The World's Most Innovative Companies

By: Mark Borden, Bill Breen, Jeff Chu, Josh Dean, Rebecca Fannin, Amy Feldman, Charles Fishman, Paul Hochman, David Kushner, Mark Lacter, Robert Levine ,David Lidsky, Ellen McGirt, Danielle Sacks, Chuck Salter, Elizabeth Svoboda, Linda TischlerThu Feb 14, 2008 at 6:35 PM

Eric Ryan and Adam Lowry of Method | photo by Suzy Poling

We canvassed the experts, analyzed the products, and crunched the numbers. From visionary upstarts to storied stalwarts, here are companies that dazzle with new ideas -- and prove beyond a doubt how business is a force for change. We call them the Fast 50.

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Eclipse Aviation

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Courtesy of Nokia

#1 Google

The faces and voices of the world's most innovative company.

#2 APPLE

Careful readers of this magazine may be scratching their heads right now, in light of our recent cover story laying out the many challenges facing Apple. But the company has had, indisputably, one hell of a run. In the past year alone, three major new products -- iPhone, iPod Touch, and Leopard OS -- fueled triple-digit revenue growth. So while analysts forecast a more earthbound Apple in 2008, it deserves praise. And extra points for style.

#3 FACEBOOK

In 2007, the social-networking juggernaut had variously impressed with its ability to reinvent the wheel (opening its platform to outside developers) and drawn cyberpickets with its boneheaded missteps (trying to sell advertising by telegraphing its users' every move). But after a year lived dangerously, Facebook is officially A-list, with a $15 billion valuation to boot, thanks to Microsoft's $240 million investment. That's nothing to throw a sheep at.

#4 GE

GE makes our list not on reputation but on the strength of its breakthrough products. Among them: an HD CT scanner that reduces radiation exposure by half, a reengineering of the best-selling CF34 jet engine for the booming Chinese aviation market, and a hybrid locomotive that cuts emissions by 50% -- evidence that Ecomagination is more than just marketing babble. Coming up, commercially viable OLED lighting by 2010.

#5 IDEO

Nobody can accuse the Palo Alto -- based design firm of taking on easy clients in 2007. The CDC asked Ideo to help tackle childhood obesity; the Acumen Fund enlisted the shop to collaborate on delivering clean water in the developing world; and the Red Cross hired it to help encourage blood donations. "As social issues increasingly become business issues," says Ideo CEO Tim Brown, "this will be a critical new direction for design." Of course, there were awards too. The company's designs for the Eclipse 500 Very Light Jet cabin and cockpit instrument panel won IDEA Gold medals, as did its LCD monitor for Samsung. But it was Ideo's "Keep the Change" campaign for Bank of America that had perhaps the most impact. Based on research showing that boomer women with kids tend to round up their financial transactions, Ideo developed a service that rounds up debit card purchases to the nearest dollar, then transfers the monetary difference from the customer's checking account to her savings. In its first year, 2.5 million customers signed up.

#6 NIKE

You expect fancy footwear from Nike. But its latest masterstroke is social networking, online and off. From events to the Web to unique retail hubs, Nike is blurring the line between brand and experience.Mark Borden

Read More: Consumer Experiences and Consumer Products

#7 NOKIA

Once a maker of wood products and tires, the Finnish firm has thrived in the wireless world. Today, Nokia has a 37% (and growing) share of the global cell-phone market, more than twice that of its closest competitor, Motorola. How? A two-tiered design process that identifies the “remarkable similarities in what global consumers want and need in their mobile devices,” says senior design manager Rhys Newman, then adds local insight. Bright colors are key to success in India, China, and the Middle East, “where a phone can show status,” he says. Markets with low literacy rates get phones without written menus. The company’s next challenge is to gain momentum in the U.S., where it has less than 10% of the market. It’s betting big on the feature-rich N95 smartphone -- and a strategy of welcoming third-party apps.

#8 ALIBABA

From Issue 123 | March 2008

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Recent Comments | 64 Total

February 17, 2008 at 6:48pm by john ralston

sorry if this is a repeat - not sure the last post went thru.

I was surprised to see Prosper in this article for several reasons. Among them is high default rates - below is information from Prosper's site showing that defaults are 4.24% for the highest rated borrowers and 45% for the lowest rated borrowers (note actual default rates will be higher since some of these loans are only six months old).

Prosper, unlike other 2.0 firms, has squelched input from the community by deleting all the old forum postings and putting in a new process that screens all comments. Screening is usually fine, but many posts do not make it thru - seems like Prosper does not want its community to be engaged.

Here are the stats - hopefully they will make sense with this cut/paste...

Estimated ROI Help
Performance metric AA A B C D E HR
Average lender rate 10.74% 12.69% 15.05% 17.78% 20.81% 24.03% 23.80%
Net defaults -4.24% -7.01% -11.72% -15.63% -19.09% -29.65% -45.55%
Adjustment (interest and fees) -0.22% -0.43% -0.76% -1.21% -1.72% -2.85% -4.29%
Prosper servicing fee -0.49% -0.48% -0.70% -0.68% -0.67% -0.56% -0.53%
Average annual return 5.80% 4.77% 1.87% 0.25% -0.67% -9.02% -26.58%

Sorry this is not more positive, but I want to make sure you had perspective from someone who has been (was) a long term lender on Prosper.

John R.