The recent announcement of a joint venture between GE and Abu
Dhabi to finance and build advanced water and energy infrastructure
highlights where American investment needs to be, and why we are
falling behind. 
An analysis of todays announcement of a massive joint venture
between GE and Abu Dhabi offers the most relevant roadmap to date
for the future of high tech infrastructure, specifically the
development of clean technologies. This global movement offers an
amazing view into the future, as the most progressive companies and
goverments in the world hash out collaborative plans to deploy the
latest and best solutions for the global technology elite.
Throughout history the areas of the world with the best
infrastructure have been the dominant forces in global trade and
innovation. In the past it meant the best roads, ports, schools,
etc. GE and Abu Dhabi show us that it is now a cross pollination of
public and private partnership, facilitated by investment
authorities and Fortune 500 companies. As we break down this
strategic partnership piece by piece, we get a glimpse at the
mechanisms in place that are creating the homes, towns, and cities
of the future, and how their interplay effects a larger ecosystem
of innovation. No one can dismiss this as central planning, rather
it is an attempt by government to become more innovative and
responsive to the needs of tomorrow. (cont.)
Imagine a city of the future that is entirely carbon neutral.
Where homes and buildings harness resources in the most efficient
manner. Where the best technologies are being developed, financed,
and deployed. Where the most important companies flock if only for
good PR alone. This world is being created as we speak, and it is
highly relevant to attempt to find out how from a case study
approach so we can wake up as a country. The GE/Abu Dhabi deal has
several ingredients which we can dissect as components of societal
innovation:
1. A strong and well financed investment authority – A
major component of the most innovative and fastest growing regions
of the world. The Abu Dhabi Investment Authority is classified as a
Sovereign Wealth Fund with assets approaching $1 trillion
USD representing the surplus of the state
economy. The Mubadala Development Company is a state owned company
designed to facilitate investment and partnership with companies
like GE, under the direction of the ADIA.
By investing in future related solutions they have had annual
returns in excess of 10%.
2. Intricate Public/private Partnership – A close
relationship with the most innovative companies in the world is
incredibly important. The GE deal is an intricate relationship. The
Mubadala Development Authority will become on of the top ten
shareholders in General Electric. Additionally GE will provide
solutions for the development of infrastructure, approaching $40
billion USD. On top of that GE will
provide $50 million USD for the second
clean tech fund under the Masdar Initiative. The companies will
also create a clean energy technology center in Masdar City, the
carbon neutral city of the future highlighted in previous Memebox
blogs. These intricate deals are part of the reason why GE revenue
is up 50% in the region year over year.
http://biz.yahoo.com/rb/080722/ge_unitedarabemirates.html
3. Venture Funding – One aspect of the GE Abu Dhabi deal
is the creation of several clean technology funds that are
geographically focused. The first clean tech fund, a 250 million
USD fund launched in partneship with
Credit Suisse, seeks to direct joint venture investments in the
realm of alternative energy. The initial fund sought to invest in
companies with products suitable for commercialization in the
United Arab Emirates, accelerating the deployement of
geographically specific technology. Interestingly the fund utilizes
an organic approach whereby seperate investments support one
another, creating a nurturing environment for young companies
unlike the US. http://www.masdarctf.com/
4. Global appeal – Possibly the most basic component of
the development of high tech infrastructure. To become attractive
to the global corporate elite Abu Dhabi has become succesful in
offering a unique value proposition to companies like GE. Within
the Masdar Initiative will be the development of the Special Free
Zone (SFV)The Zone will provide up to 1,500 companies with an
attractive package of incentives, including a one-stop-shop program
of government services, transparent laws, 100% foreign ownership,
tax-free environment and intellectual property protectio, according
to the website
http://www.masdaruae.com/text/spl-free-zone.aspx.
5. Deployment – Where Abu Dhabi is most succesful is in
deployment. By creating the proper supportive environment of the
best minds, the best infrastructure, and incredible amounts of
capital, Abu Dhabi has become very succesful in deploying
technology on a massive scale. America does not have an effective
system of deployment, even if it develops the technology (We still
produce the most patents in the World.) The deployment/adoption
dilemma is central to a society, and requires all of the
ingredients listed above. Essentially Abu Dhabi has created a
fertile nurturing environment that allows for the establishment of
advanced tehcnology on a meaningful level.
With these ingredients in place Abu Dhabi has benefited from
explosive growth. More importantly it has taken enormous steps
fostering a sustainable economy for the future.
As we break down these various components we find that the GE
Abu Dhabi deal is part of a larger framework. In fact it is part of
the Masdar Initiative, “global cooperative platform for open
engagement in the search for solutions to some of mankind’s most
pressing issues: energy security, climate change and truly
sustainable human development,” according to the website of the
same name. By leveraging resources and collaboration on an enormous
scale, they are in fact accelerating innovation and deployment. One
outcome has been the World Future Energy Summit, a symposium of the
worlds renewable energy companies, held annually in Abu Dhabi. An
analysis of the Masdar Initiative will be Part 2 of this Blog Post.
http://www.masdaruae.com/index.aspx
(Image courtesy of Phillip Capper,
CC
2.0)
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