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  • The World's Most Innovative Companies 2014

    If you Google the phrase "faith-based businesses," the results point to companies that pursue a religious agenda. But there's another kind of faith in business: the belief that a product or service can radically remake an industry, change consumer habits, challenge economic assumptions. Proof for such innovative leaps is thin, payoffs are long in coming (if they come at all), and doubting Thomases abound. Today, pundits fret about an innovation bubble. Some overvalued companies and overhyped inventions will eventually tumble and money will be lost. Yet breakthrough progress often requires wide-eyed hope.

    In this special report on the World's Most Innovative Companies, there are plenty of examples to make you a believer ("I've never been more excited about the possibilities ahead of us," Nike CEO Mark Parker recently told me). Our staff has spent more than six months gathering and analyzing data. To generate our list of the 50 Most Innovative Companies—and the accompanying top 10 companies in various sectors—we assessed thousands of enterprises. From all that work, I've pulled out 12 rising trends. Risk of failure and collapse are always with us. But the culture of innovation across the globe is more robust than ever. We think that's worth celebrating.

    Continue scrolling to see this year's complete list.

  • Google

    The most successful Internet company of our time turns 16 this year. Much like a teenager trying on various identities, it's determined to be more than a search engine, although Google is best known for that deceptively simple function, and more than an advertising platform, although the vast majority of its revenue comes from ads.

    As the cost per click—the rate advertisers pay for an online ad—continues declining, Google is pursuing projects that could reinvent the company—and society. For its breadth, ambition, and relentless spirit to keep creating the future, Google tops our 2014 list of the Most Innovative Companies in business. This is the second time that Google has earned the No. 1 spot. The last time was in 2008.

    Many of its current projects or milestones are life-changing, or aim to be:

    Calico, a spin-off company, working to extend the human lifespan.

    Google’s autonomous vehicles, which reached the 500,000 driver-free mile benchmark—incident-free.

    Google Fiber, which is bringing gigabit Internet service to Austin, Texas, and Provo, Utah, inspiring Los Angeles and Louisville, Kentucky, to follow.

    And much of Google’s work changes our daily lives through shear convenience:

    Glass, which is making wearables the next computing trend.

    Shopping Express, an experiment in same-day delivery with national and local retailers.

    Google Now, which reminds users when their favorite band or author has a new release and when the last train is leaving—before it's too late.

    As we said, there are too many to count. But we tried. Click here for our complete list.

    [Photo by Jason Pietra]

  • Bloomberg Philanthropies

    With $452 million distributed in 2013, Bloomberg Philanthropies is among the largest foundations in the United States, but it distinguishes itself by acting as its namesake, Michael Bloomberg, does—with sophisticated, data-driven solutions for every step of the process, from identifying priorities to monitoring progress to scaling pragmatic solutions. As a result, the foundation has been extraordinarily effective.

    Bloomberg data wonks have ranked the top 10 global causes of death. By focusing on tobacco control, they address 60% of deaths on the list. And by concentrating on the countries that together contained two-thirds of the world's smokers, Bloomberg positions itself for maximum impact.

    The foundation also spurs others to innovate. Its inaugural Mayors Challenge last year challenged U.S. cities to come up with solutions that could be applied throughout the country or the world. Chicago, one of five winners, received $1 million to implement an open-source, real-time analytics platform. By looking for trends in the city's daily 7 million new data points, it acts as an early-warning system, enabling officials to be proactive about health care, weather, and traffic emergencies. This year, Bloomberg's ideas competition is for European cities.

    In January, data pointed the foundation to a new area. Bloomberg committed $53 million over five years to take on overfishing in Brazil, the Philippines, and Chile. This is the largest philanthropic effort yet to reform the management of international fisheries. The goal is rejuvenating 7% of the world's fisheries and, more importantly, creating a model to protect the threatened global fish supply anywhere it's needed.

    To learn more about how Bloomberg Philanthropies uses data to drive its local efforts, click here.

