United Technologies Corporation (UTC), the $ 56 billion, US-based aerospace and building technology company that includes Pratt & Whitney and Otis Elevators has been in India since 1898 when the first Otis elevator was installed in the Raj Bhawan in Kolkata. Of the 6,500 people it has in India, 2,000 are engineers accounting for 10% of the engineers in UTC. Last week, UTC established a 150,000 square foot facility in Hyderabad that does cutting edge design work. Dr J Michael McQuade, senior vice president (Science & Technology), United Technologies Corporation spoke to Anup Jayaram on the centre and the way forward for UTC in India.
Q: You recently expanded the Hyderabad facility. What does that entail?
A: The Hyderabad facility is the largest engineering facility that we have. Six years ago, it was just 75 people. Now, it has a little under 500 people and has 150,000 square feet. There is lot of capacity to grow. It moved very rapidly from a contract engineering place to a lead design centre. Much of what they do today is full responsibility for products. It is not a low cost engineering centre. They do design work for our global centres. All this happened quite rapidly over the last 4-5 years.
Q: Did that happen due to the quality of people you have or the lead they took?
A: In fact, both. We have very high quality people. It is not a general research centre. The technical capability of the people there is of the highest level.
If you go to Bangalore, we have 1,200 engineers doing high level of design work for the global aerospace business. It’s a major milestone that they achieved several months ago. Earlier, the products that they designed would go somewhere else before being certified to go into an aeroplane. They would be shipped to our facility in the US for the final quality check and certification. Now it is shipped directly to customers, which is due to the increase in their technical capability. It’s much more of a global design centre for us now.
Q: When did this shift begin to happen?
A: We’ve been here for a long time. The last five years have seen major change. It’s an acknowledgement that global systems and engineering can be applied everywhere. The education system here is turning out people with the capabilities that we want.
Q: What new technologies can we see in the future?
A: We sell lot of components that go into buildings which are intelligent. They become highly interconnected. For example, we provide security systems for buildings. There are video cameras, motion detectors, door sensors. It’s a big business for us. We also have the elevator company. The centre in Hyderabad is looking at how do you build in security systems to schedule the elevators. So, we analyse people flow in buildings. If we see a concentration of people in elevator lobbies, we can send more elevators faster. In the new ways you don’t need to push a button. We do things like, ff you are an employee and we know from your badge where you work. We are looking at technologies which will in general, though not always, will send an elevator that goes to the 11th floor, because we know that is where your office is. Basically, it means the elevator comes by the time you show up.
Q: How does AdvanTEC fit into all this?
A: It is one of the ways we provide semi-custom solutions for buildings. We do all the stuff that goes into buildings. Our primary objective is two things – one is how do we make the building comfortable and efficient; how do we make the building energy efficient. The second of these is one of the biggest drivers of technology investments that we make. Globally, about 30% of the energy is consumed in buildings and 40% of the greenhouse gases emission comes from the power that is used to run buildings and from what happens within buildings.
In India, most of the Advantec users were from the hospitality business. They save significant amount of energy by optimizing their existing systems. The cost saving can go into crores of rupees. The payback period can be from just one year to 2-3 years.
We just announced the acquisition of a company called EcoEnergy, an energy consulting company. EcoEnergy can audit how a building is currently performing, they can recommend solutions for changing the way a building is managed. EcoEnergy has a significant presence in India. It also has major clients in the US also. We’ll sign an agreement with you that we will fund the investment to reduce your energy consumption. Our payback is part of the money we spend. So if we say that you can reduce your buildings energy consumption 20%, we’ll fund the capital, we’ll fund the project and take 10%.
Q: How difficult is it to wire up a building to get that kind of data?
A: That’s what we do for a living. We provide building information management solutions. Most modern buildings have some kind of information. We may be able to retrofit a building and provide returns in a year, but you may not have the money to do that.
Q: What developments do you see over the next two years?
A: On the aerospace side we see significant growth opportunities here. Pratt & Whitney is in the process of a brand new jet engine. It is for a mid-range aircraft. Some of that technology is being developed here in Bangalore, though not on the engine side. We opened a major training facility of Pratt & Whitney for our customers in Hyderabad. The growth of the airline business in big in India, with Asia being the centre of the world for air travel.
On the other side, urbanization continues unabated in India. The country has a role in reducing carbon emissions. We have major factories here, that will evolve over time. Its not about just India for India. We have 6,500 people in India, of which 2,000 of them are engineers. That means 10% of our global engineering workforce is here. Otis has just doubled the capacity of its elevator factory in Bangalore. We have one of our small number of elevator test towers around the world here – 15-20 storey buildings that are just full of elevator shafts.
Q: What’s happening in the buildings space?
A: We have invested very heavily in the science behind how buildings work. We did a multi-year study with Harvard University specifically on how indoor air quality affects people’s productivity. The results are quite dramatic. The performance of the people in knowledge industries can vary 40-60% depending on the indoor air quality. That provides significant conclusions on how you design buildings. You must realise that 90% of your cost is on the people who work in that building. By improving their performance with better air quality is a big thrust area for us.
We are also the biggest provider of transportation solutions for cold chains. That’s a big role for us as the cold chain develops in India. Typically about 40% of the food that is harvested does not make it to consumption. We have more than enough food harvested to feed everyone in the world and yet so much of it is wasted.