Fortune Staff

This year’s Fortune 500 marks the 68th running of the list.

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National Oilwell Varco is a Houston-based provider of equipment to the upstream oil and gas industry.

National Oilwell Varco, Inc. (NOV) Company Profile, News, Rankings | Fortune

legacy

“We can’t be so reliant on just one country no matter who the country is,” the Consumer Technology Association CEO told Fortune. “So there’s an effort towards reshoring and a lot of executives are thinking about that.”

CTA’s Gary Shapiro on what rising tensions between China and U.S. could mean for tech and innovation

Tech

“We can’t be so reliant on just one country no matter who the country is,” the Consumer Technology Association CEO told Fortune.

CTA’s Gary Shapiro on rising tensions between China & U.S

Gary, thanks so much for joining us today. Thank you. It's an honor to be here before such an important group. Um I have a few questions for you, but I want to start pretty broad. Um curious if you can just share uh from your point of view from where you sit. What's the state of the state on the tech industry in the US? We've obviously seen extreme highs, extreme lows. Um Everybody is dealing with the fallout of Silicon Valley Bank at the moment but, but talk to us a little bit about just um what you're seeing from your perspective. Good, bad, ugly. Well, the tech industry had a great run, especially during COVID when everyone had to stay home and use technology just to get basic work done in the white collar world. Um But the way the system works in the United States, the free market system is there's ups and downs the advantage of it down and we're definitely in a little bit of a down now is it's an opportunity for entrepreneurs and innovators to emerge to start new businesses. But between inflation, high interest rates, a little bit of a slowdown and then the Silicon Valley bank uh going under and being bought. Uh you know, there's some concerns at the, at the end of how are we going to finance these things will systems emerge to replace that important bank so we can get the money to start up so they can run their operations. And I think with the continuity that you know, another bank buying them, I think will be ok. And I also think that yes, there are layoffs with a lot of people are hired. I think it's a rejiggering of what kind of skills are needed by people. But with literally tens, if not hundreds of thousands of people that are once working for big tech companies unemployed, that's an opportunity for a lot of innovators and entrepreneurs to emerge. Yeah. And at the same time, obviously a lot of innovation, especially on the generative A I side and, and in other areas. So what do you think we're going to see bubbling up during this current period which is obviously tougher economically on a lot of companies? Well, definitely there are some areas of, of very rapid growth. Uh You mentioned A I, obviously that's the big one. There's all sorts of different ways of approaching business that some people think it's bigger than the internet itself. And it's going to be have a really positive impact in all sorts of areas from health care to uh the way kids learn education, self directing there's so many different things, but like everything in technology, it's a tool. And if you go back to the invention of or the taming of fire to the wheel, to the printing press, to the airplane, to the telecommunications and computers and the internet, they're all tools and they could be used to help mankind or they could be used for less, more nefarious purposes. And that's uh that will be the struggle we'll see in countries around the world as we figure out how to create the lane so that companies can innovate and do great things and solve some of the most fundamental problems in the world. I mean, today, I was on a phone call with people related to the United Nations who were talking about how technology is solving so many of the world's most fundamental problems and helping us achieve the goals that the UN has. And I think that's the positive thing that we're all working towards, which will make a difference. So speaking of the United Nations, um obviously, we've, we've seen ups and downs on the geopolitical side when it comes to tech innovation, collaboration, um partnerships across borders and, and there are rising tensions again, including between the US and China. So what do you, I mean, first of all, give us a little bit of an assessment on that. You talk to a lot of tech CEO S, what are you hearing? What are the primary concerns? And then I'm wondering also how do you see that hindering or helping maybe um some of the acceleration of, of these technologies as the competition heats up. I think there's two categories of people in the United States if you will, that are focused on these issues, one of the politicians in Washington and there's definitely a bipartisan agreement that we have to do something uh given the experience of supply chain issues and, and the different points of view that China and the US have, we have to, we can't be so reliant on just one country no matter who the country is. So there's an effort towards restoring and a lot of executives are thinking about that. I saw a recent survey that 70% of, of affected companies are, are planning on ways to deal with this restoring effort. Um The question is how long it will take, how quickly it can happen? Um And what's the realistic timetable? And I think a realistic timetable is probably more 20 to 30 years in three or four years, which perhaps some policymakers envision the CEO S themselves I think are, are they're more realistic. Um They view the some of the world tensions as things outside their control. I mean, there's a fundamental view a lot of us have that you get through free trade, you get greater understanding and, and sharing, you're less likely to have conflict. Uh That's something which, you know, I hope we balance out a little bit with the, the rush to judgment of, of saying that, you know, it's not, you know, political leaders make decisions and the rest of the country sometimes pay. And