BEHIND famous brands such as Otis Elevator and Carrier air conditioning stands United Technologies Corporation (UTC), the world’s leading provider of products and services for the aerospace and commercial building industries.

The conglomerate, based on the US state of Connecticut, develops and manufactures high technology products in realms such as aircraft engines, refrigeration, elevators, fire and security systems.

Shanghai Daily recently sat down with Gaurang Pandya, the newly appointed president of UTC’s climate, controls and security operations in the Asia-Pacific, to talk about the division’s strategies in the region and in China.

Q: UTC is well-known for its ownership of brands related to famous inventors, such as Elisha Otis, who made the world’s first safety elevator in 1853, and Willis Carrier who invented modern air conditioning in 1902. How is your company continuing such a legendary association with technological innovation?

A: We clearly lead the market in aerospace and commercial building segments across the world, and focus on innovation in a big way. All our brands, if you look at their history, have been leaders or innovators of their technology. Besides Otis and Carrier, we have Jeremiah and Charles Chubb, who patented the first electronic lock system in 1818. From there, we continued to innovate on the security side. We have Robert Edwards, who patented the first electronic alarm bell in 1881. We are a company of ideas and we have not stopped innovating and inventing technology through investment in research and development for pretty much two centuries now.

Q: What was the logic behind combining huge businesses like climate, controls and security into one division?

A: That’s an interesting question. For many years, we continued to build the businesses separately. Today, what we are seeing is a revolution of technology taking place — in terms of the Internet of Things, control systems in business, integrated solutions across the board. The way you manage all these high efficiency systems is extremely important. If you do it in isolation, you don’t get the full range of benefits.

By putting them together, we have had some amazing outcomes. For example, with the integration of the chiller plant systems and the control systems on top of the Shanghai International Financial Center — which used to be separate systems — we were able to give customers about a 40 percent energy savings, which can be translated into savings of around US$1.2 million a year in energy costs. Similarly, in iSquare in Hong Kong, we used technology to help operations in the building. When there is a high load of people waiting to take the elevator, for example, the integrated systems will decide how to reduce the waiting time for passengers. The technologies, taken together, give added value to customers.

Q: It sounds like a cross-disciplinary approach. How did you integrate these different things and does it make your job more difficult to manage?

A: They are integrated business units now. If you look at in-country businesses, at the ground level, we have different sales teams. But on top of them, we have teams for key accounts, which focus on delivering integrated products and services. That helps us to bring our technologies together down the line. As we start putting these technologies together, we are able to break barriers of work. Like having a high efficiency chiller. If you don’t control it well, you won’t get the best efficiency from it and thus are wasting some of your money. We build an ecosystem to help our customers achieve maximum efficiency.

Q: High technology usually comes with a high price. How does that affect your competitive position in the Chinese market?

A: That’s a perception. When you look at the lifecycle cost of our systems, the first capital cost is very small given the energy utilization of a product because once we put a chiller in, it lasts 15 to 20 years. Yes, the upfront cost of a system is important, but it is nowhere close to how important the energy cost is to the whole system. Having said that, we know we need to be competitive in emerging markets and we have been doing so. We have leadership positions in many markets across Asia. You can only do that if you are willing and able to compete at all levels, and we are committed to that.

Q: How do you view China’s economic slowdown? Some foreign companies have complained about rising operational costs in China, deeming the country no longer competitive, especially in the manufacturing sector. What’s your view on that?

A: We have been here for many years and we are committed to the long-term growth in China. I think all markets go through some ups and downs. We have seen that in the developed world and in Asia. When you look at the longer-term opportunities of China, there is no question about it, and we invest for that longer term.

China is still one of the fastest growing economies in the world. The services industry is picking up, which contributes about 60 percent to growth.

If you actually look at Shanghai and the eastern region in China, even over the last few years where the market has been a little subdued, we have seen them faring significantly better than the rest of the country.

As for rising costs, I think you hear that primarily from companies that entered China more recently to ride what were then the boom times. However, United Technologies has been here for a long time, and we have been investing every year. We are growing in terms of people and business size across the region. We understand that markets move up and down. It is part of the economic cycle in every country.

Q: So does UTC have any new investment plans?

A: Absolutely. Without question. China continues to be the largest market for us in Asia and one of the biggest markets for us globally. We have made millions of dollars of investment in China for decades. We consider ourselves as much a local company as a global company.

We expect an additional 100 million people to move into urban cities in China within the next five years. By 2025, I believe China is going to have around 221 cities with populations of more than one million people. By comparison, here are only 35 cities in Europe today with that population. China is definitely the place for new investment.

Q: UTC is known for technological innovation, so engineers are a core asset of the company. Are Chinese engineers competitive by global standards?

A: I think so. There is a lot of work done between universities and companies, developing people through the pipeline. Chinese engineers are a valuable part of our research and development here. There is no reason to see a differential. Exposure matters, experience matters. We continue to cross-pollinate between the global world and the developing world. UTC has an extremely strong employee scholarship program. We have invested nearly US$21.3 million in Asia to help our employees get further education. Any employee who has been with us for one year can stand up and say, “I want to do further study, or I want to get my masters degree.” If you want to do it, you can do it. There have been 1,294 degrees earned in the region so far, and nearly 18 percent are in China.

Q: Shanghai is pushing itself hard to be a global center for innovation by 2020. Do you think that presents any opportunities for UTC?

A: Absolutely. We have one of our biggest research and development centers in Shanghai. It is a global center, introducing our next generation technologies to the global market. We have doubled the workforce in this center in the last five years. We will continue to invest and grow from the perspective of technological innovation.

China’s Ministry of Housing and Urban-Rural Development has set a target for 30 percent of new constructions to be certified green by 2020. That gives us a great opportunity because we’ve been founders of green building councils everywhere — in the United States, in China, in India, in Singapore, France, South America and the Middle East. We walk the talk. We’ve led the journey.

Q: Shanghai is also trying to restructure its economy to make it more driven by services. Is that a good thing for UTC as a company that basically belongs in the manufacturing sector?

A: Yes. At the end of the day, it means employment, it means urbanization, it means buildings, it means travel and it means transport. There are opportunities on both the building and aerospace side for us.

(Henry Cooke contributed to this article.)