Swiss engineering firm ABB's chief executive says that climate change and India are big on the company's radar
You have invested heavily in emerging markets. Now there is no growth coming from here but developed markets like the US seem to be reviving investments in power and oil and gas. So what are the short term dynamics you have to deal with there?
We have been a net exporter for years out of the developed countries and I want a balance of trade. I don’t want to be a net exporter. The trick is to make sure how do we balance our portfolio in the sense we make investments in areas like emerging economies so that we are not caught off-guard from currency standpoint, or design and engineering capabilities. I can say we are under-penetrated in the US and Brazil and we have more investments to do here in India. The problem is solved to a good extent as the growth is coming from emerging economies and that makes it easy for us to invest there. It may sound logical and simple but the trick is to do it by business unit and by geographies.
In today’s world, it appears that volatility and uncertainty have gone up making the CEO’s job tougher. How do you contend with it?
These jobs are never easy. But they are certainly enjoyable no matter what the situation is. The essence of managing a large company always is resource allocation — labour and capital. Obviously, when there is a recession, there are less resources. You then have to ask how things are going to grow. Where will the opportunities lie?
What I truly believe will grow in developed economies in business related to climate change. Power systems and grid systems that exist in developed world and generating equipment with lot of coal fires have to change.
Even if those economies are the developed one and slow on uptake, governments will continue to support infrastructure investment in renewables. If you take energy and climate change, even in the developed economies that are struggling today, energy savings and investment in renewables would be big. So for me the three major trends are climate change, growth in emerging economies and energy and process efficiency.
Talk of climate change has been going on for seven-eight years. How has it percolated deeper into you business today?
The difference from seven years ago is that people actually believe that climate change is happening. Though there are scientists who argue that it could be just CO2 dominated etc, society, no matter where you are living, seems to believe it is happening.
Within our businesses, there are now people who drive the energy efficiency equation with the process automation and power system business who directly report into me and I report to the board. They get the attention that way.
(This story appears in the 20 November, 2009 issue of Forbes India. To visit our Archives, click here.)