Fund The Future

Intel Corp. CEO Craig Barrett says U.S. technological leadership is at stake.

In May, Craig R. Barrett will hand over the CEO reins of Intel Corp. to current President and COO Paul S. Otellini and take over the company's chairmanship from Andrew S. Grove. As chairman of the Computer Systems Policy Project (CSPP), a coalition of eight CEOs from leading U.S. information technology companies, and current board member of the Semiconductor Industry Association, he'll also continue to lead industry efforts to educate public policy makers on issues facing the technology industry.

IW:
Now that Congress has passed the 2005 budget bill that cuts the National Science Foundation's (NSF) funding by $105 million, what effect do you think this will have on U.S. business -- particularly in the manufacturing sector -- in the near future and beyond?

Barrett:
We are at a crossroads in this nation. We can continue to lead, or we can fall behind. Unfortunately, these cuts to the NSF budget reflect a larger and potentially devastating trend that will have consequences for U.S. competitiveness: a decline in the government's contribution to basic research, which has fallen 37% as a percentage of GDP over the past 30 years.

Federal investment in basic R&D benefits the entire scientific and engineering communities. NSF is particularly important to training the next generation of scientists and engineers in our top universities. Its budget should be increased by at least 15% in real dollars over the next five years.

IW:
Administration officials contend that they've increased R&D funding, but that it's just going to other worthy programs. How do you respond to that?

Barrett:
Most of the recent increases in research funding have been in the life sciences or applied research programs, not basic research in the physical sciences and engineering. These are worthy causes and they too deserve to be funded, but we need parity for physical science research. The two are interrelated, and letting resources for basic research lapse will only harm medical progress in the long run.

Additionally, there were substantial increases for the NASA budget this year, but most of this money is for facilities support and operations -- not research. The President's vision of a human on Mars cannot be realized without a substantial new and continuing commitment to basic physical sciences research. Yet other than the Department of Energy research budget, where Senator Domenici was largely responsible for pushing through a real above-inflation increase, the dollar investments are just not there.

U.S. technological leadership is at stake. There are troubling trends, such as a decrease in the fraction of patents granted to U.S. citizens and in scientific literature citations to articles written by U.S. scientists. The rest of the world is also increasing the number of Ph.D.s in engineering they are graduating, while our numbers continue to drop.

IW:
I get the sense that many public policy leaders -- and maybe even some business leaders -- are not convinced that Federal funding of R&D has played a big role, historically, in U.S. business success. What role did it play in Intel's success?

Barrett:
The Internet, fiber optics and MRIs are all products of basic research carried out in university or government labs. Intel and the U.S. high-tech industry wouldn't be the world leaders we are today if it weren't for this publicly funded research done over the past four decades. The U.S. semiconductor industry alone -- relying on developments for the integrated circuit -- has created 226,000 jobs and had worldwide sales of $166 billion in 2003.

Intel spent $4 billion of its own money for research and development last year. We will continue to make these investments, as our business depends on them -- but most of that money is for next generation products for which the basic science is in place. We're talking here about the future of American innovation, economic growth and job creation. To make U.S. companies and the workers they employ more competitive, policymakers have to think in terms of investing in the industries of the future, not those of the past.

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