    [Illustrations by Carolin Wanitzek]

  • Xiaomi

    The upstart consumer-electronics company, just three years old, is a neophyte no more. Xiaomi released four new smartphones last year and sold almost 19 million, up more than 150% from 2012. It's staking out a significant piece of the Chinese market with its low-cost, feature-rich devices. One model sold out its initial run—100,000 units—in less than two minutes.

    Although founder Lei Jun is reflexively compared to Steve Jobs, Jun's strategy is hardly the same as Apple's: He sells his phones—in buzz-generating flash sales—at a razor-thin margin and then takes advantage of the longer potential revenue stream from software. (Another difference: Xiaomi actually shipped its smart TV in 2013.)

    Last year, revenue at the Chinese startup hit $5.2 billion, another 150% bump, as users downloaded more than 1 billion apps, helping the company generate revenue from paid apps, games, advertising, and other fee-based services. Jun's goal is to sell 40 million devices this year, pushing into India, Southeast Asia, and other emerging markets where the battle for the next wave of smartphone users will be waged.

    Helping lead that global expansion is a high-profile recent hire, former Google product star Hugo Barra. Given how important Google and its Android platform are to Xiaomi's plans, he represents a major coup.

    [Illustration by Ollanski]

  • Dropbox

    Dropbox doubled its users last year, from 100 million to 200 million. How? By constantly expanding itself into people's digital lives (while fending off the likes of Apple, Google, Microsoft, and others). "We want you to be able to say, 'I know where all my information is—it's in Dropbox. Everywhere I go, whatever device, whatever application, I know that I can pull things out of it,'" says product manager Sean Lynch.

    That convenience is the result of several new tools, such as Saver and Chooser. These make it easy for any app (Yahoo Mail is a big one) to integrate with Dropbox, letting users save or retrieve files directly through Dropbox. Its new Datastore service syncs app data among multiple devices—meaning if you're playing a game on an iPad, you can switch over to a smartphone and resume at the same point.

    Once marketed primarily to consumers, Dropbox has begun to court business users by adding project-management features for workplace teams. In November, it launched a new product that allows users to access personal and business storage from within the same account and allows employers to prevent unauthorized file sharing. For now, Dropbox remains private, supported by a who's who of venture capital firms—and valued at $10 billion.

    [Illustration by Mick Marston]

  • Netflix

    What does it mean to be an innovator? Our editors debated many companies—and and throughout the list, we're running some of their discussions. This is how we settled on Netflix.

    NAY: I get it—Netflix shows are good. So? HBO has been making good shows for years.

    YEA: You miss the point. ­Original programming creates leverage with studios to get premium content like The Avengers.

    NAY: That didn't stop it from ­losing the rights to 90-odd titles in 2013, including Titanic. The irony!

    YEA: Netflix isn't sinking—it's ­making waves. It has turned the TV network into an app, ­available on any device. Every channel, plus Amazon and Yahoo, are now following.

    NAY: Like HBO Go, which came out three years ago?

    YEA: Go was HBO's Netflix. This isn't just about delivery; it's about content. Rivals, including HBO, are mimicking Netflix by ordering series made for binge-watching. It's the era of the 13-hour movie, no cliff-hangers or act breaks required.

    NAY: House of Cards and Orange Is the New Black had cliff-hangers.

    YEA: The better to make you binge-watch. Arrested Development didn't, though. It was the kind of thing only Netflix could pull off. Form-breaking TV is just getting started.

    NAY: Maybe I'm angry because I still pay for cable.

    Conclusion: Yea!
    Successfully applying a proven model in a new context is innovative. Netflix added its own bravura to the cable-TV formula of growing through original programming, along the way strengthening its business, creating new freedom for TV showrunners, and cementing binge-viewing into the cultural landscape.

