Future Readiness Indicator

Future Readiness Indicator is an indicator developed by the IMD Center for Future Readiness. It evaluates a company's preparedness for long-term trends.[1] A systematic methodology generates a composite score for each entity, allowing identification of industry leaders and an examination of their respective behaviors and attitudes. It is developed by Howard Yu.[2]

History

The Future Readiness Indicator, developed in 2021 (some rankings are backdated to 2010 as analysis only), annually evaluates the adaptability of the largest companies of the world to future challenges.[2][3]

Methodology

The ranking derives from seven primary, equally-weighted factors: financial indicators, projected growth, business diversification, workforce diversity/ESG, R&D, innovation outcomes, and liquidity/debt status, totaling 33 distinct variables.[4][5]

The data is publicly accessible from company outlets, news sources, and thematic reports. Factiva, CrunchBase, Espacenet, Sustainalytics, and Google Trends also supplement data collection.[4][6]

The indicator is calculated by collecting each company's historical data, performing computations for each variable, standardizing criteria data, aggregating variables into main factors, and assigning an overall ranking.[6] Each company is ranked from 1 (best) to n (worst, n=sample size) on a 1-100 scale.[4]

References
  1. "Four lessons from the world's most 'future-ready' businesses". Management Today.
  2. "Tesla most 'future-ready' carmaker, China's BYD rising: Report". Al-Jazeera.
  3. "Chinese carmakers gather steam as innovation thrives, expert says". China Daily.
  4. "Our Research Methodology – IMD business school for management and leadership courses". www.imd.org.
  5. Warner, Kelsey (December 15, 2021). "How future-proof are Apple, Twitter and Spotify? Not very, researchers find". The National.
  6. Yu, Howard; Shan, Jialu; Boutalikakis, Angelo; Tempel, Lawrence; Balian, Zuriati (March 21, 2022). "What Makes a Company "Future Ready"?" – via Harvard Business Review.
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