General Electric’s interest in emerging markets may have once been related to cheap labor and low cost manufacturing, but it appears, with their interest and investment in Africa, perhaps their strategy was more sophisticated and long-term.
In the Economist article “the Emerging Emerging Markets,” Adrian Wooldridge admonishes that the BRICs are not as viable as they once were and investing companies are seeing diminishing returns. Instead he advises, look to “overlooked” countries that can rival the BRICs in terms of prosperity; and “frontier” countries that are only just beginning to emerge from their chrysalises. Africa is one such “overlooked” market in which GE chose to invest their technology and finances.
In cooperation with the Algerian Energy Company (AEC), GE formed and funded the Hamma Water Desalination SpA (Hamma), Africa’s largest seawater desalination plant. The Hamma project is part of GE’s ecomagination effort, which is aimed at building innovative solutions to difficult global problems, like water scarcity. Additionally, in the past decade, businesses, like GE, have discovered water as both a vulnerability and an untapped opportunity. Businesses can now gather the data to tell them how efficient (and costly) their water use is. GE Water, a division of the larger company, is one proposed solution to this issue. While employing 8,000 employees at 50 manufacturing facilities worldwide, they are generating about $2.5 billion in revenue. This is modest revenue in their estimation and in comparison with the company's other divisions. But, while making this revenue and investing in Africa's infrastructure, they have the added benefit of the learning about Africa's labor force and emerging economy, and forming partnerships that may be beneficial as BRICs become less viable. All the while, GE water is creating “advanced membrane and separation solutions technologies” that can be used to generate profit with other corporate customers in the pharmaceutical, manufacturing and beverage industries.