Who's Winning the Innovation Race? New 20-Year Analysis Points to What Matters Most

• BCG's 19th Annual Innovation Study Shows Innovators Outperform the Broader Market, Especially in Periods of Crisis
• Analysis of BCG's Top 50 Most Innovative Companies Over Two Decades Reveals That Chinese Firms Have Gained Prominence While Europe Underperforms
• Digital Innovation Excellence Separates Leaders from Laggards, and Agentic AI Will Only Raise the Stakes
• Geopolitical Shifts Demand New C-Suite Innovation Strategies

BOSTON, June 26, 2025 /PRNewswire/ -- Amid ongoing economic and geopolitical turbulence, a new report from 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."

Chinese Innovators Gain Prominence, Europe Falters

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."

Download a copy of the report here:
https://www.bcg.com/publications/2025/in-disruptive-times-resilient-win

Media Contact:
Eric Gregoire
+1 617 850 3783
gregoire.eric@bcg.com 

About Boston Consulting Group
Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact.

Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.

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SOURCE Boston Consulting Group (BCG)