Community Building

The past 50 years have seen a revolution in economic advancement, with emerging economies becoming the powerhouses of growth. But not everyone has participated in this revolution. Two-thirds of the world’s population still live on the equivalent of less than $4 per day, and are held back from using their skills, talents and hard work to better themselves. People in industrialized economies are also facing difficult transitions, as old jobs and sources of competitive advantage are replaced by new ones.

An old saying at GE is that “progress is our most important product.” The ability to continue to grow our business depends on growing and sustaining vibrant economies. These self-confident societies are also the places where people are able to build more prosperous lives, and good places to live.

Some of the most crucial resources needed for sustainable economic growth are human qualities. People who are resilient, skilled and hardworking can create remarkable success. But they also depend on institutions that do not stand in their way, and instead enable them to move forward.

Governments and national institutions are vital to progress. The quality of public institutions is therefore crucial. Where they are undermined by bribery and corruption, it is the poorest who are most hurt by deteriorating public services. Citizens lose faith in government, industry and the rule of law. Crime, conflict and instability erode the quality of life and prospects for prosperity.

Helping to build communities for sustainable prosperity is not so much about “giving back,” but about “paying forward” to help build the foundations that our business needs to grow on. For GE, this means taking a four-level approach, which builds from the inside out.

Developing human capital

We start by investing in the education, health and experience of our own people. GE recognizes labor rights, and offers decent wages, medical benefits, pensions and safe workspaces for its employees around the world. In China, for example, we have offered voluntary, free hepatitis B virus vaccination to all employees. We invest more than $1 billion a year in the training and professional development of our managers and leaders, engineers, scientists, and manufacturing and sales staff around the world, and also invite public- and private-sector leaders to share in the leadership development of our Crotonville Leadership Center. In 2010, we are opening six service shops in emerging markets and formally announce a global research center in Brazil. We are also creating jobs in the United States, including a plan to add nearly 1,200 positions in Michigan to accelerate our capability in manufacturing, and to add 1,000 in Louisville, Kentucky, to make the next generation of smart appliances. We champion employee diversity and inclusiveness, with various employee networks, such as the Women’s Network and Hispanic, African American, Asian-Pacific American and Veterans Forums, helping to sustain a nimble and successful workforce.

Promoting excellence in science, technology, engineering and math education

Scientific and technical education is crucial to competitiveness, and to solving the major problems the world faces. In the United States, the GE Foundation is addressing this education imperative by supporting high-impact initiatives that improve access to, and the equity and quality of, public education. The Developing Futures™ in Education program is one such endeavor, providing funding, curriculum development and skilled volunteers to help raise student achievement in math and science curricula and to promote better management of schools. In 2009, GE Foundation convened hundreds of U.S. thought leaders, including representatives from the United States Department of Education and the National Governors Association. As a result of the program, school districts continued to see improved proficiency levels in math and science, and since the inception of the grants, all districts in total have saved more than $16 million through GE-led projects.

Strengthening the communities in which we work

Between 2000 and 2009, GE incurred almost $23 billion of corporate income taxes to governments in the more than 250 tax jurisdictions around the world where we work. But our contribution does not stop at writing checks. Our commitment to high standards of health, safety and ethical behavior helps create new expectations for doing business in the countries where we operate. GE people actively strengthen their communities through pro bono volunteering with health clinics, school districts and schools. GE programs concentrate on strengthening the civil society organizations and legal and conflict management systems that are all crucial to healthy societies. In China, for example, GE lawyers teach courses at Shanghai’s Jiao Tong University and collaborated with Sun Yat-Sen University to develop an EHS Academy. GE not only assists in developing the curriculum and providing expert trainers — we encourage local suppliers to send their EHS managers to courses at the Academy. This pays off for GE in terms of better supply-chain compliance, but it also benefits the local economy by building the cadre of EHS professionals needed for industry to meet international standards. Through GE Foundation we provide support for Partners for Democratic Change, helping establish national centers for change and conflict management in 10 emerging markets.

Engaging policy makers

Globally, societies are working to develop new risk-oversight frameworks to foster financial stability, agreement on greenhouse gas emissions to stop climate change, trade rules to promote growth and intellectual property rights to support innovation. These are also global public policy priorities for GE. GE continues to play an active role in advocating for global rules on emissions, and for agreements to reduce tariffs on green products. In addition, we engage with public policy-makers around the world on issues that relate to national priorities and GE’s strategy. In the United States, we have been particularly focused on healthcare reform. In Vietnam, we worked with both the Vietnamese and United States governments to improve trade relations and support Vietnam’s accession to the World Trade Organization. In China, we liaise with academics and policy makers to understand and influence legislative developments and participate in government advisory groups and drafting committees.

We believe that aligning our business strategy with public policy priorities is the best way, indeed the only way, of achieving long-term business success and sustainable development. At the same time, GE is a business, and not a development agency or a public body. Our investments in community building are focused on contributing to the success of our business, together with the societies we work in.

We recognize that any business that is promoting a view on how best to achieve public policy goals while also advocating for its own commercial priorities runs the risk of running into conflicts of interests both real and perceived. There are legitimate concerns that businesses may influence public processes unduly to achieve private ends, or conversely may lose commercial focus by aligning too closely with governments’ goals. Just as we must continually innovate our products and services for better human impact, we also need to continually fine-tune our approach to engaging with the communities and governments where we operate to ensure that it remains fair, legitimate and effective.