[Get a 10% discount on ARM TechCon 2012 conference passes by using promo code EDIT. Click here to learn about the show and register.]
How many electronics companies from our world made it? Two: Agilent
(No. 82) and Danaher (No. 99).
Out of 100 companies.
Did they only get to "D" in the alphabet?
Pull ARM out of the mix, and companies that make expensive lattes, chocolate, soap,
beer and breakfast for little kids fared better than companies in
our world. Really? Want to change your innovation culture? Look to
Cheerios and Lucky Charms for insight and grab a Bud while you're at
The future ferments on engineering benches and in fabs that produce
things so precise, so small you need multimillion-dollar microscopes
to see them. The industry continually scrapes the physics wall in
the race to tomorrow and figures out ways to dart around Moore's Law. And
yet just a handful are considered innovative. (Insert gnashing of teeth,
renting of garments here).
Turns out, the Forbes
methodology skews heavily toward finance and doesn't
take into consideration non-public companies:
We use something called the Innovation Premium to
compile our list. It is calculated first by projecting a
company’s income (cash flows, in this case) from existing
businesses, plus anticipated growth from those businesses, and
look at the net present value (NPV) of those cash flows. We
compare the NPV of cash flows from existing businesses with a
current market capitalization: Companies with a current market
cap above the NPV of cash flows have an innovation premium built
into their stock.
Of course a true innovation index is essentially impossible
calculate because the word itself and its metrics are spongy, but
c'mon, guys, how about some serious love?
Taking nothing away from the
excellent work the executive teams and employees at ARM, Altera, Agilent and Danaher have
done over the past decade: No Intel? No TSMC? (Not to mention the
industry's crucial enablers, Synopsys, Mentor and Cadence)? No IBM?
Sigh. What are you gonna do? Ours is an industry that, like Willie Mays,
made difficult things look easy, and it gets no respect.