The Innovation Index Annual Report - Chapter One

The Top 20 Innovators of The Innovation Index had a remarkable 2006 shaping out over 1,311 new innovations over the year, an average of 67 innovations per Innovator. The Top 20 Innovators created 805 new and enhanced products, 411 strategic collaborations and partnerships, and 95 new acquisitions. It’s safe to say that our Top 20 Innovators were busy in 2006 creating a plethora of new products, collaborations and acquisitions, and solid revenue growth.



The investors rewarded the Top 20 Innovators. Their combined market cap increased by 11% to $2.23 trillion from $2.01 trillion in 2006, an average increase of $11 billion per Innovator. Their combined stock performance gain: 13.2% in 2006, and a five year return of 119% (one stock invested per Innovator).



The normalized stock performance is even more impressive: 17.8% in 2006, and a five year return of 174% ($100 invested in each Innovator).

Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world


Innovation Leaders

Who led the year in stock performance, market cap growth, new products, collaborations and acquisitions? And who is the top Innovator – the Innovator of Innovators – of 2006? Not a single Innovator led across all categories.

Research In Motion (NASDAQ: RIMM) led all the Innovators with the best stock performance, gaining 94% for the year. America Movile (NYSE: AMX) and Cisco Systems (NASDAQ: CSCO) each gained 56% and 60% respectively in stock performance. Hewlett-Packard (HP) (NYSE: HPQ) had a great year as well, returning 45% for the year.

Cisco Systems led all the Innovators with the highest single year market capitalization gain: 62 billion in increased market cap. Microsoft Corporation (NASDAQ: MSFT) had a solid year in stock performance, gaining 16%, and increasing the market cap by 40 billion. HP went on a tear with 45% increase in stock price, gaining 34 billion in market cap. General Electric (NYSE: GE) also performed nicely, gaining 9% in stock performance, and increasing market cap by 33 billion.

But when it comes to new and enhanced product introductions, no one came close to IBM (NYSE: IBM). IBM introduced a whopping 130 new products in 2006. The next closest Innovators were Microsoft Corporation (NASDAQ: MSFT) and Hewlett-Packard tied with 75 new products each. Apple Inc. (NASDAQ: AAPL) kept up the innovation pipeline with 55 new introductions. The Top 20 Innovators averaged 40 new products per year.

Microsoft eked out Research In Motion in collaborations. The mighty Microsoft had 72 collaborations and partnerships over the year. If you believe this is a huge number, the upstart Research In Motion was extremely busy as well chalking out 70 new collaborations. Intel Corporation (NYSE: INTC) was next with 44 new collaborations, followed closely by IBM with 43 collaborations. The Top 20 Innovators averaged 21 collaborations per year.

GE led all Innovators with 20 new acquisitions. Three other Innovators had double-digit acquisitions: IBM with 14, 3M Company (NYSE: MMM) with 13 and Microsoft with 12. The Top Innovators averaged 6 acquisitions per year. However, many did not believe acquisition to be their top innovative strategy: Apple, Intel, Target Corporation (NYSE: TGT) and Southwest Airlines (NYSE: LUV) did not acquire a single company in 2006.

Who will be crowned the Top Innovator – the Innovator of Innovators – of 2006? Chapter Two of The Innovation Index Annual Report will unveil the The Top Innovator - The Innovator of Innovators - on January 16, 2007.

What did we learn from the Top 20 Innovators? What are the key insights gained from the top 20 Innovators, top Innovations introduced during 2006, lessons learned, 2007 projections, and observations on Disruptors challenging the top 20 Innovators? Chapter Three of The Innovation Index Annual Report - The Insights will be released on January 17, 2007.

About The Innovation Index

The Innovation Index introduced in December, 2006 is a weighted stock price index of the top 20 Innovators in North America.

The alphabetical list of the top 20 Innovators of The Innovation Index along with their stock ticker symbols are presented below:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movile - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)

The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.

The Innovation Index Annual Performance (Average):



An Investment of One Stock in each of Top 20 Innovators.

The Innovation Index Annual Performance (Normalized):



An Investment of $100 in each stock of each Innovator.

Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world

References:

Reuters Key Developments, Press Releases of Top 20 Innovators

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