I don't think there's any animosity uh towards Chinese as individuals. Uh It's a very productive company country. We rely on it. I think the lesson of COVID, we probably rely too much on it. We saw shortages of products which affected everything from health care to technology companies and things like that. So there's a lot of reality and there's the political world and those are two different and then there's the free marketplace of companies wanting to do business with each other. And I think smart business leaders will figure out how to do that if it has to happen in a third country like Vietnam or, or elsewhere in Asia or even in North America or Europe. I think we'll figure it out. But single source supply has never been a good decision for companies because it gets you maybe a lower price in the short run. But in the long run, it could be deadly to the future of any company. So supply chain issues aside, um China clearly presents and and has for a long time, a very, very large market for American tech companies and and for other tech companies elsewhere. So what are you hearing on, on that front? How are American tech CEO S looking at just the market opportunity? In China, given some of the recent tension. Well, definitely the the global political tensions make it much more difficult in terms of the calculus because that's outside of the control and there's not much you can do about it. So it's almost a digital decision. Do you do it or do you not the economic um things, the manufacturing cost, the supply chain, those are all measurable risks. I mean, some things you don't anticipate. Like I think that the cost and shipping costs between the US and China a couple of years ago was on nobody's radar screen that it would go up so much. And that was a real big factor issues like tariffs, which we've been working to try to get the US to reduce between the US and China. That's become a clearly political issue and it's not likely they will be reduced even though they would help us fight inflation. But definitely the geopolitical issues if there's action against Taiwan and things like that, that's like it's economic nuclear terror as far as probably many, many American companies and politicians are concerned. Ok, back to, to innovation and just the, the rapid pace that we've seen um the the acceleration of, of both innovation and um digital transformation. I know these are all buzzwords but they're real. We're actually seeing this in action. We've seen it in action over the last few years. Do you think that um given the, the, the economic slowdown Now, where do you see things going in terms of that innovation and the adoption of technologies um obviously a slowdown in spend. But do you think that we can use the momentum during COVID to keep that digitization effort up and, and how are companies looking at that? Well, I think there are certain areas which are rapid growth like cyber security. Obviously, that's a global problem that every government has to deal with and faces. Uh Certainly there's the generative A I where we've already seen almost $3 billion invested very quickly. Uh Cloud computing is still very important, very hot efforts to deal with climate technology are very, very significant. Um in many different ways, Digital twins is something and it's an opportunity to, to move product quicker to market by really having artificial intelligence and computers work together and create simulations and figure out what works. And it's just not for products and technologies, it's for health care and drugs in so many areas, even prosthetics, for example, will benefit from a lot of these technologies like 3D printing combined with artificial intelligence. So we're going to solve a lot of individual problems in the world through technology. There's a huge amount of opportunity there. But certainly these, these changes in the economy, the changes in politics, there, there's some storm clouds, we'll just have to, to work through. But in the long run, I think humanity will be better off business opportunities will be created kids will be educated better, we'll live healthier longer lives. And I think this is a worldwide effort to meet some of those very important lofty goals of, of keeping air, clean water, clean, having an environment, making sure people aren't hungry, things like that. And technology is going to solve a lot of these problems. Tell us a little bit about CE S um next year. Is it going to be different? Do you already have a sense of what the big trends are going to be? How early on do you plan it? Well, we plan years ahead of time in terms of reserving all the different major locations in Las Vegas since January. But the CE S 2023 was an exceptional event. Almost 100 and 20,000 people. Uh Well, over 2000 exhibitors and more than one out of three people were from outside the United States to global event. And there was a lot of focus on artificial intelligence. The the automobile mobility market is huge. Uh Obviously so many other areas are hot, robotics, food. And we we'll have some big announcements and some big names and some big things because people still one thing we learned in COVID, people want to get together and innovate occurs much more easily when people are face to face with that five cent environment. So you could create the relationships and the magic occurs of different industries getting together and stimulating each other. And that's why events like CS and, and frankly, the Fortune conferences are so important. Thank you so much, Gary. I appreciate you taking your time and talking to us, sharing your views with us. Thank you and, and great luck with the conference. Thank you.

Fortune's list of America's Most Innovative Companies features organizations across a wide range of industries. Companies were evaluated based on product innovation, process innovation, and innovation culture.

Introducing America's Most Innovative Companies List 2023

Features

Companies were evaluated based on product innovation, process innovation, and innovation culture.

Avantor’s goal is to create innovative products that help solve sciences most complex challenges.

