study and track. so science and technology is absolutely critical. in ge over the last decade we've got from 2% of our industrial revenue in r&d to 6% of our industrial revenue into r&d. in 2012 we'll launch more new products than any year in our history, roughly twice our historical average. regardless of company, regardless of region, we think that a resurgence and a focus on science, technology, innovation has got to be the cornerstone of any successful company. it's the cornerstone of job creation, and it's something that we think winning countries an winning companies will do. second is manufacturing, there's a lot written today about manufacturing. what i would say -- i came to work for ge in 1982. for roughly 20 years, if you look at global cost, materials

were inexpensive, and the largest piece in your cost structure tended to be labor. we lived in a deflationary time period. now we live in more of an inflationary time period where the cost of materials are really the largest cost on anybody's income statement. so as a result i think it makes manufacturing, owning your own supply chain, very different today. and that's the way strategically we look at our business. ge has always been good at manufacturing. we have made a very strong focus to control our own supply chain. but we think this is going on around american business at the same time. we've seen good growth in the monthly jobs numbers and manufacturing. go back -- in ge, we have announced or created 11,000 manufacturing jobs since 2009. we've got 16 sites that are

either new or being refurbished. we've got a strong focus on american manufacturing. i thought would just tell a vignette and we have the local guys who will be here this week. we're moving our appliance manufacturing from mexico and china back to funneledmently louisville. when we look at it on a cost basis, our labor is higher, but it's closer than it's been in the past. both materials and distribution are less expensive in the united states than imported. we see the opportunity to bring jobs -- certain jobs, not every job back. we think this will take place in areas like software as well. there's a good case to be made for the competitiveness of american manufacturing verses previous decades. we think some of this will go on in the future. if you go to the next slide, exports are key. if you're in the infrastructure business the way we are, our markets are going to be pre dom

meantly elsewhere. we see the need to really focus on global markets. there's going to be a billion consumers join the middle class in the emerging markets alone. so there is no country that's off limits fundamentally in terms of the opportunities for growth when we look forward into the future. exports are key. we'll make 140 -- this is a ge staple product, 140 heavy-duty gas turbines mainly in greenville, south carolina, thousands of employees there. we have roughly 50% market share globally. less than five will go to the united states. so if we're not selling in every corner of the world, we're going to fall behind. inside ge exports really drive 30,000 jobs. there's a five to six multiplier on every export job. this creates more than 100,000 jobs in the supply chain. you're not just -- if you're going to be an exporter, if

you're going to grow globally, you have to create jobs in other countries, not just the united states. so we're doing that as well. we're building very strong customer relationships. so if you walk through any of our factories in united states, they know the global airlines, the global utilities, the global hospitals who are our customers. so exporting, competing means winning in every corner of the world. you know, it's harder. it's infennelly harder to sell an mr scanner in turkey than it is in chicago. that's the transition american companies have made to be more competitive. i think we can export in line with any other country anywhere in the world. so shift gears. those are three strategies. i think there's two places where every business faces the same challenges when it comes to long-term competitiveness.

one is health care and one is energy. health care, you know, it's extremely for employees and retirees to have great access, high-quality health care at an affordable cost. this is something we all have to work on together. now, our health care costs have come down over the last few years, our cost per employee is lower today than it was in 2008. it's really driven by an employee-directed health care plan and a very focused wellness program. ge has 620 sites in the united states. we treat health care the same way we treat safety, the same way we've treated the vpp program over the last decades. we're extremely focused of 20 parameters of health care inside those sites. that helps how we drive investment decisions and long-term competitiveness.

we manage this very intensely to make sure our employees get great health care at an affordable cost. what you learn is that there's really no such thing as national health care. every city in this country is different. there's 15 cities that matter the most because they're the biggest concentrations of ge employees and retirees. so in 2009, we worked with the local employers in cincinnati because that's where a lot of our employees and retirees live. we work with providers, p andg, kroger's, we worked with big insurance companies to really focus on driving common information, common standards of care and creating 100-plus what's called patient centered medical homes, coordinated care centers. the results are pretty remarkable in terms of er visits, fewer admissions, fewer avoidable conditions. we really think this combination of having a smarter employee

when it comes to health care plus working in consortiums around an individual city with other manufacturers and providers in town, our goal is to keep this growth in line with inflation. so for the past 25 years basically health care costs for companies have grown at two to three times cpi. we think by doing these two things, we can keep the growth of health care costs inside cpi. that's what our goal is. we can't do it as an individual company. this takes a consortium of companies in order to do it. it takes going city by city by city driving best practices, driving information. health care costs -- this helps small businesses and big businesses alike. this is extremely important that the private sector get actively involved in driving and lowering health care costs and improving wellness, quality and access at the same time. similarly in energy, i think

