To be a reliable growth company requires the ability to conceptualize the future. We are investing to capitalize on the major growth trends of this era that will grow at multiples of the global GDP growth rate. We are using our breadth, financial strength and intellectual capital to create a competitive advantage.
These are the trends where GE is building leadership:
Infrastructure Technology. There will be $4 trillion invested in global infrastructure by 2015. GE has the broadest array of infrastructure products, services and financing in the world. From Energy to Aviation to Transportation to Water to Oil & Gas, GE is solving customers’ infrastructure challenges around the world. We have more than $120 billion of infrastructure products and services revenues in our backlog with another $60 billion of Infrastructure financing assets generating returns for our investors.
When our customers invest in infrastructure, they are looking for innovation, reliability and financial strength. GE has a leadership position and can deliver for customers in a unique way.
Emerging Markets. These markets include China, India, Eastern Europe, Russia, Middle East, Africa, Latin America and Southeast Asia. They are growing at 3X the global GDP rate based on population growth and high oil prices.
GE had $10 billion of emerging markets revenues in 2000. Today we have $29 billion, and we could have $50 billion by 2010. We have a great set of financial, technical and services offerings that we integrate to accelerate growth. We have already invested in people and capability to establish leadership in these regions.
Only GE has the breadth to adopt a “company-to-country” approach to emerging markets. When we build a healthcare facility in Saudi Arabia, we also build a relationship that benefits GE as a whole.
Environmental Solutions. The challenges of global warming, water scarcity and conservation permeate every part of the world. While government policies may differ, there is a growing consensus among our customers that they value technology that can preserve the environment and achieve productivity at the same time.
Our ecomagination℠ initiative is designed to drive growth by creating innovative solutions to environmental challenges. We have already launched 45 products and have engaged hundreds of customers. When we started, we had $6 billion of revenues in ecomagination products; in 2006, we had $12 billion; and by 2010, we are targeting more than $20 billion.
GE has the technical breadth and credibility and is building partnerships and capability that should secure decades of accelerated growth.
Digital Connections. Our customers are increasingly using the Internet. Digitization facilitates rapid distribution and knowledge transfer to a fragmented customer base.
GE is positioned to capitalize on digitization. We have thousands of engines, turbines, locomotives and scanners in our installed base. These have been digitized, so that we can provide our customers with interactive decision support to boost productivity. These range from simple online tools to improve a locomotive’s fuel efficiency to a web-based electronic medical record. Today, we have $4 billion of fast-growth digital services.
In GE Money, we are originating loans online, which allows us to reach new consumers with tailored offerings. GE is a leader, and could originate $15 billion through the Internet by 2009.
The most important impact of the Internet is in our NBC Universal (NBCU) entertainment business. We are a leader in content and the Internet opens up new avenues for growth. We should hit $1 billion of digital advertising by 2009.
Global Liquidity. Global growth and strong capital markets have created new investment opportunities. Private equity funds have almost $2 trillion of buying power. More than $600 billion of wealth is flowing to oil exporting countries each year looking for investment opportunities.
GE can tap into this liquidity to create investor value. In 2007, we will originate $50 billion of commercial finance assets and sell them to investors. This boosts our returns and growth rates. At the same time, we can partner with multiple funding sources to accelerate infrastructure investments like power plants, airports and desalination facilities. GE can harness liquidity to expand our growth rate and lower risk.
GE’s leadership around these major trends creates a foundation for rapid growth. All our strategies and investments have been applied to build leadership around these trends. GE is exceptionally well positioned to win in the future.
Invest and Deliver
Demographics. Aging populations in the developed world and exploding population growth in the developing world are important trends. Healthcare, GE Money and NBCU are examples of some of our businesses that have benefitted from these dynamics.
We have invested to build a substantial Healthcare business, which could double in size over the next five years. We are a leader in diagnostics with the capability to improve access to care, find diseases earlier and treat them more effectively. We have invested in our consumer finance business which we can double every five years by marketing innovative financial products globally. We have built a strong Hispanic network in Telemundo, which will grow close to 10% per year in the U.S. and has significant global opportunity. GE has the scale to capture these massive global opportunities.
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