Almost half of the companies on the list have generated more than 30pc
of sales from innovations that occurred in the prior three years, the
respondents said.

Two thirds added they are spending more on innovation this year than in 2013,
while some revealed that their best ideas had come from analysing social
media trends.

The ones which are most successful put all their focus on one or two projects
at a time, the report noted.

“Too many companies want to shoot for the moon while their innovation programs
are barely airborne,” said Kim Wagner, a BCG senior partner and co-author of
the report. “Breakthrough innovators are especially effective at bringing
together the pieces required for radical innovation and organising them for
high impact.”

Top 20 innovative companies in the world:

Since BCG’s 2013 report, the biggest change has been in the automotive sector.
Carmakers reported a 26pc decline in innovation priority as they look
to cut costs, and there are just nine in the top 50, down from 14
a year ago.

Tesla at number seven is bucking the trend. The firm has recently announced a
number of new innovations and has said it will not sue other electric-car
makers that use its technologies “in good faith.” It hopes that by removing
obstacles, this will accelerate the growth of the electric car market, which
currently accounts for around 2pc of cars sold overall.

Tesla wants to overturn the car market with its electric vehicles

At number one, Apple has taken the title of the World’s Most Innovative
Company for the ninth consecutive year. Last month, the firm had its biggest
product launch in recent history where it unveiled the iPhone 6 and iPhone 6
Plus, alongside the Apple Watch and Apple Pay, the company’s take on a
digital wallet.

Unilever, the only UK entry, has introduced innovations such as compressed
deodorants in the last year, reducing carbon emissions by 25pc.

BCG also praised Amazon, which has changed its business model many times since
launching in 1994 and has become a one-stop shop for anything on the web.
The company has built one of the biggest and most valuable databases of
consumer information based on its 150m customer accounts.

“It is the one retailer that all others in the retail and
consumer-packaged-goods sectors must take into account when planning their
future strategy,” the report noted.

The best innovative firms use the company as a new-idea laboratory, it added.
Apple under the late Steve Jobs is perhaps the best-known example. Google’s
policy of encouraging employees to spend 20pc of their time working on their
own ideas is another. Minnesota-based manufacturing company 3M allows its
employees to spend up to 15pc of their time working on their own projects.

What makes an innovative company?

• Use of internal and external sources of knowledge, and a
dedicated budget for venturing and testing concepts

• A focus on releasing products that customers need rather than
pushing new technologies simply because they are novel

• They embrace and manage failure, leading to strong performance.