this approach -- and people say it more and more of being all in on energy -- is extremely important for the u.s. today. i think -- when i think about energy, i think about a resource endowment, ie., do you have natural resources at your disposal, and a creative endowment. do you have intellectual capability that can drive energy innovation. i think to a large extent the u.s. has both. we have a resource endowment as measured by a boomer in natural gas with shale gas and other finds the u.s. has an incredible abundance. in corridors we have great wind. if you look at kind of the central corridor to the west, we have probably the best wind to do power generation of anyplace in the world, and we have some of the cleanest coal and access to oil.

so we start as a -- what other countries will look at as a natural resource powerhouse. then you add to that some of the technical innovations around energy efficiencies, some of the innovations around renewables, some of the company and environmentally friendly systems around shale gas, advanced technology in things like nuclear reactors, batteries, gas turbine systems, efficient engines and jet engines and automotive engines, and then the great university and lab skill we've got. we can actually put this together as a country and achieve i think multiple goals over the next decade. i never think that complete energy self sufficiency is necessarily a good thing. you want to be part of a global network. but i think between now and the end of the decade this country can have great control over its

energy, can do it in an environmentally friendly way, can create jobs and competitiveness. the challenges that we have are really twofold. one is we have a very old grid. we've got weak power infrastructure, weak energy infrastructure, and the other one today, believe it or not, on a relative basis, the u.s. market is relatively small. so we have lots of global competition and lots of demand that's outside the united states. but if we can find a way to solve a couple of the core problems, have a more expansive view of energy, i think this is a place where the u.s. over the next decade can really prosper. if we go through so far, technology, manufacturing, exports, those are things that i think are working in the united states. then if you look at affordable health care, access to energy, these are the two pillars of

every productive society when i travel around the world. those are the things that i think so far we need to be working on. next just think about what's our responsibility working with our customers? i think all of us in the business cycle, we have to be focused externally of how to work with cust mers and how to work for suppliers? i'd break it into two groups. with customers in ge capital we've had a big focus on what we call the middle market. the middle market are companies between $10 million and $1 billion in revenue. it turns out this is a huge segment. they actually do identify themselves as middle market customers. there's 200,000 companies, 80% expect to grow. it's a third of the u.s. workers. this is actually a segment in the company that actually fared pretty well during the downturn. what we try to do inside the

company is take down any barriers between ge and this group of companies and what we call access ge. so if you're one of our middle market customers, and let's say you're running a steel plant and you want to learn how to do lien manufacturing, we have found ways both over the internet and in person to allow that customer to access the ge team when it comes to how to do lien manufacturing. if you want to know how to do employee training, we open up the doors to ge to this group of customers to say how do you do training? acquisition integration, same way. financial management, same way. we think tearing down these barriers between our supply chain, our customers and big companies helps the entire enterprise work for effectively. this is one of the things we can do in this target segment which is a real system of growth.

i think one of the things that maybe sometimes we draw an artificial delineation between companies -- big companies and small companies. when the reality really is that the extended enterprise works well together. suppliers, companies and customers. this is another pillar of competitiveness in the things that work. if you go to the next slide -- i think the other aspect, and this tends to be our offers promised in the way big companies work together with other big companies is the role that analytics and the internet is going to play on how assets move. i think if you look at the revolution over the last ten years in social media, the whole aspect of man to machine or machine to machine technology over the coming decade oovps is going to be one of the big trends. we have about 250,000 units in our installed base of jet engines, cass turbines, mr

scanners and we take these through central technology maybe ten tara bites of energy, maybe more, maybe twice that amount. we have the ability now to model usage data realtime with our customers that has the chance to drive significant productivity and performance for our customers, and we're focused on doing that. one point of fuel burn to the global installed base -- the global fleet is worth $5 billion in profitability to the airline industry. one extra mile of velocity for our locomotive customers is billions in profit. if we can get ct scanners and mr scanners never to fail, to have 100% up time, that's probably 25% or 30% more capacity in radiology in every hospital around the country. i think this focus on using technology to drive productivity is really important for customers. so these two things in terms of what works are ways that companies need to focus on their customers, to help their

