Jeffrey R. Immelt

---

Position: Chairman and CEO, General Electric

---

Issue: Amidst tight profits and a snaillike economy, how to grow GE's highly diversified $132 billion operation, with businesses in everything from power generation to medical imaging, appliances, aircraft engines, and financial services-and preserve the company's century-old reputation for innovation.

---

Personal Point of Impact: Since taking over in 2000, has placed high priority on creating new businesses. Has opened a research lab in China and is building another in Germany, pushing long-term projects in molecular imaging, nanotechnology, advanced propulsion, energy, and other areas. Upped central R&D budget from $286 million in 2000 to $359 million in 2003; seeks to make GE's main lab a focal point for strategic planning.

Technology Review: You've upped the ante significantly on R&D, placing heavy emphasis on longer-term research and homegrown innovation. What led you to it?
Jeffrey Immelt: We're inheriting a slow-growth economy, a slow-growth world. There's a lot of excess capacity, but companies want to grow market share and margins. And in the future, that will be done by funding innovation that reflects customer needs and developing technologies over a long period of time. I started my career selling, and I made this profound discovery that whenever I had good products to sell, I always did better than when I had lousy products to sell. So we're closing the door on a decade that was about capital markets and acquiring things and opening the door on a new period that's more about developing things. The companies that know how to develop things are ultimately going to create the most shareholder value. It's as simple as that.

TR: How does GE's global expansion figure in, with your new research labs opening in Munich and Shanghai?
Immelt: The new labs bring technology development closer to our global customers and help us tap into talent that exists outside the U.S. We have three new R&D centers: Bangalore, India, which opened in 2000; Shanghai, China, which opened earlier this year; and Munich, Germany, which will open in 2004. Each place brings something different. India graduates around 10,000 electrical engineers every year, so you get this incredible wealth of talent. Our Bangalore lab is strong in computer modeling and analysis, advanced materials, and medical visualization. Then you go to Munich. The cost of an engineer is more or less the same as in the U.S., but the engineering schools in Germany are among the best in the world, and you get innovation in renewable energy, sensors, advanced medical imaging, and automotive technology. Plus, it brings us closer to our European customers. And then you look at Shanghai. You get a great market capability in China and a relatively economical technical base; China is doing a lot of work in power electronics, manufacturing technology, and ceramics and metallurgy. So I firmly believe in global technology development, where you can really tap into the best ideas around the world.

What we've insisted on is that when we globalize, we globalize products and systems and technology. So that India, for instance, becomes the world leader in a certain domain, versus just being a sliver of somebody else's program that's run from the U.S. Unless you're willing to do that, you never get the global capability you really need.