Siemens Sees Green Tech Driving Economic Growth

Siemens Sees Green Tech Driving Economic Growth

In the past two years, Siemens has changed its organization to become more sustainable over the longer-term.

The world economy is undergoing a "paradigm shift" toward sustainability and green technologies, Siemens AG President and CEO Peter Loscher recently told the U.S. Chamber of Commerce. In the past two years, Siemens has changed its organization to become more sustainable over the longer-term.

"Growth and jobs in the future will increasingly come from these technologies," Loscher notes. "More industrialization and more growth will arise from the current crisis. And the color of this industrialization will be green."

Despite the economic downturn, Loscher urged companies to stay focused on the broad trends of "climate change, demographic change, urbanization and globalization. These are megatrends that have remained constant, even as Wall Street firms collapsed."

Siemens has reorganized into three sectors -- industry, energy and health care -- to reflect its focus on the megatrends of health care, energy efficiency and environmental protection.

Siemens AG President and CEO Peter Loscher: Stay focused on "climate change, demographic change, urbanization and globalization."

Action to solve climate change will not slow down in the recession, Loscher said. Rather, energy-efficient technology will become a $3 trillion market by 2010 -- amounting to more than one-quarter of the current U.S. GDP, Loscher said.

The Obama Administration has called for 25% of the energy in the United States to come from renewable sources by 2020, Loscher noted. The stimulus programs call for $8 billion to be invested in high- speed trains and more than $4 billion to be invested in smart-grid technologies, areas where Siemens has a strong position. Shifts are also being seen in labor:

"By one estimate, there are 8.5 million jobs in energy and renewable-energy industries in the United States already. And that could jump to 40 million jobs by 2030," said Loscher.

"We at Siemens believe sustainable technologies will become the basis for robust long-term growth for companies that invest now and do not wait until the economy rebounds."

Siemens expects around $21 billion in new orders from stimulus programs worldwide over the next three fiscal years. Green technologies are expected to account for about 40% of this total.

Saying the company is "bullish" about its green technology portfolio, Loscher noted that environmental technology accounted for $26 billion in revenue in fiscal 2008 and forecast that revenue from that sector would grow 10% annually, reaching the $35 billion mark by 2011.
Since 2002, Siemens has helped reduce its customers' CO2 output by an amount roughly equivalent to the combined CO2 emissions of New York, Tokyo and Berlin.

In the United States, Loscher said, Siemens has been making significant investments in renewable technology, including a wind-turbine blade manufacturing facility the company opened in 2007 in Fort Madison, Iowa, and a facility in Elgin, Ill., which will begin manufacturing wind-turbine gears this year.

In May, Siemens also announced a $50 million investment to manufacture wind turbine housings in Hutchinson, Kan.

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