Nani Becalli is president and CEO of GE International.
To read a shortened version of this interview, please click here.
If you were writing the EU's 2020 strategy, what would be different?
My job takes me around the world, where I meet many different institutions, bodies and leaders, and when I look at the ambitions that these have, they tend to focus on creating jobs, fostering innovation, climate control, social well-being and so on.
When I look at the EU 2020 targets, they are no different to the goals of other countries around the world. So while the EU's targets are good and necessary, they are not ambitions that make Europe different from China, the US or Brazil.
My personal opinion is that EU 2020, as well as seeking to create more jobs and working to promote innovation, should highlight the need to change the way Europe is right now.
The EU must be more powerful, more cohesive, an entity where people can identify themselves as Europeans rather than just from a given country.
I think the most important objective today is continuing the progress in re-engineering the EU's processes, ensuring that we have a homogenous economic policy, a homogenous foreign policy and a homogenous security policy.
So while the EU 2020 targets are good and necessary, they should be accompanied by the push for a more fundamental change. There should be a big effort to improve the education of Europeans, in the social and civil sense, to develop this European identity.
Aren't we a long way away from that? Is the current financial crisis and institutional confusion over the Lisbon Treaty not making things worse?
We need to accelerate this progress - unfortunately, the present selfishness of the member states is proving a big obstacle to this, and they need to be more prepared to give something up to reap the collective benefits of a stronger Europe.
Europe can be the biggest, most powerful entity in the world – more powerful than China or the US. If you look at the cumulative GDP of Europe, it's bigger than either of those.
If I could wave a magic wand, and take out all the barriers that still exist in our common market, this would be a significant first step. There are still a ton of barriers.
Why are our businesses not as big as American businesses?
Because we can't leverage the size of our market to its full extent. American companies, including GE, have this impeccable home market of 300 million people where they can build economies of scale that allow companies to bring costs down and be very competitive.
In Europe, due to these various barriers which still exist, European businesses can't take full advantage of the single market. We have a huge hidden power.
Which actors is a large diversified company like GE primarily dealing with in 2010? Are you moving beyond dealing with EU member states and going directly to regions/local authorities?
It's very interesting. There is definite movement from the regions and the cities – I believe the genesis of this movement lies in the economic crisis. Because of stimulus packages, a ton of money was delivered into infrastructure.
We [GE] tried to be involved in this as much as possible, and while our usual government relations, with ministers, chancellors and so on, were important, these weren't the people signing the cheques. The cheque was being signed at the regional or city level.
So we've been moving down the institutional layers in the member states, and talking directly to regions and cities, and at present we have a huge initiative with cities.
We are currently cooperating with 10 cities worldwide to see how we can develop the company-city partnership, in our case to explore how we can provide products and services to satisfy their needs.
In Europe, these are: Rotterdam, Hamburg, Lyon, London (because of the Olympics – GE is a general sponsor of the 2012 London Olympic Games) and Copenhagen.
New EU Commissioner for Regional Policy Johannes Hahn seems to focus very much on cities in his speeches and strategy outlines. Do you think this makes sense?
This is a valid strategy. You see the increasingly proactive role played by cities, for example in the way mayors are getting together to identify common goals.
Everyone says Copenhagen was a failure. Well, it might have been a failure from the point of view of big countries failing to get an agreement but in other ways, it was a success, because on the way to Copenhagen, cities in particular began to sensitise people to the need for action. The seed of coalescence between cities was planted – cities getting together, sharing opinions and best practices.
What's your assessment of current EU innovation strategies?
Innovation doesn't come from the top, it comes from the bottom up. Google and Microsoft weren't created by governments.
I don't believe in top-down directives on innovation. I do believe the Commission could act as a provider of venture capital, and could provide a stronger emphasis on education, for example through organising competitions in schools to foster understanding of entrepreneurship and innovation.
The new innovation commissioner has a budget of 86 billion euro to use as venture capital and set up programmes to improve educational initiatives. Innovation is created in schools and universities. The EU needs to spend money to make these things happen, in conjunction with removing the barriers still hampering the single market.
Attitudes need to change in Europe. There is still too much stigma attached to businesses which fail, compared to the US where entrepreneurs are encouraged to dust themselves off and start again.
Also, at present the EU has neither the venture capital funds of the US nor the huge government investment of the Chinese to stimulate innovation and entrepreneurship.
Concerning SMEs, the key is to create better channels for finance, improved capability to open a company in a short period of time, while also paying attention to maintaining big companies which are a major source of growth and jobs in Europe.
We need to take the cork out of the system so we can finally work to our potential. China and India have the kind of spirit and attitude we need to release in Europe.
So who will bring about this type of change? What is your opinion of the current crop of EU leaders?
This is a purely personal opinion, and there are so many leaders with good intentions, but to me people like Mario Monti or Neelie Kroes have not only worked hard but achieved good results.
One of the main problems in Europe is how slow-moving the changes are, which means dynamic leaders can't spring up as quickly as they do in other parts of the world, which brings me back to the need to remove barriers, and so on.
We’re running with an iron ball attached to our foot.
