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Expiration Date: What is the Lifespan of Innovation?

Innovation disrupts the marketplace, revolutionizes markets and consumer habits, and can be extremely profitable. But, nothing lasts forever. So, what is the longevity of innovation? Academics from INSEAD, Credit Suisse’s HOLT, and BYU defined innovative metrics and tracked the history of giants like Microsoft, Procter & Gamble, PepsiCo and L’Oreal according to Forbes. Out of hundreds of companies, only 14 remained in the top 75 from 1995 to 2011.

Nothing lasts forever, and innovation is no different.  This isn’t surprising considering the rate at which the business landscape changes.  An article for Forbes details a report done by academics from INSEAD, Credit Suisse’s HOLT, and BYU that charted the innovative patterns of major companies from 1995 until 2010.  The results of this study indicate that innovation is extremely difficult to maintain.  Of hundreds of companies who were analyzed in 1995, only 14 remained in the top 75 of current innovators in 2010. The most innovative companies, as reported by Forbes, can be found here. The top 10 are:

  1. Salesforce.com
  2. Amazon.com
  3. Intuitive Surgical
  4. Tencent Holdings
  5. Apple
  6. Hindustan Unilever
  7. Google
  8. Natura Cosmeticos
  9. Bharat Heavy Electricals
  10. Monsanto

Forbes follows Microsoft, SAP AG, and Procter & Gamble for the 15 years of the study.  Procter & Gamble was one of the few companies able to climb in the innovative ranking, and it placed in 2010’s top 25. Microsoft topped the list in 1995, but fell heavily and was ranked 86th in 2010. SAP also was near the top in 1995 and fell to 63rd in 2010.  Loss of innovative power for these two companies occurred at different times, but it seems that both companies’ reinvestment in themselves dropped, and that drop caused a decrease in innovation as well. That reinvestment had fueled innovative growth.

Read: How Long Does Innovation Last?
Read: The World’s Most Innovative Companies

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