customers become more productive. we think this, again, is a big pillar of opportunity in terms of what's working in the united states today. if you then shift gears and talk about people, because i think, again human resources are key if we want to drive progress in the future. what i call high skills training, this is one of the first place that is the jobs council looked in terms of ways to drive employment and ways to drive long-term productivity in the country. now, it's a fact that maybe the most straightforward way to create jobs is to fill the jobs that are open today. i think sometimes we want to have grandiose programs and grandiose ideas. there's somewhere between 2 million and 3 million open jobs today t. reason the jobs go unfilled is because people don't have the right skills. if you look at the left-hand

side, this is a program called right skills now. this is the brain child of darlene miller who runs a small business in minnesota. darlene was a members of the jobs council. it's been embraced by nam. this is a focus on advanced manufacturing jobs, using community colleges as ways to get people trained in six weeks, up and going v going, to have great skills, advanced skills. it's got a tremendous small business focus. and there's literally hundreds of different ideas on how to leverage community colleges and ways to drive jobs. i travel the world, spent a lot of time outside the united states. everybody around the world has an employment issue. yet very few people know where the open jobs are and know how to get people trained for those jobs. the left-hand side i think championed by small business, embraced by big companies, focused on community colleges as to a way to get people with the

right skills now employed and in the job area. the right-hand side was the brain child of paul owed linney from intel. the idea is how do you get 10,000 more engineers graduating in this country. we graduate about 135,000 engineers in the united states every year. china and india together graduate a million every year. so we have a large opportunity. and if you look by 2020, what most economists would forecast is there will be a 2 million job deficit, mainly in engineering in the united states. so we've got eight years to get a tremendous increase. the issue is that there's a 75% dropout rate for people who go to study engineering as freshmen. 75% of them don't make it to graduate. that's mainly because other subjects are easier. let's face it. it is hard to graduate with an

engineering degree. so paul's idea is to work with a bunch of universities, big engineering schools, to make them better at what's called retention, having financial rewards for students who study engineering, and to make sure the private sector absorbs internships so that, if you are a senior in high school and you decide to be an engineer, you basically do it with a point of view that you're going to get a summer job ahead of your colleagues who reasonable working quite as hard. so we've doubled, as a company, and we've got 60 other countries -- we typically hire 2500 engineers every summer in internship programs. we're going to basically double that this year, as are many other companies in the united states. so human resources are key. these are just two ideas from a standpoint of what's possible going forward in the future.

now, the reason why people are important and the reason why skills are important is because increasingly we want people to run the show. so in many ge facilities we now have self-directed teams. durham, north carolina, is where we assemble a lot of the jet engines that you probably flew on your last flight or that you'll fly on in your next flight. this site has just under 400 people with one manager. basically the workforce, the work teams decide schedule, put in place metrics, do training, do hiring, and we have well-trained, well educated, team-based, highly productive high quality teams. and so i think it's not the education and the skills development, this is not some kind of theoretical exercise. i think the way companies work

today is that people closest to the action, the people on the floor, are the people who are dictating pace driving schedules and driving quality. and we think this is the way that productive assets work. so think about, again, strategy, innovation, manufacturing exports. two pillars of competitiveness in health care and energy, a focus on customers, making customers more productive, both small and big, a dedication to training, both engineering and advanced manufacturing. putting trained people in teams where they can drive action and base. we think these are the ideas that are working and these are ideas that we can share, and you're going to see these ideas across numbers of successful companies. the last thing i talk about is just the importance of public-private partnerships.

the private sector drives jobs in the united states. that's true and that will always be true. but the government can provide a catalyst, and it can happen in a couple different ways. first states -- i think one of the values in the united states is there's 50 different experiments that happen in 50 different states. governors can be entrepreneurial and governors can help create the right environment. we think that's been very effective. a place where ge is invested in the last couple years, and haley barbour will be here today -- is mississippi. one of the great things that governor barbour did was focus on workforce training, and not just creating a training fund to get people up and going, but also linking companies to universities and colleges in the state of mississippi. as a result we have two high-tech aviation plants going into mississippi. one is already completed and up and operating. the other will be finished this

year. these manufacturing plants will do high-tech materials that will go into jet engines. we've linked up with mississippi state, southern mississippi, some of the big engineering schools in the state. this in the span of let's say five years, point to point, will be roughly a thousand jobs in mississippi. so very effective, entrepreneurial, quick, productive, good jobs created in the state. the right-hand side, the president set forth a goal of doubling exports in five years which we think is achievable. but the trade agencies, the export and trade agencies are extremely important. people like xm are extremely important partners as companies like ge sell around the world. i was just in africa for a week last week. the chinese government is everywhere in africa. and we need to level the playing field in order to allow our companies to compete.

