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Innovation
Movers, shakers, and the rest: Tech, pharma, and fashion players ranked for future readinessÂ
Published 12 December 2023 in Innovation • 6 min read • 
Audio available
As the latest IMD Future Readiness Indicator is published, we take a close look at the pioneers and innovators setting the stage for 2024.
As we look ahead to the coming year, a range of transformations is taking shape across the tech, pharmaceutical, and fashion sectors.
In the tech sector, giants like Nvidia and Microsoft are reshaping the landscape with AI and integrated software solutions. Meanwhile, the pharmaceutical industry, led by companies like Pfizer and Eli Lilly, is boldly stepping into the era of personalized medicine and digital therapies. At the same time, the fashion industry, led by brands like Nike and Hermès, adapts to the relentless ebb and flow of market demands and consumer behaviors.
This tapestry of change, woven by leaders in their respective fields, has been tracked by IMD’s Center for Future Readiness in its latest rankings. These rankings – comprising the Future Readiness Indicator – paint a vivid picture of which industry leaders are dominating into the new year and offer key insights into what others can learn from their examples.
From Alphabet’s slip to Nvidia’s rise: The 2023 tech sector shuffle
With Microsoft out front, Alphabet saw a slight dip in its position, falling from second to fourth, while Nvidia edged upward, securing the second spot from its previous third. Amazon experienced a more pronounced drop, descending from sixth to 10th place. Netflix, despite the increasing competition in the streaming sector, managed to sustain its rank at 12, and Tencent maintained its position at 11, showing resilience in the gaming industry.
Two big trends stand out in the tech world: we’re using smarter AI and making software easier and all-in-one. Companies like OpenAI, Google, Microsoft, and Meta are pushing generative AI forward, but the star of the show is Nvidia, known for its powerful graphics chips. They’re not just for gaming anymore; they’re now key in AI applications, from drug discovery to self-driving cars. Nvidia is also creating Omniverse, a virtual world where people can work together on projects and use different design tools, all in one place.
Talking about software as a service that does more with less hassle, Microsoft is leading this change. Take Microsoft Teams, for example. Not just for chatting, it combines contacts, files, project management, and more in one place. Microsoft 365 goes even further, blending familiar tools like Word and Excel with newer technologies, all connected by Microsoft Graph, which links different Microsoft services. This approach, once a hallmark of Amazon’s AWS, is now being perfected by Microsoft, making it simpler for us to use lots of different software without getting lost in the tech maze.
The IMD Future Readiness Indicator
At IMD, we’ve been compiling this bi-annual Future-Readiness Indicator to measure companies’ preparedness. We ranked the top players in each industry based on seven equally weighted factors. We evaluated the financial fundamentals of a company’s ongoing business, as investing in the future requires a healthy cash flow, as well as looking at cash and debts. We measured a company’s growth prospects, looking at investors’ expectations and the intensity of a company’s investment in startups or new ventures. Because executive teams need to see beyond their day-to-day operations, we also looked for diversity in the management board, taking note of gender and nationality as well as the industry backgrounds of a company’s top leadership. When possible, we gauge a company’s productivity by measures such as operating revenue per employee. Finally, we monitor the trajectory of new product rollouts – openness to new ideas and the early results of innovation.
The resulting industry rankings are based on hard data. They include financial reporting, investors’ calls, LinkedIn profiles of the management team, CrunchBase, Factiva, and other publicly available reporting, all of which we used to produce a balanced composite score.
Future-ready pharma: The titans poised to change lives
Pfizer, AstraZeneca, Eli Lilly, and Novartis are leading the way in the pharmaceutical industry according to the Indicator. Notably, 2023 was a significant year for obesity treatments, with Eli Lilly moving up from seventh to third place, and Novo Nordisk rising from 13th to seventh. Meanwhile, Pfizer advanced from second to first place.
Top-performing pharmaceutical companies are deeply invested in research, continually seeking innovative medicines while preparing a pipeline of future drug candidates. The Augmented Drug Design (ADD) project by AstraZeneca and Amazon Web Services (AWS), for example, aim to speed up medicine discovery. Through ADD, tasks like identifying new potential drug targets, analyzing images from lab experiments, and managing clinical trials have become more efficient.
The global reach and efficient distribution networks also enable top-performing companies to deliver medicines to a vast patient population, while their adeptness in navigating complex legal and regulatory landscapes ensures timely drug approvals. Pfizer’s cold chain service and AstraZeneca’s end-to-end digital supply chain initiatives are particularly notable. Eli Lilly also shows promise with its investments in blockchain and digital twins for better traceability, logistics, and inventory management.
By focusing on various treatment areas and adopting modern technologies, these companies are enhancing their operations and maintaining upward business growth. A patient-centric approach, coupled with the adoption of modern technologies, allows them to gather valuable data and optimize their operations.
How top brands are shaping the industry’s 2024 landscape
In fashion, Nike solidified its top spot in 2023, with Hermès and Kering rising in ranks. LVMH and Richemont have consistently held strong positions, emphasizing their robustness in luxury’s digital transformation and enduring brand value. Zalando’s rise to the fifth spot in 2023 from seventh in 2022 showcases its e-commerce strength and adaptability to consumer shifts.
This year saw inflation and geopolitical issues affecting consumer spending and operational costs. Prices for cotton and cashmere and input materials have been rising. Despite these challenges, luxury brands like Hermès thrived, thanks to the resilience of affluent consumers. The broader market, however, faced slower growth.
It is under this context that Nike outshines everyone else. The company’s revenue for the third fiscal quarter reached $12.4bn, surpassing projections of $11.48bn and representing a 14% increase from the previous year. This growth was driven by strong performance in direct sales, including its website and owned-and-operated stores, with member-buying frequency increasing and store sales growing across all geographies.
All things considered, supply chain disruptions are driving the need for new manufacturing models, including nearshoring and digital enhancements. Brands are also exploring new channels like the metaverse, utilizing rental channels and off-price retailers. That’s why future-ready companies are constantly realigning their structures to focus on sustainability and digital acceleration. These are the trendsetters who move forward in the lead into 2024.
The Future Readiness Indicator 2023 is out now, giving an in-depth look into which companies are better equipped to face a horizon of groundbreaking technological advancement and soaring geopolitical tension. Explore the full ranking results here.
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