The innovation 40

1. Apple
Apple’s design values – clean, minimal, user-friendly industrial design – have given it massive appeal and catapulted the brand to heights unimagined 10 years ago. Many mistakenly think Apple’s comeback is down to inspirational (and he is an inspirational figure) boss Steve Jobs. Actually, much of the credit is also down to Brit designer Jonathan Ive, senior vice president of design, whose stunning hardware – iMac, iPhone, iPod, iPad – have been the backbone of this rebellious company’s success in the last seven years. These products have also redefined the markets that they sell in. Very simply, they’re the gold standard, no question. But Apple has competition. Google is increasingly making in-roads to Android developers (Google’s open-source approach has been a big hit with many). However Google only decided recently to design its own mobile devices, buying much of the hardware from outside. In contrast, Apple has learnt from its past mistakes and has got much better in rewarding developers these days than before. But developers do not want to continue writing two pieces of code. Unquestionably, Apple remains in a commanding position as master of mobile devices, which is where the action is. It has successfully distanced itself from reliance on PCs. Apple also knows that the Internet is not just a platform but an operating system. Apple has a consistent story to tell consumers and its product pipeline commands demand, loyalty and even lust. When, exactly, did a tool simply become something rather more than a tool? Jonathan Ives and Steve Jobs plainly have a lot to answer for. Meanwhile, it’s rumoured Apple is now building its own alternative to Adobe’s Flash software. Any downsides? Apple has made a lot of enemies – like Adobe – on its journey to the top. It is a company with a lot of (deserved) pride. But it has to take some knocks at some point. But when?

2. Amazon
Bookshop, DVDs, video games. From underwear to garden spades and toys. Increasingly Amazon is selling book titles through its new Kindle, an e-book launched in 2007 that downloads content through the Internet. Although Kindle has been a considerable success, it now faces massive competition from Apple’s new iPod (which sold one million units within 30 days of launch). Other devices will also give Kindle tough competition in future. But Amazon have been clever: like Apple with iTunes, it has managed to integrate its e-book directly into its website. A neat move. The move towards a paperless world continues. But Google is soon to launch its own e-book store this summer (though there are also big issues around publishing digitized content). Currently Amazon controls around 60 percent of the e-book market, but expect this share to slip markedly in future. Just how Amazon intends to fight back is unclear. The big drawback with Kindle is that – in its current format – it remains just an e-book. An iPad, in comparison, is rather more – games, movies, browsing. So Jeff Bezos and his team need to up their game soon. But it would be dangerous to underestimate Team Amazon. It’s possible that they could even re-design Kindle from scratch, looking again at how the consumer experience could be improved and changed. Kindle meanwhile has its stalwart fans and admirers. It’s slimmer and smaller and, some claim, easier to read. You can also bung it in your pocket. Not so with Steve Jobs’ creation. Whatever, these devices are going mainstream, and in a big way. Can Amazon keep up the commercial pressure? Don’t bet against it. However the recent news that Bezos recently sold two million shares worth $267m may unnerve investors. No reason was given for Bezos’ sell.  

3. Adobe
Software giant Adobe Systems’ roots go back to the start of the early 1980s when two techies, John Warnock and Charles Geschke, left their employers Xerox Parc to develop their own technology, PostScript page description language. The company got a huge boost a few years later when Apple licensed their Photoshop technology for their own laser printers. Another breakthrough came in December 2005 when it snapped up ex-competitor Macromedia. A load of new products like Flash and Dreamweaver were then added to Adobe’s product range. In 2008 they released Adobe Media player, which included tutorials and videos for training and entertainment purposes. Lately, Adobe has been in the news for several reasons: its Creative Suite 4 sales have disappointed and last November it had to lay off more than 650 employees. Yet it’s a company with extraordinary breadth and talent, encompassing mobile software and services used by an almost bewildering range of clients: developers, consumers, designers, IT knowledge workers. Its operations are also truly global, from the Americas, Europe and Asia. However, it’s also been in the news recently because of its nasty spat with Apple. Apple Inc.’s recent competitive behaviour is similar to that of a 19th-century railroad company, a top Adobe Systems technology recently complained, alluding to the iconic computer company’s stance against Adobe’s Flash media player. The problem for Adobe though is that the mobile era is about open web standards, low power appliances and new touch interfaces – all areas where Flash struggles to maintain a presence. Adobe has got quite a fight on its hands. But it’s used to fighting, and hard.

