Ignoring R&D would be ‘a big stupid mistake’ Pistorio Pasquale, founding CEO of STMicroelectronics, told the Malta Business Weekly this week.
“The future of any enterprise can only come from research and innovation,” said Pistotrio, “the future world will reward those companies who have made great strides in this direction. Never, in fact, has innovation been more important.”
However, Pistorio sees an increased emphasis on the bottom line:
“After the crisis, companies are now finding financial institutions that are much more wary of lending and providing finance. Much more importance is being given to EBITDA figures as these are reputed to give a clear and exact picture of a company’s real state. Increasingly, the task of a manager has become one to watch over the bottom line and to have a robust cash management.”
Pistorio blamed the credit crunch on “the deregulation process that led to the sub-prime crisis which led to the derivatives crisis which led to the banking crisis. Banks found themselves lending where there was no collateral or pretty little of it.”
The result is, said Pistorio, that: “Governments are back in business: the deregulation trend was taking away most power from governments but the crisis has now made the governments take over the running of the world once again into their hands.”
Although he sees risks in the Greek and Irish economies, Pistorio does not think they will default and he thinks the euro is safe.
Always a staunch environmentalist, Pistorio said that the urgency of developing renewables can judged by the fact that, in Asia, 600,000 people die every year because of the pollution caused by the use of fossil fuels. He delivered a tour d’horizon of the sustainable energy situation:
“Wind renewable energy is now mature. It could soon be as cheap as fossil fuels. In most coastal areas, wind energy could be as low as €0.05 per kw/hour. This is even cheaper than fossil fuels. 20% of the energy needs in Denmark come from wind energy, 10% in Spain, 8% in Germany and from 3-6% in the EU as a whole.
In 2009, wind energy produced some 158GWatts in the whole world, which works out at something like 55 power stations compared to the 375 nuclear power stations. But wind stations are increasing by 25% a year. By 2025, energy from wind will overtake energy from nuclear.
Solar energy produced only some 25GWatts last year, equivalent to four power stations. But it has a 50% growth rate and the costs are falling. Last year in the US solar energy went below the $1 per Watt mark.
Thermo dynamics create energy through using huge mirrors. Covering just two per cent of the world’s deserts by such mirrors would solve all the energy needs of the entire world. The cost is still high but is falling.”
Pistorio, a native of Sicily, added: “A Sicilian saying says that the sun that hits one square metre of Sicilian land is the equivalent of one barrel of oil.