Opening a new, $170 million battery manufacturing plant in Schenectady, New York, this July, GE CEO Jeff Immelt said, “this is the way GE does start-ups.” What he meant is that for successful innovation, particularly in clean tech, it takes an entrepreneurial ecosystem to nurture a good idea from inception to big, new market.
Those ideas don’t need to languish, or die, because they’re too hard to scale. Larger companies can collaborate with smaller ones and future customers to build an ecosystem that gets needed innovations to market, helping tackle pressing sustainability issues and creating new revenue streams.
Consider the evolution of the Durathon battery, which is manufactured at the new factory, and is the flagship product of one of GE’s newest business units, GE Energy Storage. Since its launch, we’ve announced a number of orders from telecom and grid customers in the U.S. and Africa. The new battery lasts for nine hours, contains more than 30 patents, can recharge 3,500 times (ten times more than regular batteries), lasts for two decades, and most exciting, is based upon innovative sodium chemistry that makes it non-toxic. By design, the Durathon is also recyclable. And it takes up half the space of lead-acid batteries.
Durathon started years ago as a wisp of an idea about how to build the ideal power source for a hybrid locomotive. GE Global Research engineers working on that problem determined that sodium nickel chloride batteries were the most promising. Crucially, as work on these batteries progressed beyond their original business purpose, the company continued to support it—through the acquisition of a British company with deep expertise in the field and as several promising applications crystallized in recent years. In effect, developing the Durathon required building a start-up within a huge company. We call them “Imagination Breakthroughs,” and we’ve been incubating them for over a decade. The resulting business is an entrepreneurial ecosystem, in which an established company with manufacturing know-how works with an early-stage venture to build on internal, exploratory R&D. In this ecosystem, the future customer is also an entrepreneur helping drive the development of the product.
Before the Durathon’s new plant even started operating, for example, South African engineering company Megatron Federal placed an initial order for batteries to keep its telecom installations in Nigeria running during all too common power disruptions. They will also help Megatron decrease its dependence on diesel generators as back-ups, lowering fuel usage and emissions. Once the Schenectady factory opened, Megatron committed to purchasing further batteries. This new market of businesses that support African telecom will continue to grow on a continent where the number of cell phone users climbed to over 600 million at the end of last year and is expected to grow to 735 million by the end of this year. Another big need is helping data center operators coping with enormous energy needs reduce their electricity consumption.
We can see the same sort of entrepreneurial ecosystems being built in other cleantech applications, responding to different needs. Dow, for example, used to make chemicals for plastics at a sprawling plant in Midland, Michigan. Now, with lithium-ion battery start-ups sprouting around GM’s new electric vehicle factories near Detroit, Dow has partnered with TK Advanced Battery and the French conglomerate Dassault Group to manufacture an innovative EV battery, repurposing the existing plant. Dow has the scale and manufacturing expertise to execute a great new idea in cleantech. It takes an ecosystem to carry those ideas from infancy to market. Other big companies, like GE and Dow, need to take on these kinds of challenges and carve out a protected space to incubate start-ups.
- Beth Comstock is Senior Vice President and Chief Marketing Officer, GE. Beth leads GE’s growth and market-innovation initiatives, as well as the sales, marketing and communications functions. She is responsible for GE-wide business platforms ecomagination, dedicated to environmental innovation and healthymagination, focused on developing better health outcomes.