4. Google
Chrome. You couldn’t get away from Google’s operating system this year. Although hardly bulging in features, Chrome makes web browsing quick, clever and convenient. Its more basic, organic experience, Google hopes, will encourage more people to use computers, particularly at the low-end where Chrome’s comparative simplicity and speed should build loyalty. Chrome is also clever: many chip makers and other vendors have agreed to build devices that will run alongside it. It also encourages everyone else who uses it to become that more dependable on the Internet for their business – which has to prop up Google’s own bottom line. Just as seriously, it also means Microsoft doesn’t have it all its own way, given its history of favouring its own applications within its own browsers (browser development traditionally has moved at a glacial pace). Chrome should also fire the starting gun for a new range of more heavyweight industrial apps requiring a nimble, fuss free open platform. Google has experienced stupendous growth, but some investors are worried that moving into market areas like browsers could slam the brakes on growth. There are huge pressures from investors used to fairly heady share price rises, too. What is Google’s strategy long term? There’s a certain lack of detail. Meanwhile, it’s more maps, mobile phones, wind farms, even. When Yahoo was piling on the clutter on its websites, Google was going in the other direction. But Yahoo is becoming a more focused operation these days, as well as getting better at differentiating itself from its arch rival. Interesting times ahead.

5. Glaxosmithkline
Glaxo might seem an odd choice alongside its techy neighbours. But the pharmacy giant is a technologically highly innovative player. It needs to be. The pharma industry faces unprecedented competition from Asia – particularly the generic drug makers. Which means Glaxo is under huge pressure to differentiate itself. Returns from R&D investment is riven with risk. However its biopharmaceuticals business has an increasingly strong pipeline. A rash of potentially high-growth potential products include Ratarix, the rota-viral diarrhea vaccine. Tykerb is a breast cancer drug and Cervarix, the first vaccine with the potential to prevent select strains of cervical cancer, could all bring home the bacon for investors. New drugs like its autoimmune disease drug Benlysta should also help. Glaxo recently published forecast-beating earnings for the first quarter of 2010 thanks to sales of its top-selling asthma treatment Advair. Operating margins were also better than expected. However there is worry about how much headwind the company will have from Obama’s new healthcare proposals. Swine flu too is also winding down. Concern about possible side-effects from diabetes drug Avandia is another issue. Also, the hammering of Greece and the wider European economy is also taking its toll on the company’s fortunes. Glaxo is a company reliant on government state spending. Yet its ‘open innovation’ strategy to bring better medicine and drugs to the world’s poor has also attracted much praise. “We want to be a company that is truly a partner in addressing the healthcare challenges in the world’s poorest countries, no matter how difficult they are,” says Glaxo boss Andrew Witty. “A restless company, never satisfied with what it has achieved, but always looking for ways of doing more.” More is the word though. And if Witty can add ‘more’ innovation to the mix, then investors will feel more reassured.

6. A123 Systems
If you had to boil it down, A123 Systems would probably be classed as a green energy company. It’s a battery maker deep into powering the alternative energy scene. It was one of the first US companies to invest heavily in high-power lithium ion design. Its staff comprises of high-level scientists and industry veterans but its manufacturing base is in China, where it has the physical and economic scale to build millions of battery packs per year. It had a blockbuster IPO last year but its stock price has however taken a few punches since.  

7. Aero Vodochody
Although Aero Vodochody celebrates 90 years in business this year, it remains a highly dynamic aerospace company based in the Czech Republic. Much of its bread and butter work focuses on engineering, tool design and fabrication. Its own in-house team includes 100-plus engineers plus a substantial airframe assembly and aircraft painting side. Its production side is immense – it’s produced 11,000 aircraft and supplies governments worldwide with a range of civil and military aerospace technology. It’s also formidably competitive thanks to its Czech manufacturing base. Oh, and it’s the largest jet training aircraft producer in the world.

