General Electric, the nation’s largest industrial company, makes products like jet engines, locomotives and gas turbines. Its corporate reputation is tied to producing big, heavy equipment — atoms by the ton, not the ephemeral bits of software.  Yet Jeffrey R. Immelt, the chief executive, predicted last September that G.E. would be a “top 10 software company” by 2020. In recent years, the company has steadily built up its software business, and its industrial products are increasingly loaded with digital sensors, all part of an effort to be a leader in the “industrial Internet.”  Now, in its latest step to remake itself — and its public image — as an industrial company for the digital era, G.E. said it was moving its headquarters from its longtime sprawling suburban home in Fairfield, Conn., to the high-tech environs of Boston.  The relocation by G.E., long a bellwether of the American economy, illustrates how much old-line companies in nearly every industry have been forced to rethink their businesses for a digital age. It is an opportunity, but also a threat. So Walmart is investing heavily in online commerce to meet the challenge from Amazon, and Ford and General Motors are retooling to keep up with innovators like Tesla and Google.  Massachusetts Gov. Charlie Baker discussed on CNBC the benefits to the city, and to General Electric, of the company's decision to move its headquarters to Boston.  The Boston region, Mr. Immelt said, is “an ecosystem that shares our aspirations.”  The area is crowded with 55 colleges and universities, including research centers like the Massachusetts Institute of Technology, Harvard and Northeastern University. G.E. said it was also attracted by the area’s thriving venture capital and start-up community, and pro-business state and local government.  In Fairfield, G.E. has about 800 employees, a tiny percentage of its 360,000 employees worldwide. In Boston, G.E. will also have 800 people, but it will have a different kind of headquarters setting, the company said.  Only about 200 will be corporate staff, G.E. said, while the remaining 600 will be mainly “digital industrial product managers, designers and developers” in a variety of disciplines including data analysis, life sciences and robotics.  The new headquarters will be leaner, faster and more open with a constant flow of industry partners, customers and innovators, G.E. executives say. The intent, they say, is that it will be more like walking into a start-up in an urban setting than the remote suburban headquarters of the past.  The move fits the recent pattern at G.E., analysts say. “It affirms G.E.’s digital technology orientation and that strategic commitment for decades ahead,” said Steven Winoker, an analyst at Bernstein Research.  For years already, G.E. has been at the forefront of industrial companies seeking to use sensor data and clever software to make its machines smarter, using less fuel and predicting when they need maintenance before breakdowns occur. Executives routinely call it “an industrial digital business.”  G.E.’s digital push is part of the company’s evolution, as it has focused its investment on the industrial side of its business while sharply cutting its once-huge finance arm in the wake of the financial crisis. In 2011, G.E. opened a separate software unit in San Ramon, Calif., which employs 2,000.  The company moved to Fairfield in 1974, when many major companies were leaving New York City for suburbia with its lower taxes and living costs, and good public schools. G.E. first said it was weighing moving its headquarters last June, after Connecticut proposed raising taxes on businesses to close the state budget gap.  That prompted G.E. to address the issue with urgency but, in its statement on Wednesday, G.E. said its senior management had been considering the appropriate role and location of its headquarters for more than three years.  G.E. has not identified the address of its new headquarters, but the company said it would be in the Seaport District in South Boston, which is becoming a hub for investment by technology, biomedical and pharmaceutical companies.  Massachusetts and Boston are offering an ample package of incentives. In news releases welcoming G.E., Gov. Charlie Baker and Mayor Martin J. Walsh said the state offered incentives of as much as $120 million through grants and other programs, and the city offered as much as $25 million in property tax relief.  The city and state also agreed to make transportation improvements in the Seaport District and to build an innovation center where G.E. and university researchers can collaborate.  Employees will move to a temporary location in Boston starting this summer, G.E. said, with the permanent move completed by 2018.  G.E. said that the financial incentives from state and city governments vying for its headquarters were competitive. In the financial negotiations, G.E. wanted incentives and grants to make the move itself essentially cost-free for the company, said a person involved in the talks who was not authorized to speak publicly. But G.E. did not seek tax deals that would continue year after year, he said.  In its statement, G.E. said it began its search with an initial list of 40 locations. San Francisco was ruled out partly because of its high living costs, and the longer time difference — by three hours, compared with the East Coast — in communicating with G.E.’s units in Europe, where the company has a sizable business. Other cities, including New York, made strong bids, but in the end it was Boston, the person involved in the talks said. G.E. did not estimate the extent of the job losses in Connecticut as a result of the move. The company employs 5,000 people in the state, including the 800 at its headquarters.  A version of this article appears in print on January 14, 2016, on page B1 of the New York edition with the headline: G.E. Is Moving Headquarters to Boston and Into the Digital Era. Order Reprints| Today's Paper|Subscribe
The move from Connecticut is an effort to tap the high-tech environs, with its cluster of research universities, for knowledge and recruiting.