Despite Economic Slump, Intel Takes A Leap
It is American business, and not the government, that needs to invest in technologies to support innovation and growth, Intel CEO Paul Otellini said Tuesday before the Economic Club of Washington, D.C. "This year, we are going to see an unprecedented level of public investment in schools, bridges, roads, and healthcare. It is important.... But let me be very clear. All that investment is not sufficient. While it may help lift us out of our current crisis, it will not secure our future. By itself, it won't help stimulate the next generation of ideas," Otellini said.
"A secure future requires investment in areas that will give rise to new ideas and new industries. We can't look to government to do this. In fact, creating the future is an area where American business and entrepreneurialism has a stellar track record, one that I believe we can continue," he said. "What I am asking is that other companies join us. Companies that are willing to step up now and place investments to lay the groundwork for our future. In fact, creating the future is an area where American business and entrepreneurialism has a stellar track record, one that I believe we can continue."
Otellini backed his call up with the announcement that his company will be spending $7 billion over the next two years to build advanced manufacturing facilities in the U.S. that will produce the most advanced computing technology in the world. The initiative will represent Intel's largest-ever investment for a new manufacturing process and will support about 7,000 high-skilled jobs. Otellini said the company generates more than 75 percent of its sales overseas but carries out roughly 75 percent of its semiconductor manufacturing domestically and about 75 percent of the company's R&D spending and capital investments are made in the United States.
Intel is partnering with the Aspen Institute on a year-long initiative to bring the best minds together to lead a discussion on how technology investment can help grow the economy and create jobs. The company plans to start running this advertisement tomorrow. Part of the initiative will include a large conference held in Washington in October to bring together experts from business, government, academia and the media to discuss the importance of investing in technology to get the economy growing again.
Otellini said President Barack Obama called him Monday night at the Hay-Adams hotel to congratulate him on the announcement. Otellini said he told Obama that he supported many elements of the economic stimulus package, including funding for the National Science Foundation and parts that would support broadband and health information technology. "I think the debate in Washington has been a very healthy one. But at the same time, I worry that we might see what some call an -- unintended consequence," he said.
Intel and other technology companies have been impacted by the economic slump and have seen their revenues drop, Otellini said. He also noted the unpredictability of the country's future economic well-being but said that times of crisis also represent opportunities and that U.S. creativity is strong. He emphasized that at the essence of the economic problem is "confidence." He said it is important that the U.S. continue to pursue the challenges that arise with new technologies.
Otellini said the biggest competitors for Intel are Samsung, based in South Korea, and TSMC in Taiwan and said more consolidation in the semiconductor space can be expected. He warned that though the most talented workers might be educated in the United States, keeping highly skilled workers in the country remains a problem and the students of physical sciences in China are getting better every year. -- Winter Casey
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