8. Alnylam
Another pharma operator, Alnylam has been throwing resources for some time on a breakthrough discovery, tagged RNA interference, or RNAi. Much of it is about controlling gene expression and being able to devise treatments for liver cancer, high cholesterol and Huntingdon’s disease. RNAi is about silencing, claims Alnylam, “disease-causing genes upstream of today’s medicine”. There are exclusive rights to patents on RNA interference and alliances have been formed with Medtronic, Novartis, Biogen Idec, Roche, and Glaxo, amongst others. This is genuinely big business. These deals have generated more than $600m in funding so far and Novartis recently announced it was increasing its stake in RNAi, buying more than 55,000 shares.

9. Nanosphere
This gene-testing products maker recently reported a larger than expected first quarter loss, but long-term investors won’t be too concerned. This company makes diagnostic tests that are up to three times as sensitive as conventional testing equipment. They’re also quick to undergo. Key to its technology is gold nano particles that are mixed with chemicals that can help analyse blood samples. Last year the company’s Verigene instrument got approved by the US Food and Drug Administration for pharmacogenomic testing. Fascinating technology. Despite recent losses, its shares have risen sharply after a year of high volatility.

10. American Superconductor
Massachusetts-based American Superconductor has made much news recently. This electrical controls systems and wind energy company is set to benefit from an increase in Chinese wind power investment – and Deutsche Bank promptly advised investors to pile in as a consequence. American Superconductor is heavily focused on advanced cabling that can transmit as much electricity as 10 sets of conventional copper cables. These cables can be buried underground and can be used to reduce the risk of power cuts. Potentially the market for this kind of technology is massive. Expect it to take advantage of President Obama’s opening- up of green and renewable technology. Utility technology is moving at a fast pace – especially in Asia – and American Superconductor is at the heart of green-tech change and, just as importantly, legislation change.

11. Amyris
Another company mixing deep science and innovation is Ayres Biotechnologies. This biofuel company is currently making plans to raise $100m through an IPO. There are certainly risks to this business, like the considerable expense to building expensive biorefineries. However its big advantage is that Amyris’ technology fits right into the existing fuel framework: producing hydrocarbons from sugar easily replaces existing fuels. No surprise that it is spending a lot of time investing in Brazil where it has a plentiful supply of sugar supported by a country with extensive experience in the ethanol industry. The technology to do all this is expensive, but the number of green-tech companies planning significant IPOs to pilot similar business paths is exciting and a confidence-builder.

12. Serious Materials
This company develops sustainable green building materials. Its won a rash of awards for innovation, including winning the first Aspen Institute award for innovation in Corporate Energy Conservation. Its products include high-performance insulated windows and glass, reducing energy costs by up to 40%. Its EcoRock product is a “green” alternative to standard drywall which boasts very low emissions in its production. It recently won a contract to re-fit the 6.500 windows of the Empire State Building.

13. First Solar
Shortly before going to press, First Solar shares soared to a six-month high after it posted better than expected quarterly profits and bumped up its full year forecast. Good news for investors in this thin-film solar energy company. First Solar produced photovoltaic solar modules using a material called cadmium telluride. This absorbs light well, better than silicon does, in fact. Large-scale industry is taking an interest and costs for the technology have dramatically lowered recently: in 2008 it broke through the $1-per-watt barrier. A milestone.

14. Applied materials
A global leader in Nanomanufacturing technology, Applied Materials produces solutions for a broad range of service and software products in the semiconductor, flexible electronics and solar photovoltaic cell industry. What is crucial to much of its technology is that it has the potential to vastly reduce the cost of solar power. It now benefits from an R&D centre in Xi’an, China where green technology is powering ahead at a massive clip. It recently bought one of its rivals, Semitool Inc, at the end of 2009. The company is growing fast and has now split into several divisions, Silicon Systems Group, Display, Energy and Environmental Solutions (EES) and Service.

15. Coskata
Biofuels company Coskata is another company that has seen heavy slugs of equity financing recently, including a tranche from French oil company Total. Total takes this company so seriously that it has taken a seat on the board. Coskata is heavily focused on cellulosic ethanol, which is increasingly moving to full-scale production. US car market GM also has a sizeable stake on Coskata which utilises microorganisms and bioreactors in its conversion process to produce cellulosic ethanol. New product technologies are also promised from this innovative company. It recently announced the start-up of their new flex-ethanol facility in Madison, PA which produces ethanol from feedstocks such as wood biomass as well as construction waste.

