Immelt: 2013 Is the Year Manufacturing Gets Sexy

There are lots of ideas that pass for interesting and important in Silicon Valley (‘Hey, I’m building a social network for pets!”). Manufacturing technologies aren’t usually on the list.

General Electric CEO Jeff Immelt thinks that’s going to change. Next year, Immelt predicted as he addressed a software and dotcom-heavy crowd at a conference GE hosted San Francisco today, “is a time when manufacturing becomes sexy again.”

GE, which did $142 billion in business last year selling engines, turbines, and hospital equipment, has been closely tracking advances that are happening in 3-D printing and additive manufacturing, even developing a way to make fuel injectors for its jet engines through an experimental laser printing process. This month, its aviation business acquired two additive-manufacturing companies that had previously been making parts for GE’s LEAP engines.

GE’s goal, Immelt said, is to starting cutting its production cycle times and costs in half. “Making a turbine blade fundamentally hasn’t changed for 25 or 30 years,” he said.

Immelt was joined by other GE executives in San Francisco to lay out another of GE’s investing visions—what the company is calling the “industrial Internet” (see “GE Pitches an Industrial Internet”), a $1.5 billion effort to create better data analytics software and new kinds of user interactivity for GE’s equipment. Immelt said GE is “open for business to the community out here” and is looking to make equity investments in startups that can help it handle unwieldy data sets and figure out what problems they can solve. With the data science startup Kaggle, GE also launched two new competitions in the style of the Netflix Prize, which will ask participants to write algorithms that make flights and hospitals more efficient using real-world data.  

So what is GE going to be in the future: a software company or a manufacturing company?

Immelt said it would be very hard for another company to come in and make the heavy equipment that GE makes today. “The moat around this baby is wide. If you wanted to get into the jet engine business, you would have to go in the way-back machine,” he said.  On the other hand, he added, as GE customers start demanding more efficiency and productivity from equipment, it’s possible a software company could come and “disintermediate GE someday.”

Simply put, software is going to play an ever greater role in defining how GE’s products get to customers and how GE makes money from them.