Avantor CEO: "The mission of Avantor is clear and that is to set science in motion to create a better world”

Leadership

Avantor's mission to set science in motion

CEO Michael Stubblefield on Avantor's mission to set science in motion

A mentor is a leading global provider of mission critical products and services for the life sciences and advanced technologies industries. Uh We became a public company in 2019 and today listed on the new york stock exchange are more than 14,000 associates serve 225,000 customer locations around the world in more than 180 countries. The mission is clear and that is to set science in motion to create a better world. And this can be reflected in the work that we do to advance life critical therapies. And you see it in things like M. RNA vaccines for covid 19 prevention or in personalized medicines for challenging diseases. And we try to embed sustainability in all that we do. We think that that enables us to touch and change more lives for the better and to further advance our mission of setting science in motion to create a better world leading with purpose is important and it's a critical way to connect your associates to your mission uh and to inspire them to bring their very best selves to what they do uh every day when I think about the products and the services that we produce that haven't or we can help all of our associates in a very tangible way, understand why the work that they do really matters because these products are found and uh you know, treatments and therapies uh that we all have friends and families and patients that we know that are counting on us to deliver through the work that we do um and thereby giving the work that we do, an even higher meaning, there's a lot of different ways to measure success. We have the contour business system that we leverage to measure the key, you know, metrics around our our business and other, you know, key priorities. We have, you know, goals and metrics for our sustainability strategy and the four pillars of our science for for goodness platform. But I think that the ultimate measure of success and impact of our organization is, you know, being able to look through to the to the cup that we serve and the patients that are counting on us to deliver high purity products that are, that are innovative and it solves in the sciences most complex challenges, you know, to give them a better chance that it gets reflected in the work that we do through our community engagement pillar in the communities that we serve, uh and, you know, bringing education and other opportunities to these communities to help lift them up and to be part of, you know, the society. And then, lastly, uh you know, creating an environment for associates where they can be the very best selves that they can contribute and thrive and grow and develop in a very equitable and inclusive matter. I think these are the kind of the important outputs of the culture of your come and ultimately dictate, you know, whether you're successful or not, uh and, you know, needing strong engagement across all of these, um, you know, important stakeholders, your customers, the communities that support you and give you the license to run in their communities, uh, and then, ultimately, the associates that make it all happen.

Mark Costa sees other CEOs “very serious about climate change” and taking “aggressive actions to reduce their carbon footprint.”

Eastman CEO says sustainability is a “huge innovation opportunity”

Eastman CEO: sustainability is “huge innovation opportunity”

