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The BusinessWeek 50 March 26, 2009, 5:00PM EST

The BusinessWeek 50

As our 13th annual ranking of the BW 50 shows, innovation is still alive and well—vital, even—among America's largest companies

By Dean Foust

BW 50

Nestled in the rolling hills just north of San Francisco, Autodesk is no Silicon Valley mover and shaker. The company is known mostly among engineers as the maker of the 3D software programs used by everyone from Hollywood animators to the architects designing the newest Manhattan skyscrapers. But Autodesk's bigger contribution to the U.S. economy may not be its role in such movies as Kung Fu Panda or the latest Indiana Jones epic. Rather, it's in helping manufacturers scattered across the Rust Belt compete against foreign rivals.

Consider the experience of Hardinge (HDNG), a machine tool maker in Elmira, N.Y. After watching many of its U.S. rivals go bankrupt—their equipment unbolted and shipped abroad for use by companies in Japan, Taiwan, and South Korea—Hardinge employed Autodesk as part of its survival plan. The software maker's engineers developed a customized set of 3D programs that enabled Hardinge to design and build a highly sophisticated lathe with 5,000 parts in as little as five months, roughly a third of what it took a decade earlier. That helped the $345 million company survive, turning a profit in four of the past five years. Autodesk's software "allows us to go from concept to finished machine much faster, and that's helped us stay competitive," says Richard L. Simons, Hardinge's president and chief executive.

Autodesk exemplifies many of the companies in this year's BusinessWeek 50, our 13th annual ranking of the best-performing companies in the Standard & Poor's 500-stock index. While each list invariably includes companies that rode the wave of powerful industry cycles—such as this year's four energy companies—many more, like Autodesk, earned their spot in the BW 50 as innovators. They created products or services dramatically better and cheaper than anything offered by rivals. "These companies are what I call the 'disrupters' of the economy," says Harvard Business School professor Clayton H. Christensen, an innovation expert. Autodesk and its cutting-edge design software, for example, have helped the makers of everything from appliances to cars to prosthetic limbs take on entrenched rivals with greater resources.

This year's BusinessWeek 50 is chock-full of companies that changed the rules of engagement in their industries. At Nucor (NUE) (No. 20), experimental technologies and cutting-edge compensation revolutionized steel manufacturing—and may help explain why the company is holding up despite tough times. IntercontinentalExchange (ICE) (No. 17) and its electronic futures market brought greater price transparency to energy trading, and the company is now blazing a new trail by launching one of the first clearinghouses for complex credit default swaps. Occidental Petroleum (OXY) (No. 43) has relied on advanced technology to wring more production out of its oil fields in Texas and is now doing the same in Libya. Laparoscopic tools from Intuitive Surgical (ISRG) (No. 41) have shortened the recovery period for many surgery patients and could in time dramatically reduce the number of beds the nation's surgical hospitals need. "This technology has potentially profound implications for the health-care system," says Intuitive Chairman and CEO Lonnie M. Smith.

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