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As CEO of Intel, Paul Otellini knows a lot about the value of investments. And these days he’s worried that the United States, after a decade of neglecting support for education, research, and digital infrastructure, is falling behind much of the world in its ability to compete economically and technologically.

Last year, during some of the grimmest days of the recession, Otellini announced that Intel would spend $7 billion to build fabrication plants in Oregon, New Mexico, and Arizona. While the move was meant to create manufacturing capacity for its new 32-nanometer chips, the timing, which came as Congress debated President Obama’s stimulus bill, was also meant to signal its willingness to invest in the United States. This February, Otellini announced that Intel and a group of venture capital firms would supply $3.5 billion to U.S.-based technology startups over the next 18 to 24 months; a related initiative committed Intel and other high-tech companies to doubling their hiring of U.S. college graduates in 2010.

Fretting over U.S. competitiveness is nothing new: such concerns seem to make headlines every few years, peaking during poor economic times. So Technology Review editor David Rotman asked the Intel CEO why he is worried now.

TR: Why does it matter where innovation comes from? After all, about 75 percent of your revenues are from outside the U.S.

Paul Otellini: [To us] as a global company, it probably doesn’t matter. And as a multinational corporation, we have the ability to hire people from anywhere on earth. But there are still some fundamental concerns. I think that America is the best place in the world for innovation when it is done right. Historically, the infrastructure, capital markets, acceptance of failure, and the willingness to try again are uniquely American.

TR: What’s at stake for the U.S.?

PO: As a country the issue is: are we going to be prepared for the industries of the 21st century, which are fundamentally knowledge-based industries? The alternative is to go back to 19th-century industries and get back to [manufacturing] steel and those kinds of things, but then you have to do it at costs that are comparable with the lowest costs in the world. That would require a reset of the standard of living, and most Americans are not willing to do that. If you want to maintain our standard of living, you need to adapt the workforce for the jobs of the future.

TR: Do you see signs of this loss of competitiveness already?

PO: You can measure the gradual erosion with something as straightforward as how our kids are doing in math and science. It’s clear the best of the best coming out of our schools are world class. It is the average that I’m concerned about.

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Credit: Gabriela Hasbun

Tagged: Computing, Business, Intel

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