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Ireland needs to up its game on innovation, warns ex-Intel boss


Craig Barrett

Craig Barrett

Craig Barrett

IRELAND needs to at least treble its investment in research and development to compete in the world technology market war, former Intel chief executive Craig Barrett has warned.

"It needs to be at least 5 per cent of GDP in Ireland, or around €10bn," said Barrett, who led the world's biggest silicon chip maker through the dotcom bust and the recession that followed.

At the moment, Ireland assigns just 1.17 per cent of its GDP to research and innovation, according to the Central Statistics Office.

Countries should spend at least 4 or 5 per cent on R&D, said Barrett. He pointed to the example of Israel, which has excelled in technology and which spends a higher proportion of its GDP on R&D.

Barrett was in Ireland to attend a gathering of Irish and Irish-American Silicon Valley leaders in Limerick.

The event was organised with ITLG (Irish Technology Leadership Group) by former Palm executive and tech investor John Hartnett.

Barrett said that countries, like tech companies, needed to invest in innovation.

He continued: "Anyone remember Motorola? Twenty-five years ago, they missed the boat. Nokia missed the digital evolution to smartphone and Apple came along. And after Apple, Samsung.

"Will we say, 'anyone remember Apple?' in years to come? This shows how rapidly market share can transition and change.

"Ireland's been making some progress but my message is you've a long way to go. You've got to make substantial progress equal to or above what you're doing today.'"

As chief executive of Intel when the dotcom collapse happened in 2001, Barrett saw Intel lose more market cap overnight than the GDP of Ireland, he recalled.

"So what did we do after being devastated by the bubble burst? Much to the dismay of financial commentators and the press, we at Intel said, 'this is an opportunity'.

"We increased R&D and capital investment. We believed the future was insatiable demand for technology. People said we were nuts."


Intel has had its travails in keeping up with the move away from personal computers to devices like tablets, but revenue has more than doubled since the tech market collapse over a decade ago, although the share price has remained low.

"The moral of the story is: recognising what the future holds and putting your money behind your belief," said Barrett. "What Ireland and the US have to do is pull the three levers of education, investment and environment. Competing is not saying, 'I'm going to be a bit better than this,' it's about being the best."

There is room for significant improvement in education he said. Ireland should be looking at OECD research on education levels in schools. "They now have a school assessment where you pick your secondary schools and can see your rank compared to schools in, say, Shanghai. Everyone should be looking at this and asking whether they're up or down and what they're going to do about it."

This, along with environment for entrepreneurs, tax rates and social attitudes to success and failure, are what's important he said.

Barrett added: "The environment in terms of tax rate is great here and is the reason multinationals set up here – but is Ireland really set up to reward innovation? I think Ireland's made some progress but my message is this: you've got to make substantial progress equal to or above what you're doing today."

Irish Independent