    [Illustration by Richard Perez]

  • Airbnb

    By this summer, Airbnb will usurp the InterContinental Hotels Group and Hilton Worldwide as the world's largest hotel chain—without owning a single hotel. The startup, which allows users to rent out their spare rooms or vacant homes to strangers, surpassed 10 million stays on its platform last year, doubled its listings to 550,000 (in 192 countries), and, according to a source familiar with the company's business, tripled revenue to an estimated $250 million. Befitting its growing might, last fall CEO Brian Chesky poached boutique-hotel pioneer Chip Conley to be Airbnb's head of global hospitality. Already, Conley has created a baseline of nine standards of care for Airbnb hosts to follow as part of a bigger revamp of its mobile tools. And it all starts with design, chief product officer Joe Gebbia told Fast Company last October, "We encourage employees to ship new features on day one. One new designer decided to change the icon used to favorite a listing from a star to a heart. This little change increased engagement by more than 30% and inspired a new product, Wish Lists." Rather than just include design in the boardroom, Airbnb's mentality is "What if design ran the boardroom?"

    [Illustration by Mick Marston]

  • Nike

    Nike's most exciting new product last year wasn't a LeBron James sneaker (although the 11s are pretty sweet). It was an app called Making that helps companies measure the environmental impact of using different materials—which made up approximately 60% of Nike's footprint and spurred the creation of the app. "Before, if you asked, 'Which is better, hemp or cotton?' nobody had that at hand," says Hannah Jones, Nike's VP of sustainable business and innovation. "We created this enormous database of materials and turned it into an index for the entire industry." Released last summer, the app evolved out of Nike's push to eliminate the use of hazardous chemicals in the creation of its products by 2020 and has been incorporated into the curriculum at two design schools and downloaded in 23 countries.

    The company also expanded its ambitious Launch program, which it created with NASA and the State Department. Hundreds of key players in the materials ecosystem come together to discover, incubate, and accelerate companies developing innovative materials to be used on a wide scale to address global issues in the space. "Sustainability can't be just a single product line," says Jones. "It has to be across everything we do."

    [Illustration by Ollanski]

  • ZipDial

    In India, friends intentionally call each other, let it ring once or twice, and hang up. That's their way of sending a signal, like "I'm home safe," without being charged for a call in a country with pricey telecommunications and limited Internet accessibility. California native Valerie Wagoner moved to Bangalore, noticed the missed calls, and is now responsible for 416 million of them: That's how many times people have used her company, ZipDial, to connect with brands including Gillette, Disney, Procter & Gamble, and IndiaInfoLine.

    It works like this: She issues the brand a number, which it prints on its ads. Consumers call, hang up, and get a text or call in return—and thus are entered in contests, receive coupons, or place an order. In 2013, she expanded to Sri Lanka and Bangladesh, and is now setting up in Indonesia, Singapore, and the Philippines.

    "Half the world's population needs a better, more accessible mobile experience," Wagoner says. She was once part of eBay's international marketing team, but wanted to be truly involved in emerging markets—and knew she couldn't do that from the Bay Area. "I was a rare entity, a foreigner and a woman running a startup," she says of her early, rough start. "I didn't know the right jokes in Hindi or come from somebody's hometown, but I knew when to wear a sari."

    [Photo by Shavonne Wong]


    As a 25-year-old first-year social studies teacher at a public school in the Bronx, Charles Best saw firsthand the need for classroom materials for low-income students. With few technical skills, he nonetheless managed to launch in 2000. It was an early and popular example of online crowdfunding. The site allows donors to pick an individual class or project on DonorsChoose and support it directly for as little as $1. Once a project is funded, the charity purchases the supplies and sends them to the teacher.

    Since then, DonorsChoose has evolved into an education juggernaut. It has raised $225 million from some 1.2 million citizen philanthropists. Those donations have helped more than 175,000 teachers, funding more than 400,000 class projects. The number of students who have benefited is staggering: 10 million and counting.

    With an impressive list of supporters—Bill and Melinda Gates, Sheryl Sandberg, and Stephen Colbert, among others—Best, the founder and CEO, is exploring other ways of tapping the power of the DonorsChoose crowd to improve public education. Funding classes in science and programming. Providing and improving students' access to technology. Giving teachers more of a voice in the ongoing education debate, where politicians, administrators, and consultants all too often speak for them. "Teachers know how to improve education," Best says, "but they are a voice that is consistently overlooked or ignored."

    [Photo by Daniel Shea]