Sunday 22 July 2018

Ireland could do better: Former Intel head Barrett

On a recent visit to Ireland, the tech titan Craig Barrett told Roisin Burke that we really need to up our game when it comes to supporting research and innovation

Illustration by Jon Berkeley
Illustration by Jon Berkeley

Roisin Burke

THE former head of one of the world's biggest companies, a global game changer and influencer, is sampling a packet of Tayto Cheese and Onion flavour. "They're not bad," he concedes politely.

A crisp is dwarfed in the big, rancher hand of Craig Barrett, ex-Intel boss and current part-time cowboy and fulltime education and innovation evangelist.

It has to be the most statesmanlike, dignified consumption of a packet of Tayto ever.

When he lived in Finland (from where he commuted to Silicon Valley at one point) he visited a crisp-making factory to see how potatoes were converted into flavoured snacks. It says much about him – wanting to find out what's inside everything and how it works.

He looks tired. He's a linchpin participant in the two-day Silicon Valley Global Technology Forum organised by ITLG, a group of influential Irish and Irish American global tech leaders that Barrett chairs.

It's been a long day, I suggest. "Days are meant to be long," he responds sternly.

His passion is education and what he sees as its critical role in economic competitiveness. He is solicitous and slightly shy, very tall and rangy, and it's easy to picture him in a Stetson on horseback riding across the plains at one of his Montana ranches. He grew up in San Francisco but lives in Arizona from where, for most of 30 years, he commuted to Silicon Valley. He's wearing a smart corporate blazer, a shirt and tie, but he sounds like John Wayne.

His Triple Creek Ranch business card gives his occupation as "cowboy and fisherman". Barrett's grandmother hailed from Co Tyrone and he has an interest in Ireland's development. He was chief executive of Intel, the world's biggest silicon chip maker, when the decision was made to locate a plant in Ireland in 1989. At one point, half of the world's Intel pentium processors – the nerve centre part of computers – were produced in Leixlip.

Barrett is as busy as ever, having stepped down as chairman of Intel in 2009.

Along with former Fianna Fail TD Conor Lenihan, he is involved in a massively ambitious and sometimes controversial project to build a Russian Silicon Valley.

At home in the US, Barrett pioneers a programme of nonprofit, high-achieving schools. You can bet there's not much slacking off smoking behind the bike sheds or cogging your homework at the 11th hour on his watch.

Last week at the Limerick event where we met, he made powerful pronouncements on education and its place in Ireland's future competitiveness. (You can watch his speech exclusively online at independent.ie from tomorrow).

"I think Ireland's making progress," he says. But Barrett does not do congratulatory backslapping. Our report card would say 'could do better'.

"It was interesting to go to the event [the ITLG Young Innovators event at Shannon airport where 600 children got to hang out with mentors from Disney, Google, Dell, Intel and more and explore entrepreneurship], and we all kind of said the same thing to them, you know: 'Technology's the future, it's moving faster than ever before, you kids have to be able to accommodate and assimilate this and to work in this environment and to take advantage of this opportunity.

"The thing I find kind of interesting is, we're telling the kids that this is their future. But are we as adults, doing everything possible that we could do to allow these kids to be successful?"

The answer, you can tell, is: not so much. "We've talked a lot about Irish education and its attempts to improve its primary and secondary and university system.

"Now the question is: is Ireland doing enough, fast enough and setting the benchmark that 'hey my kids have to be as smart as the kids in Shanghai, or Seoul, or someplace like that. And I think the answer is that you could be doing more." And investing more.

"There's a general correlation between the economies that invest a percentage of their GDP back into R&D tending to do better in technology."

Countries like Israel and Finland put more than five per cent of their GDP into R&D. "Now that's a combination of private and public sector so it's not all public money, but the point is the economy has to invest that amount."

Nowhere near that now at 1.17 per cent, Ireland aims to spend 2.5 per cent of GDP on R&D by 2020, less than the European three per cent target, and to add further business expenditure on research incentives.

"It's incumbent on us to say, okay, money where our mouth is, I'll invest to be consistent with where you, the next generation needs to be. The US kind of dabbles around two or three per cent. If it were really serious they'd be investing more."

