Rick Martin · · 2 min readChina’s Baidu, Tencent Rank High on Forbes ‘100 Most Innovative Companies’ List
Photo: jp.techcrunch.com
Forbes has announced its list of the world’s 100 most innovative companies, and at first glance there are a number of big surprises. Looking past Salesforce, which took the top spot, one might be surprised to find Chinese search giant Baidu (NASDAQ:BIDU) at number five, and then flabbergasted to see Tencent (HKG:0700), which is widely known for its blatant copying, as the 11th most ‘innovative’ company.
Before we all throw our challenge flags [1], I should clarify that Forbes’s methodology doesn’t quite measure innovation directly, but rather it says it is measuring how much investors bid up a stock price above its existing value.
At a fundamental level, the reason investors bid a company’s stock price above the value of its current business is that they are expecting new growth. They are expecting new income streams to emerge in the future. Where does most growth come from? Primarily from launching new products or services, or entering new markets. This requires innovation.
Maybe so, but I think Tencent also requires an asterisk.
But in all fairness, both Baidu and Tencent do appear to have interesting plans for expansion [2], and in that sense I’m sure anyone who invests in them will do well. Baidu’s big plans for mobile, even if a little delayed, are promising indications that the company’s success on the web can continue on mobile.
In total, China had seven companies in Forbes’s top 100.
Looking east to Japan, where eight companies made the list, Rakuten (JSD:4755) showed well in seventh place on the innovation rankings. While I don’t know if there are any technical innovations from Rakuten that really stand out in my mind, I do like its expansion plans as well, particularly its strategy of acquisitions and sharing know-how and feedback between regions. Nintendo, who hasn’t really innovated much of anything since Wii [3], is ranked 45th.
As for other Asian companies on the list, India had five companies ranked, including Infosys. Surprisingly, no South Korean companies made the cut.
Apple and Google were ranked 24th and 26th respectively.
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Football metaphor to mark opening day? Check. ↩
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It was interesting to contrast their respective efforts in Vietnam, during a time when political relations between China and Vietnam were tense due to (another) island dispute. Baidu put up a test site and was immediately met with a public backlash. In contrast, Tencent has quietly push its WeChat app there without any tell-tale markings or indications that it is associated with China, or indeed with Tencent itself (or at least none that I can see). ↩
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