Forbes releases 8th annual listof the most innovative companies

NEW YORK: Forbes released its eighth annual list of The World’s 100 Most Innovative Companies. The list demonstrates creative disruption and how new players come in, innovate and garner the attention of investors. Cloud computing company ServiceNow debuts on the list at No. 1, seizing the title of the World’s Most Innovative Company of 2018. Another newcomer, Workday, comes in at No. 2, and former top-ranked Salesforce falls to No. 3. Salesforce had been ranked No. 1 from the list’s inception in 2011 to 2015 and in 2017. Rounding out the top five are Tesla (No. 4) and Amazon.com (No. 5).

“Innovation is as hard to define as it is to do successfully but we’ve figured out how to determine who’s winning at it by calculating an ‘Innovator’s Premium’ that gauges which companies are best able to capitalize on investors’ confidence in their creativity and inventiveness,” said Fred Allen, Forbes senior editor, leadership. “This year, we see that digital transformation is where it’s at: The top three finishers No. 1 ServiceNow, No. 2 Workday, and No. 3 Salesforce all focus on that at the heart of what they do.”

The cover story, Tech’s Ultimate Second Act, features Fred Luddy, Founder and CEO of cloud company ServiceNow. Facing 50, Luddy lost his job and his fortune. But in applying the lessons of his failures, he made ServiceNow the most innovative company in America and himself a late-career billionaire. Today, ServiceNow maintains a $30 billion market cap with 2017 revenues of $1.93 billion and is expected to grow more than 30% this year. Methodology: The World’s Most Innovative Companies list consists of firms that investors feel are most likely to come up with the next big innovation. Companies are ranked by their innovation premium: the difference between their market capitalization and the net present value of cash flows from existing businesses (based on a proprietary algorithm from Credit Suisse HOLT). The difference between them is the bonus given by equity investors on the educated hunch that the company will continue to come up with profitable new growth. To be included on the list, firms need seven years of financial data and $10 billion in market cap.