16. Complete Genomics
DNA sequencing is a huge business opportunity. Being able to track human genomes enables scientists to explore human biological structures and processes. Although cause and effect relationships between illnesses and genes are often vague, genomics can help pinpoint concerns quickly. The problem is that this technology is still in its infancy and still expensive. But Complete Genomics claims they will in future be able to offer a genome sequencing for $5,000. For future generations, DNA sequencing will be come as routine as a regular vaccine shot. Currently Complete Genomics offers sequencing services to academic labs and pharma operators. Currently it’s building the world’s biggest sequencing facility and a huge data centre to manage the information.

17. Asia Paper & Pulp
From modest beginnings – it originally started life as a small caustic soda plant on the outskirts of Surabaya – APP is now a major international paper player. The global paper industry has seen more massive change packed into the last 10 years than probably the last 100 years. Fast-changing technology and a growing awareness of the finite resources of planet earth means paper players like APP have to demonstrate a sustainable environmental approach. The vast majority of APP-Indonesia’s fiber supply comes from sustainable plantation forestry – so trees are planted expressly for the purpose of pulp production. Its client base is fairly evenly balanced with South East Asia and Japan taking about 50 percent of the existing market.

18. Athenahealth
AthenaHealth provides Internet-based billing and other services to the medical industry. It was founded in 1997, just when the Internet was really starting to be treated seriously as a business tool. Two main products include athenaCollector, which is a physician billing service backed by award-winning software and athenaClinicals that integrates medical records with clinical and payer data. Much of the technology relies now on so-called cloud technology. That’s a huge advantage as it means it’s easy to update programs remotely as government legislation changes. Many of its clients are fairly small, physician-operated businesses. However it’s recently been under pressure from two brokerages slashing their price targets on the stock following weaker-than-expected quarterly profits.

19. Bind Biosciences
Nano-medicine company Bind Biosciences develops therapeutic targeted nano technology for a wide variety of treatments including cardiovascular problems, cancer and infectious diseases. The Cambridge Massachusetts-based company recently completed a new round of funding, raising almost $11m and attracted a new CEO, Scott Mimic, who has a lot of experience in winning FDA approval and launching new drugs. The company was founded by MIT’s Robert Langer and Omid Farokhzad from Harvard Medical School, both stars in their own professional field. The company has managed to raise almost $30m since 2006.

20. Cleantech Region
Not a company but a region in mid-Sweden. Sounds unpromising? The CleanTech region lies in the municipalities of Östersund and Sundsvall, Jämtland and is one of the most innovative green-tech areas in Scandinavia, devoted to supporting a massive range of “green” solutions: energy efficiency, construction, materials, recycling and waste plus water and waste water. Sweden has been at the forefront of eco-technology and there is huge (and building) interest in many of the sustainable technologies it pioneered – eco-homes are a good example – from the rest of Europe. But the Cleantech Region encompasses many more green ideas too. A fascinating part of Sweden.

21. Dupont
It’s not all about small start-ups. American chemical giant DuPont has a long history of technical innovation and recently partnered with BP produce transportation fuel butanol, extracted from agricultural feedstocks. Butanol is in fact an alcohol and can be used in many unmodified petrol engines. It also can be produced from a range of cereal crops including sugar cane. In November last year, both BP and DuPont agreed on the setting up of Kingston Research Ltd and a £25m biofuels research centre in Hull where the advantage of biobutanol technology is shown off. The first commercial-scale biobutanol facility  will being operating in 2013. Expect Du Pont to license much of the technology to other producers. It’s also looking at developing butanol from ceullulosic sources like switchgrass.

22. Joule Biotechnologies
Yet another company based in Cambridge, Massachusetts. This biotech start-up recently announced plans to make diesel at its solar fuels plant. It’s a company deep into ethanol production but has also genetically engineered a photosynthetic micro-organism that, so it’s thought, can excrete hydrocarbons. But currently the company’s focus is on producing a non-fossil fuel for petrol and diesel engines. A huge break from existing processes.

23. eSolar
eSolar is just one of a bunch of recently-selected companies chosen by the US Department of Energy to benefit from a new round of funding for solar power in an effort for US industry to kick the coal habit. eSolar develops solar power systems. Heat from the sun is reflected from small flat mirrors to a receiver – usually tower-mounted – which then boils water to create steam. This steam can then power a turbine. Very clever. It recently licensed its technology To Chinese electrical power kit maker Penglai Electrical. Product licensing operations are now in full swing.  

