A realistic message

6 Mar 2012

Craig Barrett, ITLG chairman and former Intel CEO

ITLG chairman and former Intel CEO Craig Barrett says the 21st century is going to be more competitive than the previous century, with every country battling for jobs, education and lifestyle. It’s going to be tough, he tells John Kennedy.

Two years ago in Dublin’s Mansion House, former Intel CEO Craig Barrett told Ireland’s academic and political elite a few necessary truths. He said Ireland will need to move beyond an average education system, average investment in R&D, poor support for entrepreneurs and below average broadband infrastructure if it is to thrive in the post-recession world economic order.

Over a phone line I ask him does he think we’ve heeded his advice. “There’s always more to be done. But I’ve been encouraged by how much of its budget the Irish government is putting into R&D and the universities’ attitudes towards commercialization, interfacing with industry and teaching and promoting entrepreneurship to their students is all very positive.

“I think the country as a whole recognizes that the economy was built on a combination of foreign direct investment (FDI) and some entrepreneurship. Going forward, FDI is going to be much more difficult to get and entrepreneurship will be the more available option.

“I would be very encouraged by what Ireland is doing. It is pragmatic and it is taking a matter-of-fact approach unlike some other European countries which are kicking and screaming. The Irish are very pragmatic and are moving ahead. So I’m encouraged.

“In fact, speaking as an American citizen, I wish that our government was a little more proactive about what’s necessary to succeed in the 21st century. We still seem to be living in the past in the US and not recognizing the importance of education, research, innovation and entrepreneurship. Sometimes I’m a little bit envious that the hard times that have made the Irish government and the Irish people recognize what is important to secure the future; the US as a whole seems to be living in the past,” Barrett laments.

Barrett has always taken a keen interest in Ireland’s development and was CEO of Intel when the decision was made to locate a plant in Ireland in 1989. In the spring of 1993, Intel produced its first Irish microprocessor – a Pentium – and the Irish fabs went on to supply half the world’s supply of Pentiums when the PC revolution was raging.

He warns that ensuring the right supply of skilled workers is a challenge that faces not only countries like the US and Ireland but all developed countries.

“There’s been this tendency away from what I would call the heart subjects of maths, science, engineering and technology. I’m glad to see that there’s a lot of debate in Ireland about school exams and rearranging your points system from points that were granted regardless of subject matter. This dialogue is important as is the focus on elevating the importance of maths and science subjects.

“Every developed country is facing the same problem – the skill sets for the middle class with good incomes is going to be much more aligned with technical subject matter like maths and science than it was in the past.

“The key is getting the right message through to the 14 and 15-year-olds. We have the same challenge in the US.”

What may be most important in a classroom

Intel has always been a proponent of computers in education but Barrett is adamant that it’s no good just throwing technology at education, the answer is more fundamental.

“There’s no question that technology can make education more interesting, more exciting and get kids enthused about it.

“But I have always contended that if you had your choice of just one piece of technology to put in the classroom – just one – it’s a pretty simple choice and the answer is a good teacher.

“A good teacher is much more important than technology in the classroom and if you look around the world at the really high-performing education systems, whether they are in Finland, Korea or some of the big cities in China, they are not technology heavy, they are good-teacher heavy, high-expectation heavy and it is really the quality of the teacher which is the most important technology in the classroom.

“In the US, we found that out because we throw more technology at kids than just about any other country and our education doesn’t improve because of it. Where education is good it is good because you have high quality teachers and high expectations – that is the critical aspect.”

While tax incentives were an obvious factor what ultimately swung Intel to decide to invest in Ireland was its education system, Barrett says.

“You were educating great technologists and engineers at the time and you were exporting them all over the world – there were no jobs in Ireland at the time so there was a ready availability of good talent. The IDA was a class role model of government interface in attracting investment into Ireland. Singapore and Ireland were two countries that stood out in everybody’s mind at that time in terms of their development authorities and you spoke a language that was remarkably similar to one we speak in the US – not identical, but similar.

“And so it was a combination of three things. Proximity to the EU, the tax and the quality of the workforce. The IDA was just a joy to work with and they made life very simple.”

