast revenue growth companiesCultural support of innovation x Alignment ofbusiness strategy to innovation strategy10.5%Cultural support ofinnovation6.5%Moderate alignmentLow15.9%Low alignmentLowHigh alignmentModerate alignmentHigh alignment9.2%Moderate alignmentAlignment of Business Strategyto Innovation Strategy23.7%56.6%11.8%HighLowCultural support ofinnovation65.9%Low alignmentLowModerate alignmentAlignment of Business Strategyto Innovation StrategyHigh represents the % of survey respondents that reported specific revenue growth type (fast, slow)Source: 2018 Global Innovation 1000 StudyStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx14
Need Seekers’ innovation strategies were almost twice as likely tobe highly aligned with their business strategies vs. other modelsAlignment of innovation strategy with business strategyNeed SeekersMarket ReadersTechnology Drivers2%11%15%14%48%53%36%37%84%High alignmentMedium alignmentLow alignmentSource: 2018 Global Innovation 1000 StudyStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx15
Fast revenue growth companies see the most involvement of theexecutive team with R&D investment and strategyInvolvement of executive team in R&D investment and strategy (by revenue growth .7%25.6%4.8%9.2%Faster growth companiesSame growth companiesHigh alignmentSlower growth companiesMedium AlignmentLow alignmentSource: 2018 Global Innovation 1000 StudyStrategy& er 201816
All revenue growth type companies ranked deep customer insightsas the most important ideation capabilityTop 3 ideation capabilities in terms of importance (By revenue growth type)30%28%25%25%24%22%20%19%bcdFaster growth companiesbcaSame growth companies19%bcdSlower growth companiesIdeation capability coding for bar chart above:a) Open innovation/capturing ideas at any point in the process from external sourcesb) Deep consumer and customer insights and analyticsc) Detailed understanding of emerging technologies and trendsd) Independent competitive insights from the marketplace including competitor analysis and teardownse) Supplier and distributor engagement in ideation processSource: 2018 Global Innovation 1000 StudyStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx17
However, fast revenue growth companies do not see themselves asbeing the most competent in deep customer insightsTop 3 ideation capabilities in terms of competency (By revenue growth type)22%23%22%20%cbaFaster growth companiesb22%20%20%caSame growth companiesb21%e20%dSlower growth companiesIdeation capability coding for bar chart above:a) Open innovation/capturing ideas at any point in the process from external sourcesb) Deep consumer and customer insights and analyticsc) Detailed understanding of emerging technologies and trendsd) Independent competitive insights from the marketplace including competitor analysis and teardownse) Supplier and distributor engagement in ideation processSource: 2018 Global Innovation 1000 StudyStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx18
Faster growth companies selected the ideation and project selectionstages as areas of opportunity to improveInnovation stages where most/least improvement is needed (By revenue growth type)Needs Most ect SelectionProduct DevelopmentNeeds Least 6%28%27%29%28%17%13%11%IdeationProject SelectionFaster growthProduct DevelopmentSame growthCommercializationSlower growthSource: 2018 Global Innovation 1000 StudyStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx19
HLIs excel at each of these 5 characteristics and have been able tointegrate themClose alignment of innovation strategywith business strategyRigorous controlof projectselection early inthe innovationprocessAbility to integrateall thesecharacteristicsBase innovation ondirect insights fromend-usersCompany-widecultural support ofinnovationLeadership is closelyinvolved with theinnovation programSource: 2018 Global Innovation 1000 StudyStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx20
IntroductionWhat the Top Innovators Get RightInnovation 1000 updateStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx21
In 2018, R&D spending by the Top 1000 companies accelerated11.4% from 2017 spending levels, the highest growth since 2007Global Innovation 1000 R&D Spending2005–2018, US Billion13–yearCAGR 5.29%5.3% 95% 782 400 4099.3%2.2%20052006 447 5017.3% 538 508-5.6% 560 614 6385.1%1.4%3.8% 680 647 6800.04%3.2% 20142015201620172018Source: 2018 Global Innovation 1000 Study, Bloomberg data, Capital IQ data, Thomson Reuters Eikon dataStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx22
Total revenue of the Innovation 1,000 also rose by 11.4% from 2017to 2018Global Innovation 1000 Revenue2005–2018, US Trillion13–yearCAGR 4.81%4.8% 84% 16 15 13 12 11 9-10.4%3.7%1.3% 18 17-1.0% 16-11.8%12.0% 1312.3% 18 18 18 09201020112012201320142015201620172018Source: 2018 Global Innovation 1000 Study, Bloomberg data, Capital IQ data, Thomson Reuters Eikon dataStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx23
