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Innovation Winners

Bloomberg BusinessWeek's Most Innovative Companies special report is based on data from longtime partner Boston Consulting Group (BCG). Last December the consultancy e-mailed a 21-question poll to senior executives around the globe. The 1,590 respondents, who answered anonymously, were asked to name the most innovative companies outside their own industry in 2009. Here, take a look at the top 25 companies, ranked in reverse order.

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No. 25: Procter & Gamble

Last year was a transitional one for this consumer products company. CEO A.G. Lafley was succeeded by Robert McDonald. The new chief shifted P&G's (PG) focus from new upscale products to improving lower-priced goods more suited to recessionary times.

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No. 24: Virgin Group

Founder Richard Branson has used Virgin to launch more than 200 branded companies with interests in airlines, mobile communications, media, and fitness. For $200,000 you can book a seat with Virgin Galactic, the world's first "spaceline."

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No. 23: Nokia

The world's largest mobile-phone maker assigns about a third of its workforce to R&D in areas as disparate as nanotechnology and social networking. But after getting caught flatfooted by Apple's (AAPL) iPhone, Nokia (NOK) has been losing share in the lucrative smartphone market.

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No. 22: Hyundai Motor

Not that long ago, Hyundai (005380:KS) was just another Korean company that made cheap cars. Today, with a global R&D network that spans the U.S., Europe, Japan, and India, it's developing an "i-flow" concept car that greatly lowers greenhouse gas emissions.

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No. 21: Wal-Mart Stores

Wal-Mart (WMT) earned its rep as an innovator by driving down supply-chain costs. More recently the big-box retailer has been innovating to burnish its green credentials, setting a goal to reduce packaging by 5% by 2013. Laudable, sure. Novel, maybe not so much.

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No. 20: Nintendo

Wii sales began falling last year after dominating the market for video game consoles since 2006. The company has since cut prices and sales projections. Nintendo's (NTDOY) new plan to revive growth: a 3D version of its DS handheld player that doesn't require glasses.

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No. 19: Coca-Cola

Coca-Cola (KO) brought the flash of race cars and high-tech wizardry to its fountain-drink dispenser redesign. Its Freestyle machine stocks more than 100 different drinks. It uses Microsoft (MSFT) technology and style points from designers of Italian sports cars.

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No. 18: BMW

BMW (BMW:GR) got to be one of the world's most successful luxury car companies through relentless invention. One recent example: night vision, which uses far-ranging infrared technology to transmit images of potential hazards to an in-dash screen.

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No. 17: Tata Group

Known for its ultracheap minicar, the Nano, Tata takes innovation so seriously that it's developed an "Innometer." The conglomerate measures creative goals and accomplishments vs. domestic or global benchmarks while instilling a "sense of urgency" among employees.

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No. 16: Hewlett-Packard

HP (HPQ), which preaches "innovation through autonomous thinking," still makes printers, laptops, and inkjet cartridges. But at its Sustainable IT Ecosystem Laboratory, it thinks big. One project: finding ways to build energy-efficient, sustainable cities.

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No. 15: Volkswagen

The German automaker showed off its green credentials at the Los Angeles auto show in December with its Up! Lite. The 70-mile-per-gallon, aluminum-and-carbon fiber car can cruise at up to 100 mph. Meantime, its Audi unit is gaining in the luxury-car market.

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No. 14: Research in Motion

The BlackBerry's maker has invested much of its recent research budget into speeding up the text-typing capabilities of its smartphones. But touchscreen handsets from Apple (AAPL) and others are threatening to turn the device into an also-ran.

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No. 13: Ford Motor

Ford (F) survived the recession without a government bailout or bankruptcy. Its March sales soared 43% above year-earlier levels on the strength of its fuel-efficient lineup and rivals' woes. Ford's Fusion is the biggest selling domestic hybrid.

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No. 12: Intel

The world's largest chipmaker has continued its industry-leading spending on research and development. Among the payoffs this year: a new server chip that delivers performance that would have required a combined 15 of its 2005 predecessors to match.

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No. 11: Samsung Electronics

The Korean giant has invested billions of dollars in 24 R&D labs worldwide to cement its leadership in memory chips and TVs. It rolled out its first line of 3D sets this spring but faces an uphill fight in smartphones against Apple (AAPL) and Research in Motion's (RIMM) BlackBerry.

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No. 10: Sony

Sales of Sony's (SNE) PlayStation 3 video game consoles have picked up since the Tokyo-based company brought out a slimmer, cheaper model last September. The company plans to introduce its "Move" motion-sensing controller for the PS3 later this year.

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No. 9: General Electric

The conglomerate operates a research center working on everything from nanotechnology to bioscience. The labs last year filed 2,537 patent applications. Among the new projects is the Human Connectome, an attempt to produce a wiring map of the brain.

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No. 8: BYD

Publicly traded since late 2007, BYD is the first Chinese company to make the list. BYD sells gas-powered automobiles in China, but it has caught the attention of Warren Buffett and others for its latest products, hybrid cars and plug-in electric vehicles.

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No. 7: LG Electronics

CEO Yong Nam has hired top talent from multinational leaders such as IBM (IBM), Hewlett-Packard (HPQ), and Procter & Gamble (PG) to turn LG into a global entity in consumer electronics. The business world has noticed the change, lifting its ranking from 27th last year.

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No. 6: Amazon.com

The iPad may aim to rout the Kindle, yet Apple's tablet hadn't even hit stores when Amazon (AMZN) announced Kindle apps for iPad and Mac. Books are a shrinking part of an online retail empire. Electronics were almost half of Amazon's 2009 fourth-quarter sales.

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No. 5: Toyota Motor

Oops. For years the world's biggest carmaker was a role model for innovation, thanks to its reputation for high-quality vehicles and industry-leading hybrid lineup. Following massive recalls for sudden-acceleration problems, Toyota's (TM) next reinvention is its own image.

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No. 4: IBM

The company that gave the world the PC long ago got out of the hardware business, remaking itself into a global technology consultant. For example, it has collaborated with a Toronto hospital to help doctors monitor minute changes in the health of premature babies.

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No. 3: Microsoft

The software leviathan is still nimble. Its Windows 7 operating system fixed shortcomings of Vista, while Bing has more than 10% of the online search market. Next up: Microsoft Outlook 2010, which synchronizes e-mail, contacts, and social-media applications.

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No. 2: Google

Google (GOOG) and Apple (AAPL) once were allies. But with its Droid smartphone, Google has made a run into Apple iPhone territory. Its Fiber for Communities project envisions building networks in U.S. cities that will deliver speeds 100 times faster than existing services.

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No. 1: Apple

With remarkable consistency since its founding in 1976, Apple (AAPL) has invented products that have revolutionized demand for digital technology. Look for its latest, the iPad, to disrupt the market for many other portables, including the netbook and even the laptop.

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