The launching of the Edison Electric Company . . . is noteworthy in that it inaugurated a phase of increasingly close relations between big business and technology in this country.
Matthew Josephson, in his biography of Thomas Alva Edison.
As the General Electric Co. celebrates its 100 birthday this month, it also observes a remarkable century of technology applied to business that has turned an initial $50,000 investment in Thomas Edison's incandescent light experiments into the world's largest diversified industrial concern.
From the invention of the light bulb to the development of steam turbines and the entire power generation system to supply electricity to the marketing of numerous appliances and gadgets to plug into home wall sockets, GE has spanned the electrical era - both creating it and stimulating its rapid growth.
Meanwhile, related technologies and the fruits of its well-financed research laboratories - the first established by any corporation in America - have put GE into a profusion of other fields.
This year GE will amass nearly $1.2 billion in profits and $20 billion in worldwide revenues on sales of everything from nuclear reactors to electric vegetable peelers.
Ge makes jet engines for commercial aircraft, turbines for utilities, locomotives for Amtrak, weather satellites for the government. And it sells large quantities of metallurigical coal to Japanese makers.
GE also supplies the high-strength engineered plastics that are replacing metal on automobiles, and the company developed the synthetic diamonds that are used for drilling bits. It also recently has taken the sales lead in compurterized medical diagnostic equipment.
GE developed the concept of computer time-sharing in the 1960s, and is a major supplier of computer services today. And through its GE Credit Corp., it finances everything from consumer installment purchases to super-tankers.
Last week, the company introduced a four-passenger electric car with a rechargable battery and a 45-mile range which it calls the "Centennial Electric" and which containes components from 12 different company divisions.
And, by the way, GE remains the leading manufactuer of light bulbs, or lamps as the company prefers to call them, of every variety, size and level of technical sophistication.
"Progress Is Our Most Important Product" was once its advertising slogan. And both its origins and track record have given the company a strong belief in the continuing value of technology and the benefits of a well-financed research and development program.
Last year, GE spent $463 million on R&D, with another $600 million coming from government-sponsored research. This is scheduled to increase more than 10 percent in 1978, and the company consistently has upped its real dollar commitment to R&D over the last five years, despite the severe recession that hit the economy and many industries.
"We just see research and development as so vital to the company that we can't reduce efforts in that direction," said GE's chairman and chief executive officer, Reginald Jones, noting that GE has "received more patents from the U.S. Patent Office than any other domestic company year after year."
In fact, the company averages four new patent registrations every single day.
"GE has a tremendous respect for technology, and they attempt to parlay their technology ability into a strong market share," noted Robert Cornell, an analyst with Paine Webber Mitchell Hutchins, and a leading GE watcher.
"GE never gets into a business unless they feel they can bring something technologically superior to the party," he said. "And when it works, it pays off handsomely. But while it creates some tremendous corporate successes, it also brings about some failures."
Areas in which GE has struck out or failed to carve out a niche commensurate with what are considered to be its technological capabilities and market power include nuclear reprocessing, semiconductors and color television.
At the same time, serendipitous GE lab developments have provided the company with innovations in engineered high-performance plastics technology that have for outstripped developments by competing chemical giants and given GE one of its fastest growing and most profitable divisions.
"Who would think that the handful of organic chemists and chemical engineers GE has would be able to bring out new products in the face of the Dows; and Du Ponts and Monsantos and Carbides and Hercules," said GE's senior vice president for corporate technology, Arthur Bueche. "But the fact is that General Electric over the last 15 years has brought out more new plastics than all of those companies combined."
Jones and GE have been all the forefront of industry efforts to reverse the declining trend of U.S. expenditures on R&D that have gone from 3 percent of this country's gross national product in 1964 to 22 percent today - a drop which many feel has put this country at a growing competitive disadvantage in world markets and contributed to our mammoth trade deficit.
And the company's highly visible chairman meanwhile has been one of the most influential voices in the high councils of big business and in Washington where he has pushed hard and effectively behind the scenes for the kinds of investment tax incentives that are now making their way through Congress - incentives Jones believes are needed to increase the "innovation process."
The GE chairman recently told an audience of scientists that "by taxing away the gains of those investors who take a chance on high-risk technology or new ventures, we are teaching our businessmen to think small and play it safe."
But for GE - as for society as a whole - technology has not always been an unmitigated boom.
The all-electric home of the 1960s which GE waa promoting heavily became an embrassment when the energy crisis hit and the cost of the electricity soared.
And GE's continuing commitment to nuclear energy has produced the most glaringly unprofitable area for the company, as early assumptions about the cheap nuclear option for untilities have been undermined by soaring costs due to inflation, miscalculations and delays and a growing public opposition that has brought net new plant additions to a complete halt and changed the economics of nuclear power drastically.
Over the last few years, GE has been losing between $15 million and $25 million a year on its nuclear operations, and expects that to continue for "the foreseeable future."
While GE continues to have a strong commitment to nuclear power generation - putting the issue in almost patriotric terms - company executives acknowledge that hindsight has put the business in a different light.
"I expected if we were looking at the nuclear business now as an entirely new business, we would probably be much more conscious of these public concerns," said Jones.
"We have always felt there are technical answers to these problems of waste disposal and nuclear proliferation," he added, "but we do recognize that there are also political and social considerations today, such as where are you going to bury these wastes, that we didn't give enough attention to at the time we launched the business. But we felt very stronly then - as we do now - that nuclear has to be one of the energy resources the world will turn to in the years ahead."
More controversial to Wall Street analysts than the nuclear program is GE's acquisition of Utah International in 1977 for $1.6 million a major diversification more into natural resources, which the company openly acknowledges takes it away from "its origins in core electrical technologies."
GE explains the acquisition of Utah which is primarily a mining company, with Brazilian iron ore interest and enormous high-grade coal resources in a giant Australian mine - as a way to increase the corporation's long range growth potential, a way to enlarge its international exposure, and as a hedge against the kind of hyperinflation that hit the company in the 1973-74 commodity boom when raw materials prices soared out of sight.
The jury seems to be out on the ultimate wisdom of the Utah merger - the largest acquisition in U.S. finance - and the initial elation in the investment community about the company's potential has given way to some doubts about the outlook for coal and other raw materials given the current world commodity glut.
"The ultimate measure of Mr. Jones will be what happens with Utah International," said Cornell. "It's been disappointing so far. Jones has changed the corporate direction of the conpany away from the core technologies. This has added uncertaintly to earnings and reduced the stock multiple accorded GE."
But setting aside the Utah acquisition Cornell said he would give Jones, 62, who has been GE chairman since 1972, "an A-plus for overall management."
Considered by some observers to be the single best managed corporation in the world, GE has been reorganized recently into six sectors and, below that, 62 "strategic" business units."
With a company as widely diversified as GE, this organization permits top management to annually evaluate each unit - using mathematical matrices - to decide whether it merits increased investment for developments, or whether it has matured and is ripe for "harvesting" which is the term the company employs.
It permits actual company operations to be widely decentralized, while overall company risk, exposure and direction are carefully controlled from the top.