When I began my career, “localization” meant manufacturing in-country, for that country. The common wisdom was that localization could create efficiencies and foster closer ties with local customers. Important rationale to be sure, and beneficial to the local economy, but not necessarily sustainable or scalable. Today, I’m seeing something far more inspiring in countries like Saudi Arabia: Companies that take an authentically local approach, building skills and making lasting investments that can support their local partners in becoming part of a global supply chain, while at the same time cementing their own commitment to the local ecosystem. Authentically local to me means, perhaps paradoxically, investing sustainably with an eye on the global market.
Take what we do in the Eastern Province as an example. The GE Manufacturing & Technology Center (GEMTEC) campus in Dammam supports power generation needs for the entire Kingdom, but it also has extended its cutting-edge capabilities to global markets. The GEMTEC campus serves more than 70 customers in 40 countries, and also features the GE Saudi Advanced Turbines facility, GE’s joint venture with Dussur that can manufacture GE H-class turbines, the world’s most-efficient. Further, research at the Hot & Harsh R&D Lab, also part of the campus, has resulted in 20+ patents that will benefit customers on four continents. This would not be possible without state-of-the art facilities and long-term, authentic investment in building local skills, as well as a strong local-to-global supply chain.
The World Bank estimates that a 1 percent increase in a country’s participation in the global value chain has a more than 1 percent increase in that country’s per-capita income growth, and that companies with increased global value chain participation tend to employ more women than their in-country counterparts. Because of its strong local economy and the ability of its companies and workers to participate in global supply chains, Saudi Arabia is working toward achieving its own goals, while also enabling other countries to achieve theirs. For GE, that is the expansive power of being authentically local.
Rachel Duan is president and CEO of GE Global.