Barrett wears a vivid blue tie with an R pattern on it. It's the 'Romney Victory' tie, given to supporters of the allegedly magical underwear-wearing US presidential race candidate, businessman and Harvard grad Mitt Romney.

"I wear it daily to remind me of what the United States did, what might have been," he says.

"It's kind of back to your earlier questions about Ireland and what's important and what the future is. I've been a critic or interested in US competitiveness, the US education system, investment in research and what the US needs to do to be competitive in the 21st century and I just don't see that understanding in government."

Romney would have been different, Barrett feels, because unlike Barack Obama he has run businesses.

"Our president effectively has never had a job, until he became president. He hasn't been a businessman, an entrepreneur, made a payroll – hasn't done any of those things I think are necessary to achieve an understanding of how the economy works.

"I'm not a particular fan of the president. Nor am I a particular fan of Republican politicians, but that's besides.

"The world's changing, you've got three billion new capitalists in India and China, technology's going a gazillion miles an hour – is the economy doing everything it needs to accommodate that? It's very easy for the established economies – Europe, US, Japanese, to get complacent. You're in a strong position but as a point of fact your position is eroding on a daily basis."

Five years on Barrett, like many of the world's computers, is still 'Intel inside' and closely follows the company and the whole tech sphere.

Looking at the massive disconnect in some cases between value and revenue at some superstar tech companies, does he think there could there be another bubble inflating towards a pop?

"The real valuation issue if a dotcom bust comes along is what is Facebook or Twitter or LinkedIn worth? What's the next social media thing worth? Is Facebook really worth as much as IBM? That valuation probably is a little bit skewed to the aggressive side.

"What I'd call mature accepted companies: the Intels, the IBMs, the Ciscos and so forth – those guys are probably pretty fairly valued at this time."

What about Stripe, founded by Limerick's Collison brothers? Why is it suddenly worth nearly $2bn following a recent funding?

"Well, probably a lot of people have asked the same question – why? All those guys are in the same category. Snapchat worth $3bn!

"I don't think the whole market's skewed, but you could probably make an argument that people being enamoured with the new latest social media type thing, that valuation gets skewed. Can that get corrected?

"Sure, that can get corrected. But it probably won't bring down the whole market down as it did before."

Despite plummeting computer sales and an admission by Intel's current leader that the company was too "insular" about the smartphone and tablet revolution, Barrett thinks it is in pretty good shape.

He references Intel's visionary co-founder Andy Grove's motto – 'Only the paranoid survive'. "Intel is paranoid enough that it's moving into tablets, smartphones and other aspects of computer technology, automobiles and things of that sort."

Barrett is co-chairman of Skolkovo, Russia's incredibly ambitious $1.5bn Silicon Valley rival technology business hub, headed by a Russian oligarch and a pet project of Russian prime minister Dimitry Medvedev, where Microsoft and Intel are among the partners and Conor Lenihan is a vice president.

Last year, Skolkovo hit the headlines over suggestions of financial irregularities involving key members of staff. Is Barrett perturbed by the accusations of money not going where it should?

"I think the great bulk of the resources are going where they're intended to go, to support entrepreneurs, create a university, support entrepreneurs to convince multinationals to come in, I think that's happened," he says.

Web Summit founder Paddy Cosgrave recently challenged Google to hire "even one" high level R&D engineer in Dublin.

Could Ireland attract the really valuable Google and Twitter type R&D and innovation function here as well as supplying hewers of wood and drawers of water?

"No," Barrett says succinctly. "I think to a degree it's a matter of numbers. You can have an Intel invested here as a creator of jobs but it's primarily a manufacturing investment.

"Those are good paying jobs and I think the Irish are very happy to have them and Intel is happy to be here. Intel also has engineering applications here with 300 employed in Shannon.

"But that's small compared to the engineering base it has in Santa Clara or Portland or Arizona, for example, and that's just a matter of numbers.

"The multinationals are going to go where the resources are. And the bulk of resources are not in Ireland because it's a small country of four or five million people.

"Look at it on the positive side, at least they're putting their HQs here."

Quoting an adage from a Chinese fortune cookie, he adds: "One of my favourite fortunes is 'You can't win unless you choose to compete.' Unless the United States decides to compete, it will continue to lose economic prominence and economic power and world influence. There's no other answer."

Irish Independent

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