The steady growth of the middle class across the globe will help to drive infrastructure demand over the next several years, says John Rice, the vice-chairman of GE.
Many firms do financial services, but only a few make jet engines or use3D printers, says Mr Rice. APICHART JINAKUL
Mr Rice, also president and chief executive of GE Global Growth and Operations, said GE expects to see 10-15% growth in emerging markets over the medium term.
"There are 150 million people joining the middle class each year, with 75-100 million in Asia. With a rising middle class, you have real demand for infrastructure," he told the Bangkok Post in a recent interview in Bangkok.
Globalisation and the rise of social media are also helping drive demand, as citizens across the world can now easily compare and contrast the level of public services available in other countries through the internet.
"Social media are placing tremendous pressure on governments to produce. Politicians can say all they want about reducing the income gap. But if you don't have electricity, nothing will change."
While the lower global growth environment has affected infrastructure investment, Mr Rice said underlying demand remains but financing in the wake of the global economic crisis is more challenging.
"The European banks are gone, and the ability to put together long-term project financing has fallen. I don't see that changing," he said.
While GE continues to explore options on divesting consumer finance assets across the globe, it has at the same time strengthened its internal resources to help clients with project financing.
"Whether it's a power project in Ghana or Indonesia, or a biofuel plant in Thailand, how to connect capital must be a core expertise," Mr Rice said.
Over the past decade, GE has returned to its roots as a company focused on industrial products and services. In 2007, the company sold off GE Plastics, while in 2009 it started the process of divesting NBC Universal to Comcast, a deal completed earlier this year.
"We are now more tightly focused and have reinvested US$25-30 billion in capital in our oil and gas, power generation and transportation businesses," he said.
GE Capital, the group's financial services arm, has been reducing its assets as the company focuses on infrastructure.
"With $600 billion in assets, we were the biggest non-bank bank in the world. Half of our income came from financials," Mr Rice said.
GE expects the contribution of financial services to fall to one-third of total profits once its reorganisation is complete, primarily in commercial financing.
In July, GE Capital formally announced a deal to sell its 25% stake in Bank of Ayudhya to Bank of Tokyo-Mitsubishi at 39 baht per share or 60 billion baht.
Despite its successes in areas such as credit cards, Mr Rice said: "You have to put a primary focus on areas where you excel. Our infrastructure business is centred on finding solutions for our customers in areas like energy, health care and transportation, spaces where we have huge amounts of expertise and clear competitive advantages.
"There are lots of people in the credit card business; there are not a lot of people in the jet engine business."
Innovations such as 3D printing or additive manufacturing will have a profound impact on GE in the future.
Mr Rice said the technology will help to result in the convergence of design and manufacturing. Now in limited use with the company's aircraft engine business, the innovations would eventually be leveraged for the manufacturing of gas turbines and its oil and gas businesses.
Another key trend is the increasing convergence between "big machines" and "big data". Aircraft engines or wind turbines, for instance, collect massive amounts of data about their use and conditions, which can be collated and leveraged to help lead to greater efficiency and lower costs of operations and service.
"For airlines, 60% of their costs is fuel. With data, we can model new ways of flying a landing pattern. If you see just several percentage points of efficiency gains, that means billions of dollars per year," Mr Rice said.
With 9,000 software engineers on staff, GE already ranks as one of the world's largest software companies.
GE recently delivered ultrasound tablets to rural midwives in Indonesia. The tablets allow midwives to conduct ultrasound scans, which can be wirelessly transferred to secondary or tertiary care experts.
"You can't have a world where 2 billion people don't have access to health care," he said.