mark. It's great to see you two talk about Eastman company and all the things that's doing with climate change issues. It's interesting that the Eastman story goes back more than 100 years. You are actually part of Kodak. Tell us about the company's business back then and what it's doing now. Well, Eastman does have a really long history over 100 years and we're incredibly proud of it. We started making polymer for films and processing chemicals and over time dramatically diversified a wide range of products off of these core technology platforms where we're world leaders today, we make a variety of sustainable materials that touch everyday life, whether it's in appliances or electronics or cars or homes or additives and coatings or personal care. We're a very diverse company, but all centered on sustainability as our core. Well, you are a big believer in solving the plastic waste crisis and you're using what's called molecular recycling technology and I'm not sure I have this alright. But basically you're taking waste plastics, you're recycling them and you're turning them into a form of new plastics that can be reused. Tell us a little bit more how that works. We're really excited about our technology, which complements what happens today, which is mechanical recycling, where they just take clean bottles, wash them, chop them up and melt them, but they have limitations, you know, our quality on degradation. So we step in with our technology where we can use chemistry to unzip polymer back to building blocks purified and make the virgin polymer all over again. We can do it at a lower carbon footprint. So we're improving the climate and improving plastic waste and susie. It's really important when you think about this because a lot of people say just banned plastic sounds good. But the challenges plastics incredibly energy efficient. So if you want to switch to glass, that's four times the energy than a plastic bottle or two times for aluminum. So what we're doing is essential to really build a future for climate and plastic waste. And it's not just plastic bottles that you're doing. I understand it's all kinds of things, carpeting, building materials, shrink wrap, your recycling all that hard to recycle stuff. Right. Exactly. So mechanical recycling can only really use very clean feedstock because they're just washing it. When we unzip it, we can use all of what you said, the textiles carpet, fiber, you know, all kinds of packaging that's dirty. Uh and and give that all an infinite life. And what's important is what we do is like aluminum recycling. It's infinite. We can do it forever, even improving the quality, mechanical recycling that degrades over time. So, it's a perfect partnership that we try and create with them. So how would you describe the progress and contributions that Eastman has made so far? I'm incredibly proud of our team. How we've dealt with chaos that we're all going through from pandemics supply chain crisis and really developing our sustainable platforms or circular platform in particular. We now have three projects that we're developing. We have one that we completing in King's sport, one that we announced early this year with President Macron, that will be the largest billion dollar investment in France. Now a third one base loaded by France by Pepsi, that will be building somewhere here in the U. S. And when you put that together, it's $2 billion investment, $450 million of it. But it's a significant event that's change that will change the company and really prove to the world Circular economy recycling is scalable and can solve these problems. Probably you've been collaborating with the United Nations climate group was called Cop 27, it held summit recently. Is it making meaningful progress? I think it is. I think what was encouraging about the last meeting, even though there's been some criticism of it is I think they started to have some practical conversation, you know, the challenges of this are huge around climate that involves countries companies, consumers. But it also got a wake up call with the Ukraine war and the crisis they're now facing the energy to say this is a little more complicated making the transition and things like natural gas need to be part of that transition for a long period of time. But it's a complicated conversation that requires, you know, really understand the tradeoffs and the time it's going to take. How would you rate what Ceo and businesses are doing when it comes to climate action? I think we see great alignment with the brands that we work with, the peers in our industry, where everyone is very serious about climate and taking aggressive actions to improve their carbon footprint. I also think the circular economy and what we're doing there is a great example of collaboration. The brands are essential that uh and it really helps them not just get waste out of the environment, but dramatically lower their carbon footprint. So you see people like Pepsi Base holding our third plant, Procter and Gamble LVMH Loreal, Black and Decker, a wide range of customers that are signing up committing to these very aggressive sustainability goals. So we see great engagement and I think that's what's going to take to build this future. It's interesting that the former Ceo of Unilever recently told fortune that climate is no longer a peripheral issue, it's the absolute core of sharp business strategy. How do you respond to that? And how do you think most businesses feel about it? Do they agree or not just yet? I think most businesses agree. I know we do right at the center of our history is being innovation driven, but now it has this extreme, extreme sort of sustainability lens put on everything we do. You know, my team, I told them when I became Ceo innovate or die, um that's how you survive in this industry and now it's even more existential than that. I think those who center on sustainable materials and sustainable practices are going to exist and grow and thrive in the future. And frankly those who don't won't be around anymore. So I think we view it as core our moral purpose in our center of how we think about growth and success and value creation. Well, Mark you have and advocating a strategy of sustainable innovation over the past nine years, pretty much since you became Ceo and you said it's more than a business purpose. It's a moral purpose. Tell us what you mean by that, What is your thinking? I think that at the core of any successful company, you have to have a moral compass that engages and excites everyone every day for why they show up. They don't show up because shareholder value of the stock price is exciting, they show up because they want to make sure they're making an impact on the world. And I think where we're at and how we focused on really driving on the sustainability trends, especially in today's world, allows everyone to feel highly engaged. Now, enhancing the quality of life and material way is our mantra. It's our moral purpose. But underneath of that is improving the quality of products, improving our impact on the environment. And I'll tell you it's it's a great way to attract talent, get them excited and retain them. What motivated you to take Eastman in this direction? Well, for me, I saw the world evolving very quickly in the last decade, especially the last four years around how we impact the environment and still need to really improve the quality for many people around the world and how to do that is a huge opportunity. Most people in our industry think of it as a threat to their business, we viewed it as a huge innovation opportunity, you know, our industry frankly hasn't had that much innovation in the last couple of decades and this creates an entirely new innovation curve where we can come up with sustained material sustainable additives and make a huge impact on the world. Well, I understand that your leadership on this is also rubbing off on that your two sons are now considering to having careers that have to do with climate change. So how do you feel about that? I feel great. I mean I've always been an adventure sport addict and my kids have followed too, so we do a lot of mountain biking skiing, a lot of different water sports and they love that, but in that environment, whether you're in the mountains or the oceans, you can see the impact we're having on the environment and they certainly like to point it out and say, dad, you run a materials company, what are you doing to make the world a better place? And they've got very excited about. I can't tell you how many projects I've done with them, uh an entrepreneur classes and economics classes about products that they want to launch that will be more sustainable. So it's become a family business at this stage. Well, that's fantastic. Well, your leadership has been transformative and in fact, Eastman ranks unfortunate change the world list. These are companies that are making meaningful changes for the world. So when the day comes that you leave Eastman, what do you want people to describe as your leadership? I think right now we're at an incredible time in our industry, a time of challenge to innovate and solve huge environmental challenges and still improve everyone's quality of life. And I think the leadership I've been able to provide to build a company centered on that, to be innovation driven to focus on sustainable materials and really solve these challenges. It's a huge legacy and a game changing event for our industry and in the Foundation, I hope I've built a company, an employee base that is engaged, excited, diverse and inclusive, that's really able around the world to implement this strategy and really differentiate us from many in our industry.

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