GE mirrors the American economy much better than most companies -- for good and ill. Last year, the credit squeeze assailed GE Capital, its financial-services arm; the company missed an earnings prediction, driving the stock price down by half; it even turned to Uncle Warren for a $3 billion shot of confidence.
During the same period, however, green innovation helped buoy the 131-year-old company. Revenue at GE's three-year-old Ecomagination division, centered on renewable energy, water services, and clean tech, rose an estimated 21%, to $17 billion. GE's annual investment in cleaner R&D doubled to $1.4 billion. So the stakes are high for Ecomagination's brand-new chief, Steve Fludder, a GE lifer who had been running the company's water unit. Fludder, 48, met us at GE's James Bond -- esque five-story underground complex built into a wooded Fairfield, Connecticut, hillside. After being based overseas for the past 12 years, he didn't even have a company ID yet. But he had plenty to say.
FC: What role will Ecomagination play at GE in the next 25 years?
GE has, historically, reinvented itself around opportunity. Eco touches on everything that we do, from energy, to oil and gas, aviation, transportation, health care. It's a fundamental redefinition of GE for the future.
The current economic climate doesn't dim your enthusiasm?
I love this question. The "Eco" has a dual meaning: ecology and economy. Customers can always buy on the economics alone. That's why it's a sustainable business strategy.
You come from water, the first Ecomagination business. Is water still central to the strategy?
Absolutely. We're really excited about the ability to take wastewater and purify it, not only for discharge but to recycle back into agriculture and industrial processes. We can take water in any condition and transform it for any use whatsoever -- for producing semiconductors, for human consumption, for refining oil, for making paper.
How does GE manage the politics of taking something like water, once seen as a public good, and turning it into a commodity?
I think it was Benjamin Franklin who said nobody thinks about the value of water until the well runs dry.
Ecomagination is active on six continents. What is your emerging-markets strategy?
I think the world probably is a little surprised that emerging markets and a green focus can go hand in hand. But, for example, in the north of China, where water is scarce, we have an initiative with the Chinese government to build seawater desalination plants. We're also working on a unique technology that allows us to take very challenging wastewater from coal and the production of products like PVC and discharge zero wastewater into the Yellow River, one of the three main rivers that are the lifeblood of China. In the Middle East, too, there's a huge need for seawater desalination, wastewater purification, and power-generation technologies. In India, phenomenal growth is putting a strain on basic infrastructure. But as they build, they can leapfrog directly into the latest technology. In developed countries there's always the question of whether to retrofit.
When you talk about environmental opportunities in emerging markets, you're really talking about a global crisis, right?
A global need, yes. I'll leave it to others to decide whether it's a crisis or not. But if you talk to people from an amazing spectrum of geographies, countries, cultures, economic situations, everybody knows that what we do has an impact on the environment, and in extremes that impact can be detrimental to future generations.