Forbes released its seventh annual list of The World’s Most Innovative Companies, and this year the list is unpredictable and full of surprises.
After two consecutive years in second place, Salesforce overtook Tesla Motors, snagging the top spot as the world’s most innovative company, a title Salesforce held from the list’s inception in 2011 to 2015. Amazon leaped eight spots, emerging as No. 3 this year.
The World’s Most Innovative Companies list showcases how new players shake up industries, innovate, and garner the attention of investors. Notable newcomers to this year’s list include Pandora (No. 75), Ulta Beauty (No. 34), Constellation Software (No. 22), and GenMab (No. 39).
Procter and Gamble (No. 89), Anheuser Busch (No. 54), Intuit (No. 66), Yahoo Japan (No. 84), and Pepsico (No. 95) made a comeback this year, returning to the top 100.
Six companies from Asia (including China, India, Indonesia, and Korea) entered the top 20, reflecting a deeper distribution of innovation capability around the world.
The World’s Most Innovative Companies list consists of firms that analysts and investors feel are most likely to come up with the next big innovation. Companies are ranked by their “innovation premium.”
The innovation premium refers to the difference between their market capitalization and the net present value of cashflow from existing businesses. This difference is the bonus given by equity investors on the educated hunch that the company will continue to come up with profitable new growth.
The prerequisites to be featured on this list are that the firms need seven years of financial data and at least $10 billion in market cap.