24. Fate Therapeutics
Fate Therapeutics recently celebrated the appointment of ex-Roche and Wyeth Dr Tom Novak who will help this biotech company develop more stem cell therapeutic technology. Fate has recruited top stem cell scientists together to focus on adult stem cell and iPS Cell research. Fate’s scientific founders have already  identified and characterised key stem cell pathways known to regulate cell fate and play key roles in tissue repair and regeneration. Despite the global recession, Fate anticipates that a combination of experienced management, promising technology and increasingly successful access to capital will spur strong progress.

25. Fluidigm
This life science systems company is at the forefront of proprietary integrated fluidic circuits. This technology enables scientists to experiment with gene expression in single cells. The technology is used in biomedical labs; the longer∞term hope is that the technology could spur disposable diagnostic techniques in clinical applications like cancer diagnostics, not to mention other diseases. Because the technology is new – the chips are a flexible polymer that will adapt to many uses – it could in the long term promote a wide range of new applications, expanding the market in micro fluidics.

26. HTC
Taiwanese Smartphone company has made a dramatic splash in recent years with a range of sophisticated, user-friendly ‘phones that even comes close to rivalling Apple’s mighty iPhone. Last year heralded a dramatic change for the company when it switched to using devices deploying the Google-based Android operating system. Smartphones are certainly where the action is. While overall mobile phone sales have begun to plateau globally, the smartphone market is buoyant, and the market is still growing. By partnering directly with Google, HTC have stolen a march on its competitors.

27. IBM
Is IBM really a legitimate high-tech player? If you asked the question 30 years ago then the answer would have been a certain Yes. But IBM’s star dimmed over the years, bloated by costs and bureaucracy. Not any more. A new cloud-computing operation and a growing focus on analytics has sent the company grow in confidence again. The name ‘IBM’ still carries a great deal of clout with corporations and the company has put a lot of work into making its technological offerings as simple to use as possible. A lot of work has also gone into the security of IBM’s cloud computing operation and the cost savings for corporate clients can be significant.

28. Illumina
Another company whose share prices has been boosted – after quite a volatile year – is Illumina. It focuses on genomics technology and recently launched a sequencing machine that can read entire genomes. The technology is used by a wide variety of research centres and pharma operators, but the market for this technology is expanding fast. It’s also getting into the personal-genomics market that can even be ordered online – but for a substantial cost.

29. Infinera
Revenues have recently climbed for this California communications equipment company and losses have narrowed. Encouraging. It’s a company that produces high-tech optical transmission equipment for a wide range of clients and services. Much of Infinera’s work relies on digital optical network technology. Its unique Bandwidth Virtualisation technology has helped create a digital optical network supplying considerable cost savings in large-scale photonic integration.

30. Intel
Even if you know very little about computer semiconductor chips, you now this company’s name – probably why Intel was ranked last year as one of the world’s top 100 brands. Although it’s still deeply invested in semiconductor work, Intel is increasingly looking at electrical transmission and generation technology. It still remains the dominant supplier of PC chips and its brand recognition continues to rise. It recently raised its long-term margin outlook on the back of plans to diversify. Interestingly, despite the rash of new mobile products from Apple, the tablet PC market is predicted to still grow strongly for the next four years. Oh, and that slightly annoying Intel jingle? Blame it on Austrian 1980s sampling band Edelweiss.

31. Luxtera
Luxtera is about a new breed of monolithic opto-electronic devices. The crux of the company’s philosophy is to offer economic optical connectivity, be it network level to intra-system level and even chip-to-chip. Recently it produced an optical trans-receiver making it possible to send data between chips at 10 gigabits per second, yet using a minimum of power. That’s hugely advanced technology and will interest any operator with a need to send and receive data quickly. Ultimately photonic networking will replace copper wires – copper has a stranglehold on this market, but this will lessen as technology increases. Luxtera is well-positioned.

