TECH TALK #4 with Peter Weckesser, Chief Digital Officer of Schneider Electric

Use the carrot, not the stick. Carrot is long-term much more attractive than the stick. The largest markets for us are North America, China, and India. We have technologies at our hands that allow us to reduce up to 60% of the consuming.

Thank you, thanks Cilia, thanks for having me.

We are a company with a clear ambition to be the partner for our customers for efficiency and also sustainability. Schneider Electric has chosen a strategy already 10 years ago which is really built on three main pillars: one is electrification, digitization, and also sustainability. Now today it sounds almost obvious that these are three key pillars driving almost any industry. 10 years ago it was probably not that obvious, so the people who decided for that strategy had a tremendous foresight 10 years ago. Now let me maybe dissect that a little bit and go into that. Electrification: everything today becomes electrical. Mobility becomes electrical, buildings become electrical, and we are moving more and more away from fossil energy sources to electricity, and electricity becoming the most important secondary source of energy. Then digitalization: it's become very clear that any industry is on a digital transformation. If you don't transform in a digital way, you will be left behind in any industry. Looking at the business of it, in the end it's businesses who are doing this transformation. Are we focusing at the right things? The answer is clearly yes. So the Green Deal is very important and Europe needs to continue to focus on the Green Deal. The Green Deal really has two dimensions. One side of that Green Deal is the supply side of energy, and this has been very much part of the public debate in the recent years that we need to decarbonize the supply side of energy. What is less in the public debate and deserves a much bigger focus is the demand side of the energy: how can we better manage that demand? And actually today we have technologies at our hands that allow us to reduce up to 60% of the consuming energy.

The key of the success of Schneider is a permanent adaptation to the market requirements. And as you said, we started as a small company in France. Today we are very global, we do business in more than 100 countries, and actually we have also moved to the countries which showed the biggest growth for our business. Today the largest markets for us are North America, China, and India. Europe is by far not the fastest growing geography for us anymore, but we have European roots of course, so we feel that we have a responsibility to also make sure that Europe is not left behind, not left behind in the energy transformation and of course not left behind in the digital transformation. And energy technologies have been defined by the European Commission as one of the critical technologies. What does that mean? It basically means that you are critical for the world economic stability, for the military, for security, for the resilience of the supply chains, for the whole society to function. We know that we are here. It shows that we were leading in energy tech across the board, and you can say you lead part of it. But if we look at wind and solar, China is really moving fast on that and we are falling way behind, and even the European companies have their main markets outside the EU.

Europe certainly needs to have a serious dialogue on what's required really to speed up and create the right investment climate in Europe. Today there are a good number of barriers from many global companies why they should be investing in Europe, and I think one ask to the European Commission is clearly around making sure to focus on the competitiveness of Europe. We have discussed so much energy prices, but if we were really spending the money on optimizing, maybe we don't need to use so much energy, right? You always need to look at both parts of the equation because optimization technologies of course will be available for anybody in the world, right? So all geographies, all countries, all industries have to optimize their energy consumption. But of course the cost of energy is key as well, right? Because that's an input KPI that defines competitiveness. Any industry uses energy, some more some less. But if you want to keep the energy intensive industries also in Europe, and by the way digital is an energy intensive industry, data centers need a lot of energy, and if you want to keep the digital industry in Europe and have it grow, we need to be able to provide attractive energy prices also in Europe.

First is, well, Europe is an attractive market, so let's make sure that we create attractive boundary conditions for global companies and European companies to continue to invest in Europe. Let's not overdo regulation and let's not go into protectionism particularly, but let's make sure that we create a level playing field with an attractive investment climate for Europe.

Yeah, clearly the carrot is long-term much more attractive than the stick.

Thank you very much, Cecilia. Thanks for having me, and looking forward to working together to make Europe more competitive. Thank you so much. Thank you.