Business Today

GE learns new tricks in India

General Electric adds booster fuel to an aggressive India strategy with new ideas and a new structure.
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Josey Puliyenthuruthel | Print Edition: October 31, 2010

This July, John Flannery, the new General Electric chief in India, and his six division leaders headed into a conference room in GE's John F. Welch Technology Centre in Bangalore, the newest and largest research location for the giant $157 billion US corporation. Their calendars were blocked for three days for a 'Session T'. T stands for technology, but the import of the meeting was not lost on anybody in GE India. It was for the first time that such a face-off for new products and solutions was being held in India. The presentations at such sessions, held regularly at other GE research centres in Munich, Shanghai or Niskayuna in New York, can be tough and intense and the Bangalore session was no different.

At the starting blocks, rules for the Bangalore contest were clear: for one, ideas dreamt up in a lab were not welcome. "We had our market-facing people working with the tech folks at Bangalore," says Flannery, 49, a GE veteran of 23 years. Dozens of ideas were presented and were prioritised by yardsticks that were nuanced, if not entirely new, in the GE research and development culture. In health care, for instance, the lens was brought to focus on whether a new product would reduce cost, improve quality and increase access, besides the usual questions around investment, market size and payback.

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Twenty product ideas across health care, wind energy and water purification were short-listed at GE India's first Session T and are in various stages of development today. If successful, they will add substantively to the small number developed or manufactured here and sold in India (see What's Changing at GE on page 58) and other emerging countries.

These are early days still, but the ground beneath GE in India has begun to move. The world's 13th-largest company has historically been unafraid to change, and it is moulting yet again in its most ambitious markets. This time, the change hinges on emerging economies that will account for the bulk of the growth in its business globally as the developed world hobbles out of a near-Depression and the risk of national bankruptcies . The Organization for Economic Cooperation and Development predicts that developed economies will have a 43 per cent share in global GDP by 2030, down from 60 per cent in 2000. Earlier this month, the International Monetary Fund noted that India and China are leading a robust global recovery.

The test-bed for GE in this ambitious change is India. A market the company believes will be a gateway into emerging markets as diverse as Lima or Luang Prabang, and Banjul or Banda Aceh as populations in under-developed countries gain more purchasing power and are able to afford new products and services. To be sure, GE is not the first US corporation to make India the centre of gravity in its globalisation effort.

Technology companies such as Cisco and IBM have been pushing the envelope for some years now. Cisco has its No. 2 ranked executive Wim Elfrink and a globalisation team based in Bangalore while one-third of IBM's workers are in India. The difference is that GE is the first manufacturing leviathan - it towers over IBM's $100 billion revenues and Cisco's $36 billion - to make that leap of faith into India, and to wager that its biggest revenue earners, industrial products like gas and steam turbines, jet engines, and health care devices, will also add muscle to India's sinew.

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