Despite its rather extraordinary success with the Ecoimagination initiative, GE Chairman and CEO Jeff Immelt is pretty realistic. The speed at which smart grid innovation is occurring and the scale at which deployments will happen requires a level of R&D collaboration that simply can’t be supported by any one company.
That means GE needs to crowdsource. Fast.
Not because it is particularly altruistic, but because the more quickly it can get an ecosystem in place behind the smart grid, the faster its own sales will accelerate.
That’s the motivation behind the company’s $200 million open innovation competition — which seeks to rustle up “breakthrough ideas” that are targeted at what most of us call the smart grid but what Immelt likes to talk about as “digital energy technologies.”
GE has called upon venture capital firms Emerald Technology Ventures, Foundation Capital, Kleiner Perkins Caufield & Byer, and RockPort Capital to help spread the word over the 10-week duration of the contest. Immelt says GE is looking for ideas — big and small — in renewable energy, grid deployements, and smart homes and buildings. These firms, as well as independent advisors and analysts, will help GE sort through the entries; the company will also allow the general public to vote.
The big carrot: not just some money to think things through, but commercial opportunities in the form of distribution relationships, R&D validation, and partnerships that might help smaller start-ups get products to market more quickly.
The money given to award recipients could be a (mere!) $100,000 for smaller ideas or even big equity investments. Regardless of the dollar investment, Immelt says he wants to use the industrial clout of GE to get these technologies to market more quickly than might otherwise be possible. “We want GE to be a good aggregator for innovators and for our customers,” he says. “In GE, we have lots of great researchers but we’re not going to invent every idea.” (One great example of this is the WattStation, an electric vehicle charger that GE you could see as soon as next year.)
Or, put another way, GE is thinking “Big, Small, Big” marrying the scale of a company company with the speed of a small company and the ecosystem of opportunities created by some of the sizable digital energy markets — especially in places in where there isn’t a lot of electric grid in place already.
Plenty of companies — IBM, Intel and Google are the ones that jump to mind most quickly — are placing substantial bets on clean-tech innovation in the form of funding. Venture capital investments were up something like 65 percent this year, and corporate investments were a big part of that.
The thing that is unique about GE’s move is the quite enormous influence it has on distribution of these technologies and on the consumer mindset. There are thousands of retailers and dealers representing and servicing appliances all over the world. That distribution is quite clearly the thing its using to attract potential innovators. For all their technology industry might, IBM and Intel still are very commercial/corporate brands, and while Google’s name is probably pretty well-known, if you don’t use the Internet, you don’t understand its worth. True story.
Whenever VCs are involved with something, you know a liquidity event is implied. While GE isn’t necessarily going to buy any of these companies, there’s nothing to say that it won’t. And these VCs are smart: the biggest thing standing in the way of smart grid and meter deployments in the United States in particular is consumer mistrust.
Ecoimagination has already produced something like $70 billion and its own internal R&D spend will be $10 billion between now and 2015. (That’s around 5 percent of the company revenue.) It you were to pluck the business unit and set it outside of the GE umbrella, the company would stand alone as a formidable corporate entity on one of the Fortune lists. You can read more in GE’s latest sustainability report from a couple of weeks ago.
Immelt says Ecoimagination will release approximately 30 products over the next 24 months.
Will yours be one of them?
- Video: GE CEO announces new smart-grid initiatives
- Video: The WattStation: GE’s new vehicle charging device
- With Nucleus smart meter hub, GE targets home energy management
- GE unveils WattStation electric vehicle charger; design by Yves Behar
- GE offers $200 million to crowdsource smart grid innovation; takes page from DARPA
- BNET: Why General Electric is Pouring $10B into Its Ecoimagination Brand
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