An annual survey on global innovation has ranked the iPhone and iPad maker first for the third consecutive year.
As the name suggests, Booz & Company's 2012 Global Innovation 1000 study, out earlier this month, examines the world's 1000 leading companies in terms of research and development spend and then gives them a chart position based on how well this investment has translated into performance.
Facebook out of top 10, Amazon in
As well as Apple retaining its leadership position, Google also stayed in second place for the third year running and, as in 2010 and 2011, 3M occupied third place. Samsung moved into fourth place from seventh in 2011 (the first time it had ever made the top 10) and Microsoft dropped one place to sixth. Facebook also fell out of the top 10 (it had been in tenth position in 2011) to be replaced by Amazon, making its first appearance in the top 10.
Of Facebook's fall from grace, Barry Jaruzelski, senior partner at Booz & Company said: "Facebook's drop from the Top 10 Most Innovative Companies list may suggest that social media companies have lost some of their initial luster. In contrast, Amazon's first-time appearance on the list suggests that both the R&D community and consumers recognize companies as providing superior value when they offer products and services in creative new ways that meet customer needs through technical innovation."
Overall R&D spend not main determinant
The study, which is now in its eighth year, reveals that there is no direct correlation between a company's R&D budget and its success. Toyota was the biggest investor in R&D this year with an investment of $9.9 billion yet it only ranks in seventh place on the chart. Likewise Microsoft's $9 billion spend was the greatest of any technology company (fifth place on the spending chart) yet found itself outside the top five in terms of innovation. In comparison, Apple's spend was so small that it didn't make the top 20 (unlike Nokia and Panasonic) yet it was the most successful in converting investment into profits. Booz&Co's research revelas that for most companies only, 1-20 percent of their ideas make it to the development stage and only 1-20 percent of projects at development stage ever come to market.
Apple's performance is due to the fact that it engages with and understands its customers so well that it can meet their needs faster than any of its competitors. Whereas Google's success is due to focusing its R&D on its existing as well as new technologies to bring small incremental changes to services as well as large-scale technical innovations.