Forbes on Monday, 28th May released its 2018 list of The World’s 100 Most Innovative Companies. Forbes’ list ranks companies most likely to come up with the next big innovation, and how new players come in, innovate and garner the attention of investors.
In the 2018 list, Salesforce drops to No. 3 while ServiceNow takes the lead as No. 1, claiming the title of the World’s Most Innovative Company of 2018. An on‑demand financial management and human capital management software vendor, Workday followed suit as the No. 2, Tesla as No. 4 and Amazon.com comes fifth on the new list. Salesforce had been ranked first on the list in 2011 to 2015 and in 2017.
According to Fred Allen, Forbes senior editor, “Innovation is as hard to define as it is to do successfully but we’ve figured out how to determine who’s winning at it by calculating an ‘Innovator’s Premium’ that gauges which companies are best able to capitalize on investors’ confidence in their creativity and inventiveness.
“This year, we see that digital transformation is where it’s at: The top three finishers No. 1 ServiceNow, No. 2 Workday, and No. 3 Salesforce all focus on that at the heart of what they do.” Allen said.
ServiceNow maintains a $30 billion market cap with 2017 revenues of $1.93 billion and is expected to grow more than 30% this year.
The World’s Most Innovative Companies list consists of firms that investors feel are most likely to come up with the next big innovation. Companies are ranked by their innovation premium: the difference between their market capitalization and the net present value of cash flows from existing businesses (based on a proprietary algorithm from Credit Suisse HOLT). The difference between them is the bonus given by equity investors on the educated hunch that the company will continue to come up with profitable new growth. To be included on the list, firms need seven years of financial data and $10 billion in market cap.
However, the question that begs for answer is why Google name was missing on the list when Facebook, Amazon, Netflix and Unilever appears on the list.
See Top Ten Most Innovative Companies of 2018 List;