Management consulting firm Booz & Company released its eighth annual Global Innovation 1000 Study in the last week of October. Among the study’s key findings were that research and development spending had reached an ”all-time high,” increasing by 9.6 percent in 2011 for a total $603 billion, and that Amazon edged out Facebook to join the study’s top 10 “most innovative” companies. The top 10 list was compiled based on answers from survey respondents who were asked which companies they found to be the most innovative. Apple, Google and 3M took the top three slots with Samsung, General Electric, Microsoft, Toyota, Procter & Gamble, IBM and, finally, Amazon rounding out the rest of the list.
The last of three key findings were that roughly half of the corporations surveyed rated their effectiveness when it comes to getting products to market as “average” or “marginally effective.”
That fact was drilled home by the survey’s list of top R&D spenders. Toyota topped the R&D spenders list, coming in seventh among the most innovative companies. Apple and Google were not listed among the top 20 R&D spenders, even as they were named one and two, respectively, among the 10 most innovative. Samsung, meanwhile, was ranked the fourth most innovative and the sixth highest of the R&D spenders, rising from seventh place the year before.
“It’s not how much money you spend, but how effectively you spend it to make you innovative,” said Booz & Company Partner John Loehr during a phone interview. Loehr is the global leader of the firm’s innovation practice, specializing in automotive, industrial and aerospace companies.
Shortly after the survey’s release, it was reported that sales of Samsung’s Galaxy S3 smartphone had outpaced Apple’s popular iPhone 4S in the third quarter, although Apple’s iPhone 5 was expected to put that company back on top of the smartphone market in the next quarter. However, Apple also experienced a slip in its stock last week following an executive shake-up, while the latest iPhone, iPod and iPad releases have provided late night comedians ample fodder. (In the interest of full disclosure, I was among the customers who left her iPhone behind in October for a Galaxy S3 following the iPhone 5 release.)
While Loehr couldn’t speak to the company’s inner-workings, he definitely suspected Apple was cooking something up. The rumor mill is already churning as to whether Apple is in the midst of developing an iPhone 5S.
“They’re both phenomenally successful, but they both have different innovation models,” said Loehr of Apple and Samsung, going on to describe Apple as a “prototypical example of what we call a ‘need seeker’” — or a company that identifies un-met needs in the market and moves to satisfy them. Samsung, on the other hand, is a “market reader,” said Loehr. The term “fast follower,” he continued, has often been used to describe Samsung, but Loehr maintains the term gives the company “short shrift.”
“They’re waiting for something to be established in the market, and when it really takes off,” said Loehr, “they go after it and go after it aggressively.”
The strategy has proven advantages, said Loehr, citing Samsung’s strides in the television market. “Successful market readers tend to find technology alternatives,” said Loehr. Sometimes that path can be found in the lab, and other times in the courts.
“That’s part of the capability as a market reader,” he said.
The Washington Post Co.'s chairman and chief executive, Donald E. Graham, is a member of Facebook's board of directors.
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