32. Medtronic
Medtronic is well known for its technology that encourages deep brain stimulation. The technology is still advancing and last year the US Food and Drug Administration approved its technology for treating obsessive-compulsive disorder. Up to 60,000 people have now received Medtronic’s therapy technology in a range of disorders, including Parkinson’s disease and dystonia. Increasingly it’s looking at the epilepsy and depression market and is likely to take advantage of the advances in optogenetics where increasing light is used to simulate brain cells rather than electricity.

33. Novomer
This is a high-performance materials company utilising plastics, polymers and other chemicals, all made from renewable feedstocks such as carbon dioxide. Novomer has inherently deep green characteristics compared to most companies, sequestering greenhouse gases in making plastic. But it’s also competing with producers of conventional industrial polymers made from petroleum. It’s right to emphasise the green aspect of its products and capitalise on consumer concerns. However the primary advantage of making polymers from carbon gases is, says the company, that it’s cheaper, “which may help grab market share.”

34. Pacific Biosciences
The race is really on for companies racing to improve gene sequencing. Pacific is hoping to put its machines on sale in the second half of 2010. The sheer range of applications that Pacific thinks will fit its technology is massive – from examining cancer genes to crop breeding. However, what makes Pacific’s technology different is that it claims to read longer strands of DNA molecules. It has developed a disruptive technology platform for the real-time detection of biological events at single molecule resolution. Impressive. It has raised $266m in funding so far.

35. Streambase
A developer of complex event processing software, StreamBase recently pulled in more financing ($5.5m) through a new funding round. Founded in 2003, StreamBase’s offering is focused on creating databases that are structured so that the same information gets processed while being collected – useful for handling large volumes of real-time information. Most of this Lexington, Massachusetts-based company’s clients remain in the financial sector but it’s also selling its technology to government agencies. Even gaming sites.  Clearly a very wide client base. It recently opened an office in New York City, as well as Washington and London.

36. Suntech
A recent stock market rally supplied Suntech with a rash of positive news headlines. The Chinese-based company is all about making solar power as affordable as it can; so no surprise it’s also the worlds’ biggest crystalline-silicon solar panel producer. Their products can suit both residential and commercial use. Based in Wuxi, China, Suntech is about to construct a 30-megawatt-capacity factory in Phoenix, Arizona – its first US manufacturing plant. Suntech’s listed on the NYSE and employs 8,000 worldwide. It recently projected first-quarter revenues of $580m to $590m. Analysts however had estimated $542m.

37. Synthetic Genomics
This biotech company began with biofuels, then branched into a range of agricultural biotech sectors such as disease control and vaccines. It remains a privately held company and still focuses on advanced biofuel technology. It’s also deeply involved in harnessing photosynthetic organisms to produce products directly from sunlight and carbon dioxide. Practical solutions to real problems – like cost-effective ways to create clean drinking water – major heavily. Synthetic was founded by J. Craig Venter who’s previous company, Celera Genomics, was instrumental in the race to sequence the human genome.

38. iRobot
Founded in 1990 by a group of boffins working in MIT’s Artificial Intelligence Lab, iRobot is best known for its
home robot the Roomba. Automated vacuum products followed including Scooba, a floor washing product.  Although the company has pioneered domestics products, the military market is now an important segment for iRobot – it has sold more than 3,000 PackBot tactical robots to militaries worldwide; iRobot is also working with the US army to develop unmanned military vehicles. Revenues from overseas sales are also increasingly becoming important for this company.

39. 1366 Technologies
1366 is about making solar power as cost-effective as coal. The company harnesses veteran scientists, engineers and entrepreneurs to create silicon – a known, safe and abundant material – but processing it at low cost while also increasing cell efficiency. Upshot? 1366 produces solar manufacturing techniques that are less expensive and time-consuming. One of the ways to take on the formidable economies of scale from China-based companies. Oh, and the name? It relates to the watts of radiation that hit the atmosphere.

40. Tilera
This Boston chip start-up is about processors, software and platforms. Its processing technology can be found in many applications such as networking and cloud computing. Tilera’s technology is based on what its tagged “intelligent mesh architecture”, providing huge scalability, it claims. It’s a good example of huge innovation in the semiconductor marketplace where strong data sharing – speed and flexibility – carries massive interest. A lot of power comes in small packages. Intel, watch out. It has raised more than $64m in funding so far and revenues from cloud computing and
other areas should see the company break even very soon.