GE to invest $10 billion in Ecomagination initiative
Company is increasing its investment in its green-tech R&D program Ecomagination but is toning down growth estimates.
General Electric announced Thursday plans to invest $10 billion over the next five years in Ecomagination, the green-focused research and development program it began in 2005.
Since Ecomagination began, GE has invested a total of $5 billion in its research and development as of the end of 2009. The technology and products to come out of that program have generated $70 billion in revenue over the past five years, according to GE statistics released Thursday.
In view of that revenue success, GE has decided to double investment for the program between now and 2015. The announcement is not entirely surprising, as GE has said since 2007 that its Ecomagination initiative has been making it a healthy profit.
In addition to the $10 billion directed at Ecomagination, GE also announced Thursday it has reduced its greenhouse gas emissions by 22 percent since 2004, and reduced water usage by 30 percent since 2006.
But GE has toned down its ebullient growth predictions. In its 2008 Ecomagination report (PDF), GE had said it planned to "strive toward a revenue target of $25 billion and an increase in R&D to $1.5 billion in 2010." While GE reports that it has reached the goal of a $1.5 billion increase in R&D investment early by hitting it in 2009 instead of 2010, the 2009 Ecomagination report (PDF) now sets "a stretch goal of $20 billion in ecomagination sales in 2010."
The Ecomagination program includes development of compact fluorescent lighting,, battery technology, , a hybrid-powered water heater, and a GEnx aircraft engine that promises 15 percent lower fuel burn than its predecessor.
While GE employs about 300,000 people in over 100 countries, the company specifically identified China and South Korea in Thursday's announcement as countries where the company sees green technology poised to thrive.
"Countries likeand Korea, which prioritize and execute clean energy plans on a massive scale, encourage us. Countries that embrace this opportunity will lead and win. As a global company, we are positioned to win with them. We also know the United States and other countries can do the same, but they must prioritize, decide, and then act," CEO Jeffrey Immelt and Vice President of Ecomagination Steven Fludder said in a joint statement.
While the U.S. has invested a tremendous amount of money in green technology over the last few years, GE is dead right as to where green-tech investment and leadership can be found. The Immelt and Fludder statement alludes to hard statistics released earlier this year, and echoes .
In May, the United Nations Environmental Programme (UNEP) book "A Global Green New Deal: Rethinking the Economic Recovery" revealed shocking. While the U.S. and Europe have publicly praised green-tech jobs and investment, and China may be the world's biggest polluter, the UNEP found that it's actually China and Korea that are the most serious investors in green tech.
In 2009, China invested a third of its economic recovery package, which equated to 3 percent of its gross domestic product in green-tech investment. The U.S. in comparison directed 12 percent of the American Recovery and Reinvestment Act of 2009 to green-tech investment, which equated to 0.7 percent of its GDP. While some individual European nations have made it a priority, the European Union as a whole only invested 0.2 percent of its GDP in green tech in 2009. And Korea, a small country compared to an investor like the U.S., invested the equivalent of 3 percent of its GDP in green tech, according to the UNEP statistics.