This was due to a rise in revenue across all industries, but inparticular from growth in EnergyRevenue by Industry2005–2018, US Trillion 5.0 4.5 4.0 3.53.12.9 3.02.72.6 2.6 2.5 16%AutoIndustrialsComputing and Electronics2.3 2.01.4 1.51.3 0162017ConsumerHealthcare0.90.80.6Software and InternetOtherTelecom0.70.5 0.5 0.020052.4Chemicals and EnergyAerospace and Defense2018Source: 2018 Global Innovation 1000 Study, Bloomberg data, Capital IQ data, Thomson Reuters Eikon dataStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx24
R&D intensity remains at an all-time highGlobal Innovation 1000 R&D Intensity2005–201813–year CAGR 0.45%0.45% 20123.6%3.5%-2.2%2.5%201320146.1%4.5%4.5%0.02%3.7% 5.9%13.4%2015201620172018Source: 2018 Global Innovation 1000 Study, Bloomberg data, Capital IQ data, Thomson Reuters Eikon dataStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx25
The Consumer industry overtook Software & Internet for the firsttime in 5 years as the fastest growth in R&D spendingChange in R&D Spending by mer Software IndustrialsandInternetAutoComputing Telecom Healthcare Aerospace ChemicalsandandandElectronicsDefense EnergyOtherSource: 2018 Global Innovation 1000 Study, Bloomberg data, Capital IQ data, Thomson Reuters Eikon dataStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx26
Software & Internet and Healthcare have the largest R&Dintensities of all industriesR&D intensity (Total R&D expenditure/Total revenue) by .8%1.7%2%1.6%1.8%1.0%0%Software Healthcare ComputingandandInternetElectronicsAutoAerospace Industrials Consumer Telecom ChemicalsandandDefenseEnergyOtherSource: 2018 Global Innovation 1000 Study, Bloomberg data, Capital IQ data, Thomson Reuters Eikon dataStrategy& PwC2018-Global-Innovation-1000-Fact-Pack.pptx27
By 2019, Healthcare will pass Computing & Electronics to becomethe largest R&D spending industryR&D Spending by Industry, estimates US Billion 190 180168 170 160142178 HealthcareComputing and Electronics162Software and Internet136125121130Auto116 11099 10086 908974705243414446105109105109837564
Strategy& PwC 2018 -Global Innovation 1000 Fact Pack.pptx Executive Summary –Update on Top 1000 companies 6 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
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Test Name Score Report Date March 5, 2018 thru April 1, 2018 April 20, 2018 April 2, 2018 thru April 29, 2018 May 18, 2018 April 30, 2018 thru May 27, 2018 June 15, 2018 May 28, 2018 thru June 24, 2018 July 13, 2018 June 25, 2018 thru July 22, 2018 August 10, 2018 July 23, 2018 thru August 19, 2018 September 7, 2018 August 20, 2018 thru September 1
EnKa English-Kannada 10,955 1000 1000 EnBa English-Bangla 13,623 1000 1000 EnHe English-Hebrew 10,501 1000 1000 HeEn Hebrew-English 9,447 1000 1000 Table 1: Official data sets in NEWS 2018 which we use in our experiments. transliteration datasets (Haizhou et al.,2004), and the VNU-HCMUS dataset (Cao et al.,2010;Ngo et al.,2015), respectively .
panoramic X-ray machine and the PC-1000/Laser 1000 dental panoramic/cephalometric dental X-ray machine. The PC-1000 will enable the user to take panoramic X-ray images. The PC-1000/Laser 1000 will enable the user to take panoramic X-ray images, as well as cephalometric X-ray images. A laser alignment device is incorporated into the PC-1000 .
panoramic X-ray machine and the PC-1000/Laser 1000 dental panoramic/cephalometric dental X-ray machine. The PC-1000 will enable the user to take panoramic X-ray images. The PC-1000/Laser 1000 will enable the user to take panoramic X-ray images, as well as cephalometric X-ray images. A laser alignment device is incorporated into the PC-1000 .
Unit-V Generic competitive strategy:- Generic vs. competitive strategy, the five generic competitive strategy, competitive marketing strategy option, offensive vs. defensive strategy, Corporate strategy:- Concept of corporate strategy , offensive strategy, defensive strategy, scope and significance of corporate strategy
the overall innovation strategy, planning, and implementation within their focus areas. The innovation executive often develops and executes an enterprise strategy for innovation. This executive is responsible for leading the organization's innovation team, guiding innovation priorities that support the health system's strategic goals,
tables and charts is the Central Bank of Malta unless otherwise indicated. ISSN 2312-5918 (print) ISSN 2074-2231 (online) CONTENTS. PREFACE 11 1. MACROPRUDENTIAL RISK ASSESSMENT 13 2. DEVELOPMENTS IN THE BANKING SECTOR 21 2.1 Core Domestic Banks 22 2.1.1 Profitability 23 2.1.2 Asset Quality 24 Box 1: Bank Lending Survey Results 25 2.1.3 Funding and Liquidity 33 2.1.4 Capital and Leverage 35 2 .
