In an excerpt from an essay in TIME Magazine, Jeffrey R. Immelt, chairman and CEO of GE, describes why global engagement is an economic opportunity for the U.S. and the world. You can read the full essay in the December 26, 2016 issue of TIME Magazine.
Is globalization bad? Would you believe it if I told you that 85 percent of GE’s jet engines and gas turbines have been sold outside the U.S. over the past 15 years?
I understand that in the experience of some American workers, globalization is not exactly a synonym for progress; they can point to jobs lost rather than gained, companies leaving instead of moving in. It’s true that while all the changes and trends that describe the global economy have been a net plus for Americans, the downside can be easily forgotten. And if you’re living it, you can feel forgotten yourself.
Here’s what I know: Outsourcing is different from globalization—and it’s yesterday’s game. Through the 1980s and 1990s, business looked to the emerging markets as a cheap labor source. Chasing the lowest labor costs is yesterday’s model; digital and advanced manufacturing technologies make the factories of today more productive.
Now we need to go where the growth is. That is what globalization means today.
Global markets are vibrant; emerging economies are still growing more than twice as fast as developed countries like the U.S., and this means there’s more demand. At GE, 70 percent of our orders are outside the U.S. We’re a $20 billion-a-year exporter, and it has only strengthened our position as one of the biggest employers in America.
The reality is this is not easy, and competing for these deals requires flexibility and creativity. Countries are demanding investment in local presence and operations in exchange for market access. These investments in manufacturing and innovation are critical to our ability to win orders. Without them, global competitors would sweep up. U.S. teams would lose, too.
Every now and then I hear politicians make the claim that our government has helped multinationals globalize; that those that globalize are “crony capitalists.” This is complete hogwash. We have a globally uncompetitive tax code. Our regulations have hampered competitiveness, and we are the only country in the world without a functioning export bank. By and large, GE has won globally by its own efforts.
Looking forward, I get a sense of optimism. Every multinational wants to make a positive impact in the world. Across the private sector, more capital will find more opportunities, speeding up innovations in science, digital technology and other fields. In the end, businesses can help drive American job growth by winning around the world.
Jeffrey R. Immelt is the chairman and CEO of GE.