Barrett looks back fondly on that period when Intel drove the PC revolution with its Pentium processors and the role Ireland played.

“It was certainly an exciting time if you look at the advent of the PC in that time period, the early development of the internet and all the other things that came along with it. For those periods that the world changes you have to be a part of catalyzing that change and Ireland played a big role in that, Intel played a big role in that, so it was exciting to be part of one of those game-changing events. The computer revolution and internet revolution was a high point in that, a very exciting time.”

Craig Barrett and the Irish Technology Leadership Group

I ask Barrett how he got involved with the Irish Technology Leadership Group.

“From my standpoint, it’s a combination of the Intel experience in Ireland which was extremely positive, the fact that my grandmother came from Ireland didn’t hurt in having an association with the country, and frankly, to see the enthusiasm of individuals focusing on what is necessary in the 21st century to succeed. The ITLG is all about that. That’s what the 21st century is all about: education, smart ideas, etc.

“This is what the developed countries have going for them and they either capitalize on that or they end up like Greece. So you’ve got a pretty stark choice in front of you and it was a pleasure to see some of the Irish ex-pats get really enthused about rallying the Irish wherever they might be in the world and focusing on what they could do for their home country.

“In a sense it’s not all a philanthropic effort, it’s a classic case of doing good by doing good. You find good ideas and make them successful, you invest in them, you get other people to invest in them and everybody is successful with the outcome.

“I really applaud John Hartnett in what he’s done in organizing this and the energy he puts behind it, whether it’s the venture capital, the trips back and forth, the awards for entrepreneurs. This is the sort of catalytic energy you need to move forward and I think John has done a super job rallying people at both sides of the ocean.”

The most competitive century yet

This catalytic effect, Barrett warns, is vital, because the 21st century is going to be the most competitive era humanity has ever known.

He offers a realistic message. I would characterize it a little bit like what has driven the IT industry over the last 20 or 30 years – Moore’s Law. It’s what you have in front of you – this doubling every 18 months; which means if you ever slow down you fall behind.

“And so Ireland has a challenge, it’s not just to recognize that education is important and an innovative environment and entrepreneurship is important, but it is to continue to recognize that the Chinese are doing this, the Indians are doing this, the Malaysians and Singaporeans are doing this.

“There is unfortunately no opportunity to relax and slow down in the 21st century, it is going to be the most competitive time we’ve ever faced. This means unlike the latter half of the 20th century, which was good to Western Europe, the US and Japan, in terms of very gentlemanly controlled competition; all we had to do was compete with each other, we had the same wage rates, the same populations, market size, very gentlemanly.

“The 21st century forgot all that – boy it is going to be hard work every day to stay afloat. You see that in the corporate sector, you see what happens to classic icons of technology like Kodak, Motorola, and more recently, companies like Nokia, who are struggling – no position is secure, no position is safe, there is someone coming after you every minute and that’s what governments have to realize, what companies have to realize and what populations have to realize.

“Five years ago, Nokia was in an unassailable position with 40pc of the mobile phone market. It ignored the arrival of the iPhone from Apple and all of a sudden its world was turned upside down. That’s what the 21st century is going to be like.

“The noise you’re hearing from your southern neighbors in Europe right now, about how ‘it’s too difficult, you can’t force austerity on us, we’ve given too much already, we deserve better’: unfortunately, nobody deserves anything, you have to earn everything in the 21st century and that’s the most important thing for governments to realize, and what populations need to realize. It’s going to be very tough.

“And going back to my own country, that’s what the debate in the US has been – golly, we’ve always been No. 1, we deserve to be No. 1.  When the going gets tough we’ll be No. 1 but they’re forgetting that to be No. 1 you have to compete, you have to choose to compete and then you have to do what’s necessary to compete,” he says.

“It’s going to be exciting.”

Silicon Republic has joined forces with the Irish Technology Leadership Group to bring you The Silicon Valley 50 most influential Irish-American people in the tech world ahead of the ITLG Innovation Summit in California on 12-13 March.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years