Innovation tops agenda: 95% of Indian firms list it in top 3 priorities
Boston Consulting Group (BCG)
reveals that innovation resilience is a defining trait of high-performing firms. The report, titled
Most Innovative Companies 2025: In Disruptive Times, the Resilient Win
, explores insights from two decades of BCG's innovation research.
Based on an analysis of the firms that have appeared on BCG's annual 50 Most Innovative Companies lists since 2005, the report found a strong link between long-term innovation excellence and total shareholder return (TSR). Top innovators outperformed the broader market by 2.4 percentage points annually on average, with particularly strong gains during the Great Recession and the COVID-19 pandemic.
Yet while innovation has remained a top-three priority for 64% to 83% firms every year, many companies aren't up to the task. From 2021 to 2024, the proportion of executives who said that they see their companies as innovation leaders declined by 24 percentage points. And despite continued high R&D spending, the report found no consistent link between R&D investment and TSR.
'The ability to innovate through adversity is what separates exceptional companies from the rest,' said
Justin Manly
, a BCG managing director and senior partner and a coauthor of the report. 'R&D spending alone isn't enough. What matters most is investing in the right initiatives and capabilities to turn uncertainty into opportunity.'
Asian innovators gain prominence, europe falters
China & India leads in innovation prioritization with 95% of its respondents reporting innovation as a top three priority in 2024—the most of any region apart from India, which also came in at 95%. In 2005, no Chinese companies appeared in BCG's top 50 ranking. By 2023, Chinese companies held 8 of the 50 slots (16% of the total list)—including 2 of the top 10. Meanwhile, since 2005, North American companies have seen their share fall from nearly three-quarters of the list to about half, although they still represent two-thirds of all serial innovators—firms that have ranked on the list 10 or more times.
In contrast, European companies have had less staying power. European companies typically rank lower on the top 50 list, and Europe also accounts for the highest share of companies that have appeared on the list only once. Compared to other regions, Europe's most innovative companies tend to skew toward industrial sectors such as automotive and pharma, rather than technology.
Digital maturity defines today's innovation leaders
Digital maturity has become table stakes for innovation success. BCG's analysis of corporate earnings call transcripts found that mentions of digital innovation doubled from 2005 to 2024. The 25 serial innovators that have ranked 10+ times in the top 50 referenced digital topics nearly four times as often as their peers did.
Nevertheless, digital innovation excellence remains a moving target. In 2024, AI and GenAI captured more than 80% of all venture capital investment. And agentic AI is set to raise the innovation bar again.
A new C-suite agenda for innovation
As companies face increased geopolitical uncertainty, the report outlines four questions to help business leaders prepare for a potential post-globalization world:
Ambition. How do we adjust our innovation targets as profit pools shift? Portfolio. Which projects should we prioritize, redesign, or discontinue to reduce exposure or tap into new opportunities?Talent. What talent constraints or opportunities are likely to arise? Footprint. Do our innovation centers need reshaping to build resilience?
'The best innovators don't just weather the storm—they redesign the ship while sailing through it,' said
Amy MacDougall
, a BCG partner and a coauthor of the report. 'This is the moment for bold action to future-proof innovation systems.'>
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