We should heed GE’s idea on innovation
Sometimes all it takes for perspective to be restored is to hear someone like Jeff Immelt, the chairman and chief executive of GE, talk about his fundamental belief that the challenges facing the energy sector can be solved with technological innovation.
In fact, while there are those who think differently, Immelt says the oilsands is “a dream come true” because it demands the application of innovation and technology — which has been the hallmark of GE throughout its 140-year history.
“It’s not technically out of reach. This isn’t like sending a man to the moon. Whether it’s SAGD (steam-assisted gravity drainage) or energy conservation, there are ways to improve the carbon footprint of the oilsands and there are ways to do it economically that are driven by a combination of technology and business,” said Immelt during an interview with the Calgary Herald on Wednesday morning.
The question is how all this comes together.
Some of it is through working with its customers — whether engaging in collaboration with specific companies in the energy sector, supporting projects underway within the Canadian Oil Sands Innovation Alliance that GE sees as having potential to address pressing issues or looking to a technological version of crowdsourcing to bring new ideas to the table.
On Tuesday, GE announced the signing of two agreements involving COSIA companies.
One allocates $5 million to a water treatment pilot project underway at a Suncor test facility expected to reduce water use, energy consumption and greenhouse gas emissions, all of which will contribute to decrease operating costs.
The second, which could total $13 million, was in the form of a memorandum of understanding with six member companies of COSIA to pursue other joint venture industry projects aimed at developing technologies to boost environmental performance.
But perhaps more interesting was GE’s bringing of the open source platform for innovation to the oilsands puzzle, with the announcement of a $1-million prize for anyone who can bring forward a viable technological solution to decrease greenhouse gas emissions in the oilsands.
In other words, it’s the crowdsourcing approach to solving problems and is part of what GE calls its “Ecomagination Global Challenge,” which is the company’s commitment to building innovative solutions to address environmental challenges. And in case anyone is wondering, when GE announces something like this, it gets noticed; when the company launched its Smart Grid challenge, it received more than 4,000 submissions.
Immelt sees this approach as a catalyst for change and believes so strongly in accessing as many minds as possible to solve problems that GE has taken an equity stake in a New York-based company called Quirky, whose tag line is “we make invention accessible.”
With 325 products developed by a community of more than 933,000 inventors, Quirky’s mission statement says, “We believe the best ideas in the world aren’t actually in the world ... they’re locked inside people’s heads. We exist to solve that problem.”
But from a broader perspective, whether it’s the crowd sourcing, working with COSIA or taking a stake in a company like Quirky, this all speaks to the importance of multi-disciplinary collaboration and the need to break out of traditional silos if there is a hope of solving the big hairy problems that confront both business and government today, regardless of industry or geography.
In addition, says Immelt, it’s really important to speed up the innovation cycle.
Because the world is changing so quickly, gone are the days where companies would hoard cash, sweat over the development of new products, ensure the supply chain and distribution channels were entirely in place before launching a product.
Today, it’s about working with an idea that can be of use to a customer, developing a prototype with the customer’s input and some measure of financial commitment and thus being able to understand within a much shorter time frame if the technology will be viable.
Another change Immelt was keen to talk about on Wednesday was how traditional industrial firms, including those involved in the resource extraction business, are increasingly relying on analytics to optimize their businesses.
In fact, Immelt said, industrial companies are in the process of becoming software companies because of the need to harness big data.
And one of the better examples of that, other than perhaps a jet engine, is a pipeline.
“If you want to make a pipeline work better than anyone else’s pipeline, some of that is about physics and some of that is about analytics,” he said during a luncheon speech at the Westin hotel on Wednesday hosted by the Women’s Executive Network. Here is but one example: GE has long provided pipeline companies with pumps, motors, turbines and other equipment needed for operations. That’s now been married with GE’s ultrasound technology developed for the health-care sector (there’s the multi-disciplinary factor again) being mounted on the so-called “pigs” that go down a pipeline to gather data about pipeline integrity. That data is then interpreted and given to the pipeline operators and gives them the information they need for things like preventive maintenance.
Here’s the proverbial “a-ha!” moment:
The energy sector — like so many other industries — is no fan of downtime. Thus, if more data can be captured and analyzed, whether in the context of exploration, development or transportation, a number of key variables fall into place, with perhaps the two most important being better risk management and increased efficiency.
If the old model in Alberta for finding new solutions to energy development was the Alberta Oil Sands Technology and Research Authority (AOSTRA) because capital was limited and government was critical to the process, the new model involves a combination of COSIA, companies external to the industry such as GE, academia and a measure of government involvement that comes from more of a regulatory angle.
Cast in that light, things become even more exciting.
One idea that is in the realm of possibility, said GE Canada’s president and CEO Elyse Allan, is the creation of a centre of excellence in pipeline inspection, technology and monitoring that doesn’t exist today.
“When you think about it, the Canadian pipeline companies are world leaders but despite that the world still wants more,” said Allan on Wednesday.
Indeed, Immelt said he sees GE localizing some of its analytical skills and capabilities in Calgary to be closer to the pipeline customers.
But does GE have the credibility to give comfort to those who believe there is no such thing as pipeline integrity?
“I think we do. There’s two ways to think about that. By demonstrating the long-term success of the technology and by saying, ‘If this fails, I am willing to pay a penalty. I am willing to put my money where my mouth is’ — and we do that in many other industries,” Immelt said.
It has often been said that it will be the next generation of technology that facilitates the full realization of the resource wealth that sits in this province. And, between speaking with Immelt, hearing about GE’s enthusiasm for solving the puzzle of the oilsands by applying its approach to innovation as well as the projects underway at COSIA, it might just be that this new journey is well underway.