Is globalization bad? Would you believe it if I told you that 85% of GE’s jet engines and gas turbines have been sold outside the U.S. over the past 15 years?
I understand that in the experience of some American workers, globalization is not exactly a synonym for progress; they can point to jobs lost rather than gained, companies leaving instead of moving in. It’s true that while all the changes and trends that describe the global economy have been a net plus for Americans, the downside can be easily forgotten. And if you’re living it, you can feel forgotten yourself.
Here’s what I know: outsourcing is different from globalization—and it’s yesterday’s game. During the 1980s and ’90s, business looked to emerging markets as a cheap labor source. American jobs transferred to countries that welcomed U.S. companies with open arms. American workers lost in the game of wage arbitrage. But the days of outsourcing are declining. Chasing the lowest labor costs is yesterday’s model; digital and advanced manufacturing technologies make the factories of today more productive.
Now we need to go where the growth is. That is what globalization means today.
Global markets are vibrant, and emerging economies are still growing more than twice as fast as developed countries like the U.S.—and this means there’s more demand. At GE, 70% of our orders are outside the U.S. We’re a $20 billion-a-year exporter, and that has only strengthened our position as one of the biggest employers in the country.
The reality is, this is not easy, and competing for these deals requires flexibility and creativity. Countries are demanding investment in local presence and operations in exchange for market access. These investments in manufacturing and innovation are critical to our ability to win orders. Without them, global competitors would sweep up. U.S. teams would lose too.
At GE Aviation, for example, building an engine-services shop in the United Arab Emirates made us eligible to compete for jet engine and parts orders in that country. Tens of thousands of GE Aviation employees in the U.S. now work to fulfill the orders we’ve won. By building capabilities around the world, we are positioned to deliver for customers, wherever they are—while creating and sustaining jobs at home.
Every now and then I hear politicians make the claim that our government has helped multinationals globalize and that businesses that globalize are somehow “crony capitalists.” This is hogwash. We have a globally uncompetitive tax code. We have very few trade deals. Our regulations have hampered competitiveness, and we are the only country in the world without a functioning export bank. By and large, GE has won globally as a business by its own efforts.
Looking forward, I have a sense of optimism. Every multinational wants to make a positive impact in the world. There is serious talk in Washington of tax reform on a scale not seen in 30 years, and regulatory relief to go with it. This will kick-start U.S. investment in manufacturing and jobs as companies become able to bring back earnings won overseas. Across the private sector, more capital will find more opportunities, speeding up innovations in science, digital technology and other fields. In the end, businesses can help drive American job growth by winning around the world. At GE, we value our global teams, customers and supply-chain partners.
We at GE are providing the goods and services needed to grow economies and improve the lives of people—from reliable, cost-effective power to health care and transportation innovations. We will continue to do this in the U.S. as we do so elsewhere. Global engagement is an economic opportunity for the U.S. and the world.
Our country has strengths to deploy, and there are signs that we are ready to compete. With the right policies, most of the advantages in global competition can belong to the U.S.
Immelt is the chairman and CEO of GE.
This appears in the December 26, 2016 issue of TIME.