Technology for Good: GE’s Evolution from Financier to Green Tech Start-up Investor

This is the fifth in a series of posts entitled Technology for Good: A Historical Perspective From GE.  Last week, GE released all their of annual reports in one interactive data visualization.  This interactive data viz  pulls together 120 years of their annual reports, showcasing GE’s long-standing tradition of technology for good. Learn more about GE’s history of innovation and see GE’s new Data Visualization in action.  GE is a 3p Sponsor.

In 1905 GE established the Electric Bond and Share Company to provide financing to small local utilities. Already in business for a quarter century by that year, GE realized that capital flow and capital were crucial for conducting business.

Since that venture into a space that had traditionally been left to banking, GE’s financial services have morphed into a global power in its own right. Over a century later, that precursor to GE Capital now employs over 60,000 people and manages more than half a trillion dollars in assets. Its portfolio is both huge and diverse: aviation, communications, entertainment, healthcare and real estate are among the businesses in which GE regularly finances.

Over 90 years after its earliest origins, GE had a crucial role in resolving the financial crisis that rocked Asian banking systems. In 1998, GE Commercial Finance developed a rapid valuation process that bundled 30,000 loans from 56 different firms. Developed at the time enormous loan auctions were held in Asia to restore liquidity, this approach helped stabilize global markets.

How GE Changed Over the Past Decade

And as we again head towards a time of uncertainty with challenges ranging from climate change to water scarcity, some of GE’s most important investments ever are the ones that the company has financed in recent years.

Now finance has become an important part of GE’s ecomagination program. The breadth of industries in which GE has invested has help spur innovation from battery technology to energy efficient home appliances.

Look at GE’s Ecomagination Value Calculator

Following up on GE’s legacy of creating new and better products for houses, in July 2010 ecomagination launched a $200 million challenge, Powering Your Home. This open call to action brought together businesses, entrepreneurs, innovators and students to collaborate and create breakthrough technologies. The results were five innovation winners and 10 commercial partnerships with new ideas including wireless power transmission, solar and home building kits.

Drivers and Impact of Innovation

One of the winners was Project Frog, the technology of which improves traditional building construction methods with pre-engineered energy efficient building components. Project’s Frog’s melding of high-tech design and low-tech assembly allows for higher quality, more environmentally responsible and cheaper construction to occur.

GE’s aggressive investment in ventures like that of Project Frog has hardly slowed down. The company also has a $20 million fund outside of the ecomagination challenge to finance non-equity investment in GE businesses and startups.

Take a Look at 2011 Through GE Visualization

GE’s ability to stand tall as one of the ten largest American companies is in part because of the company’s ability to transform its business model with the times. After all, 107 years ago, GE finance humbly began with its financing of regional utilities that relied on fossil fuels for power. Now as the world eyes a future of diminished and expensive fossil fuels, GE’s continued strong performance during the 21st century has its foundation in its commitment to clean energy and green technologies.

Leon Kaye, a history and international business major, is a journalist, sustainability consultant and the editor of GreenGoPost.com. He also contributes to Guardian Sustainable Business and Inhabitat. You can follow him on Twitter.

Photo courtesy GE Reports.