As yesterday’s release of the “GE Global Innovation Barometer” underscored, there’s a growing global consensus that some of the world’s toughest problems — especially those in the energy sector — will require partnerships to solve them. Today, GE announced another major step in that direction with the formation of a new joint venture with ConocoPhillips and power plant operator NRG Energy that will invest $300 million in innovative energy technology companies.
In GE’s first-of-its kind survey of 1,000 business executives in 12 countries, 86 percent said that 21st century innovation is about partnerships between several entities as opposed to the success of a single organization. The reason: Today’s problems are interconnected and often universal, yet there’s not a one-size-fits all approach to solving them. That means drawing on innovations happening at all levels — from individuals to big companies, and in multiple countries — and then finding ways to bring them to scale.
As The Wall Street Journal noted in its story today about the new team-up (subscription required), “The involvement of such large corporations comes at a time when many energy technology companies have been struggling to find capital to grow their businesses much beyond the start-up stage.”
The new company will invest in about 30 companies, primarily in North America, Europe and Israel. Three companies with potentially game-changing technologies that GE has already invested in will be the first to get funds from the new JV. Solar company Alta Devices; Ciris Energy, which is developing cleaner coal technologies that convert coal into natural gas; and non-food biofuels company CoolPlanetBioFuels, which we recently featured on GE Reports.
Further underscoring the new push for innovation through partnerships that was identified in GE’s survey, the new JV is the first corporate venture investment program by both NRG Energy and ConocoPhillips. GE Capital — through its business units GE Energy Financial Services and GE Capital, Equity — is already among the world’s most active energy tech investors.
The new team says the possibilities for the new JV are immense. It can speed the invention, development and commercialization of new technologies; draw on the deep sector expertise and relationships of the three partners — all of which are major players in energy; and beyond investment, the JV partners can help commercially deploy the new technologies at a larger scale.
Today’s venture capital JV follows GE’s recent push into open innovation via its $200 million ecomagination Challenge, which just launched its second phase that focuses on powering the smart homes of the future. The Challenge not only seeks out the best ideas from individuals and small enterprises, but it brings together GE’s investment funds — and those of four venture capital partners — to take some of the best ideas and scale them up so that they can make a real difference.