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Center for Global Innovation Develops
Index of Innovative Companies

A study from the USC Marshall Center for Global Innovation co-authored by Gerard Tellis, Professor and Director of the Center and Andreas Eisingerich Assistant Professor at Imperial College London, has developed an index of innovative firms. Portfolios of top firms on this index appear to perform better than the S&P 500 in up markets and almost as well in down markets. The superior performance comes without excessive risk.

"The results suggest that innovation is a valid criterion of portfolio formation, just as the current criteria of size, value, growth, and price," said Tellis.

The study's sample is drawn from Fortune's list of the 300 largest US firms and Business Week's list of the 100 most innovative firms, between 2004 and 2008. The innovation index is based on five metrics that use objective market data as opposed to polling. All data are collected from public market sources by two independent research assistants under supervision of a statistician.

"Polls suffer from the tyranny of hype" says Tellis, "Names that get early recognition get greater visibility in the press, which accentuates their popularity, leading to a positive cascade in their favor."

"A crucial aspect of this index is the link between innovation measured on this index and current and future financial performance," says Tellis.

The superior performance holds not only in current year performance but also in one-year-ahead performance. "The ultimate test of an index is whether it can predict stock market performance a year ahead," says Eisingerich. For example:

  • In the five years between 2004 and 2008, an annual paper investment of $10,000 in a portfolio of top 20 firms in the Index yields a cumulative return that is 46% higher than the S&P 500 for concurrent years
  • For one-year-ahead performance the increase in returns is 23% for the top 20 portfolio over the S&P 500

The authors are updating the study to include 2009 and 2010 data and plan to test the performance of the index on real investments.

The full-report and details of the findings are available at the Center's website http://www.marshall.usc.edu/cgi/innovation.

Details of the method, metrics, & ranking of firms by year are available from the Center at innovation@marshall.usc.edu

 

Innovating in a Global Environment

March 17-18, 2011
University of Southern California
Los Angeles, California

Registration and Hotel Deadline: February 14

With the rise of new global players, innovation is no longer the exclusive domain of a few developed countries. Rather, new business models, processes, and offers (goods, services, solutions, and applications) will also flow from developing to developed economies, creating or disrupting markets, shifting product-market boundaries, and altering competitive structures. Increasingly, innovation efforts will be organized to leverage global insights and resources beyond the corporate headquarters, and new offers may be introduced in multiple markets simultaneously. These changes call for new strategies to develop, market, and diffuse innovations globally. Thought leaders from business and academia will explore these and other ways that the global environment is shaping innovation processes, strategies, and outcomes.

This conference, co-sponsored with the Center for Global Innovation, USC Marshall School of Business, will be held at the University of Southern California.

AGENDA AND REGISTRATION

For more information, including agenda and registration, please open the attached document or visit our website at: http://www.msi.org/conferences/conferences.cfm?conf=118.

SPEAKERS TO DATE

• John Seely Brown, Visiting Scholar, USC; Former Chief Scientist, Xerox
• Barry Bayus, Rodwell Distinguished Professor of Marketing, University of North Carolina
• Dondeena Bradley, Vice President Global Nutrition, PepsiCo
• Rohit Deshpandé, S. S. Kresge Professor of Marketing, Harvard Business School
• Steve Liguori, Executive Director Global Marketing, General Electric Company
• Roberto Reniero, Center Head of R&D Solon, Nestlé
• Gerard J. Tellis, Director of Center for Global Innovation, University of Southern California
• Kirk Ward, Global Head of Product Development & Innovation, TNS
• Om Narasimhan, Associate Professor, University of Minnesota

HOTEL ACCOMMODATIONS

Please make your hotel reservations by calling The Omni Los Angeles Hotel at California Plaza at (800) 843-6664 by February 14. To receive the group rate of $189 please be sure to mention "MSI." Rooms are limited. For your reference, below is general contact information for the hotel.

The Omni Los Angeles Hotel at California Plaza
251 South Olive Street
Los Angeles, California 90012
Phone: (213) 617-3300

www.omnihotels.com

Should you have any questions, please e-mail meetings@msi.org .

We hope to see you in March!

For more information,visit our website at: http://www.msi.org/conferences/conferences.cfm?conf=118.
You can view the agenda at: click here