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UK TAKE HEED, GE STAKES ITS FUTURE ON SCIENCE

11 Oct 04. As various UK Government Ministers, the majority of them lawyers, and think tanks, continue to advocate the destruction of the UK industrial and scientific base, US companies and General Electric in particular are developing scientific research to ensure their corporations remain in the forefront of scientific development into the next century.
The domination of lawyers, there are now more in the UK parliament than ever before, has created the opportunity to make laws for lawyers to enrich them even more. Thus the complaints from industry on the growth or red tape and regulations can be traced right back to these politicians enriching their own. There is even a debate as to whether the DTI should be dismantled, who needs such a Department if there isn’t going to be anymore industry!

Whilst Tony Blair and his legal cronies embark on their crusade for the UK into the next Century his trumpeting of the Service Sector hit the buffers this month with no or little growth. Topping this the Unions are becoming increasingly concerned at the exodus of some 56000 service jobs, so far, to India, where the average salary is £6000 p.a. (See: BATTLESPACE UPDATE Vol.6 ISSUE 36, THIS THINK TANK IS HOLED BELOW THE WATERLINE) More worryingly, the combination of pacifist left-wing leanings has put the defence industry in particular in the spotlight for demolition.

The FT reported that Jeff Immelt, GE’s chairman and chief executive, has reached a turning point in his plan to transform GE. The plan was to evolve from an industrial and financial conglomerate dedicated to the relentless pursuit of the bottom line, to an innovator bent on finding long-term growth opportunities wherever they may be. So far, the journey has proved a winding route, one that takes in Hollywood film studios, Russian banking and a growing obsession with China.

Yet at the heart of Mr Immelt’s strategy lies a belief that science holds the key to reinvigorating GE’s growth potential. In the global research and development centre at Niskayuna, NY – as well as at new sister facilities in Bangalore, Shanghai and Munich – GE is switching resources towards longer-term research. It is placing multiple bets on promising technologies ranging from nanotechnology and molecular medicine to hydrogen fuel cells and pulse detonation machines designed one day to replace the internal combustion engine and the jet turbine.

The blue-skies approach is a radical departure for researchers at Niskayuna, who traditionally provided more immediate technical support to product developers in GE’s operating businesses. But the new-style labs hark back to a golden age in US corporate research, aiming at the type of Nobel prize-winning breakthroughs discovered by AT&T at Bell Labs or the pioneering work by Xerox at the Palo Alto Research Center (Parc). It will take years to find out whether GE can truly match such temples of scientific excellence or succeed in commercialising breakthroughs in a way that Xerox and AT&T famously struggled to do. The gamble also comes at a time when today’s leading US science companies, from drugmakers such as Merck to computer giants like Microsoft, are finding it harder to justify the billions of dollars spent on research. Nevertheless, the scale of
GE’s ambition makes it impossible to ignore.

The size and diversity of this $356bn behemoth has long made it a bellwether for the US economy, and although its globalisation makes it a better proxy for the world economy, the challenges it faces mirror those of mainstream corporate America. What happens when your products become commodities? How do you avoid being beaten at your own game by low-cost countries? How do you deal with mature domestic markets? And how do you feed Wall Street’s relentless demand for profit increases in an era of low growth?

Few business leaders have articulated these challenges as clearly as Mr Immelt. Last October,

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