50 Smartest Companies

The 50 companies on our annual list of the “smartest” businesses in the world make disruptive technologies. The phrase is much abused by technologists. Mostly, it just means “new and good.” Insofar as it can be used precisely, it must be employed as Clayton Christensen, the Harvard Business School professor who coined the phrase, intended: he wanted to convey the idea that certain innovations possess “attributes” that create new (initially low-end) markets and displace existing businesses.

The 50 are ranked more or less arbitrarily. Nonetheless, three companies —Illumina, Tesla, and Google—justifiably lead our list, by virtue of the disruptiveness of their technologies and the intelligence with which they built their businesses.

Illumina, the smartest of all, wowed us. The company exploits the fundamental copying mechanism of DNA in order to read the sequence of a human genome. (The process is called sequencing by synthesis: fluorescently labeled bases are added to single DNA strands from a sample and read, in massively multiplexed fashion.) Through technology it invented or acquired from Solexa, Illumina has forced an astounding increase in the pace of sequencing and an equally astounding drop in sequencing’s cost (five times faster than Moore’s Law). Illumina’s machines are beautiful to contemplate: so slick they don’t have a single button and so powerful they can generate a genome for $1,000. (By contrast, the Human Genome Project cost $3 billion; as recently as 2006, it cost $10 million to sequence a human genome.)

Illumina’s technology is truly disruptive. In richer countries, everyone’s genomes will be decoded. The impact will be new categories of drugs, better matching of therapeutics to the patients who will benefit most, and startling insights into what makes us human.

Elsewhere in the issue, we describe two other disruptive technologies: Google Glass (see “Glass, Darkly,” by Simson Garfinkel) and Bitcoin (which is owned by no company: see “Marginally Useful,” by Paul Ford). Glass, Garfinkel writes, “fundamentally transforms … human-computer interactions, making them more intimate.” Ford says, “Today, there are thousands of people loyal to the ideology and opportunities that Bitcoin represents. They imagine a world where economies are less dependent on banks and governments, and they’re actually using Bitcoin, often in disruptive ways.”

But Illumina’s technology, Glass, and Bitcoin are not only disruptive (in the sense that new markets for novel things displace older markets and things, and all the associated human habits that attached themselves to those old things). The developer and blogger Dave Winer recently wrote, “Every [successful] product is both disruptive and constructive. It disrupts someone’s business, and adds new art.” This must be right; new technologies would not be embraced if they were merely destructive. Successful products always offer more to customers (or to some powerful component of society) than the costs of their adoption.

Clay Shirky, a professor at New York University, likes to say, “It’s not a revolution if nobody loses.” With a little science-fictional speculation, one can imagine the negative consequences of genome sequencing, Glass, and Bitcoin, and one can guess who would suffer most if they were broadly adopted. (Briefly: communities with genetic defects, who could face discrimination or be edited out of existence; we who care about privacy; and anyone who has ever benefited from monetary policy.) But, equally, it’s true that there are no revolutions if no one benefits. Therefore that it may raise up, technology throws down.