we'll never have the same advantages. we don't need the same advantages, quite honestly. it duds give a sense when people like xm and open pick and other organizations are in, that we're kind of all in as a country oovps, that we're trying to compete and trying to win. i think with just a little bit of support and focus on small businesses and big businesses alike, it goes a long way. so we think both at the state level and at the federal level through agencies like xm, it's extremely important. and both of these create jobs which is what the end result is. that's what creates a win-win. so business and government working together helps create competitiveness. so again, just to recap the ten ideas that we would have, technology, manufacturing, exports, we do business in more than 120 countries. every country thinks about

health care and energy as being two pillars of competitiveness. so those are extremely important. help your customers. make them more productive, train people, educate people and then unleash the power of every brain inside the factories to make people competitive, and embrace the sense that while the private sector creates jobs, the government can create important catalysts and the right environment in which people want to compete and want to create jobs. so the last thing i would just say for the week is competition requires confidence. as a 30-year ge executive, i can tell you that i'm probably more confident today than any other time i can remember in the ability of factories and businesses in this country to be competitive, that there's many good things that are happening in american business today.

i think companies are competitive. they want to win. there's a strong desire to wanting to drive not just competitiveness in their own companies, but more broadly, that in order for us to measure success, we have to win in every corner of the world. 60% of our revenue is outside of the united states. 70% of our backlog is outside the united states. we've got to sell in china. we have to sell in mongolia. we've got to sell in nigeria. we've got to sell in poland, brazil, peru, mexico. we've got to sell everywhere. we've got to be hungry and we've got to be out there every day fighting for our companies. the other thing is in general business works together. there is an extended enterprise, there's a supply chain, a customer chain. there's teamwork inside companies that's very powerful. i think it's this notion of

enterprise and teamwork that are central to american business that i think helps us compete. so that's just the way i want to frame the week. you're going to hear a lot of different discussions on various items throughout this week. we've made a few announcements this morning including the hiring of 5,000 veterans over the next five years, roughly a thousand a year. some investments in our aviation business. ways to take the health care program more extensively. ways to use, idea say things like idea shops for people and towns to be able to access manufacturing and learn from each other and participate to a certain extent in the ge enterprise. so various announcements this week. so, again, we say welcome. we certainly don't know all the answers, but we're ready to learn and ready to help drive improvement. so with that, what i'll do is introduce the next segment. i'm going to be joined on stage here with two of my long-term

colleagues, jim mcnerney, chairman and ceo of boeing, one of the great american companies, the biggest u.s. exporter. someone who is winning around the world. jimmy, come on in. andrew liveris from dow, the company's preeminent specialty materials and specialty chemical company. and the number one guy, david gregory, he wasn't backstage when i came out here. i'm hoping he's here. david gregory, host of "meet the press." good having you. >> good to see you. >> david, aisle turn it over to you. thank you very much, jeff. thank you for having me. a terrific honor to be on this panel. let me jump right into it. we are in washington, some of the government questions, publish-private partnership questions. let me start with the broader economy. we were talking backstage about what you see, what we all see over the next six months in a

political context, but just for americans who are going through such a time of slow growth and high joblessness. jim, why don't i start with you and ask you, what you're seeing out there and how it looks? >> i see a normal recovery except for real estate and construction which is oftentimes two or three points on the unemployment, a point and a half on gdp growth. but i think i see pretty moderately strong global demand with the exception of europe, particularly asia and the middle east. u.s. recovering. so finish where i started. pretty normal recovery except for construction, real estate which for a variety of reasons you understand hasn't bottomed out yet and may not for a while. >> talk about economic growth is a more important indicator than even jobs. we're at 8.3% unemployment. that my experience volatility.

how does it impact or reflect what you're seeing? >> a similar, brighter u.s. now is the time to get us the confidence we all need to keep it goings in the right direction. 8.3, 8%, maybe lower than that. i heard some of what you were saying jeff. it's a jobless recovery in a sense but we have jobs out there. it's the whole skills discussion. brighter u.s., really tough europe. that's what i see. we think europe will be fine at the end of the day. europe has been around a long time. they've got resiliency, if nothing else. this is definitely going to be a testing time for europe. emerging world, the normal issues. but doing well. >> jeff, you've been spending the last several minutes going through the mack co-economic pictures. one of the things we talk a lot about in washington is leadership values and what that does to chill business in