Horizon, Host: Ted Simons

November 16, 2009


Host: Ted Simons

Craig Barrett


  • Former Intel CEO and Chairman Craig Barrett will be honored with a 2009 Governor’s Celebration of Innovation Award. It’s Arizona’s highest honor for technology innovation. Barrett will talk about his award and technological innovation.
Guests:
  • Craig Barrett - Former Intel CEO and Chairman
Category: Business/Economy

View Transcript
Ted Simons: Dr. Craig Barrett joined Intel in 1974, and went on to serve as CEO, president and chairman of the board for the chip-making giant. Thursday Barrett will receive Arizona's highest honor for technology innovation, the 2009 Governor's Celebration of Innovation Award. He's being honored on educating others on the value of technology and raising social and economic standards. Here now to talk about the award and technology innovation in general is Dr. Craig Barrett. Thanks for joining us.

Dr. Barrett: My pleasure.

Ted Simons: Talk to us about receiving this award and what it means to you.

Dr. Barrett: It's great to be recognized by your peers for doing something you're really passionate about. I've been promoting the use of technology as an economic driver and as a solution for economic growth problems and other problems for years. It's nice to see my peers in Arizona recognizing that.

Ted Simons: How are we doing in Arizona, though, in terms of technology and innovation technology? 10

Dr. Barrett: I think it's a mixed bag. From an education standpoint, you've got probably the best high school in the country, the Basis High School, charter school here. ASU, the honors college there, the engineering college is up and coming, doing well. You've got Thunderbird, well recognized international business school. But there are pockets of brilliance surrounded probably by mediocrity for the most part.

Ted Simons: How do we at least limit the mediocrity?

Dr. Barrett: You basically have to get the community and the legislature and the governor committed that our future is not going to be construction, it's not going to be asphalt. Our future in the 21st Century is going to be knowledge, expertise, innovation. We have to have the state really serious about supporting education all the way from K-12 on up to the university level.

Ted Simons: I’m guessing from that response I’m guessing you don't think the state is serious enough about education?

Dr. Barrett: No, I don't, from what I've seen around the rest of the world. While I was with Intel I traveled to about 30 countries a year. I know what the Chinese and the Indians are doing, the Eastern Europeans, what they are doing in Latin America. Arizona is really not serious about competing at this point in time.

Ted Simons: Why do you think that is?

Dr. Barrett: I just don't think the state leaders recognize the competition that they have. I'll give you a simple example. I'm on the board of Science 11 Foundation Arizona. An organization committed basically to invest in Arizona's future from a technology-engineering standpoint, education standpoint. You know what happened to the funding for it in the last budget cycle, cut to zero. Here's an organization looking forward to the 21st Century. Here's a legislature looking back at the 20th Century.

Ted Simons: How do you convince the legislature to look forward to where we are now? We’ve had lawmakers on the air just say it's not the best place for that money to be spent. How do you convince them?

Dr. Barrett: You have to start from the basics. There are only three levers that a community can pull to be successful in the 21st Century. You need a good education system, you need investment in research and development, and the right environment to promote investment in innovation. Let’s quickly look. In K-12 we rank in the bottom 10% of the United States, and the United States ranks in the bottom 20% of the world, not a good measure. Let's look at funding and R&D. It's a great message to the rest of the world, we're not serious about investing in R&D. What I'd love to have us start building on our points of excellence, instead of just cutting the funding to them. We've got great stuff going on in biotech, bioengineering, the engineering school at ASU is great, Thunderbird's great. We've got some really key educational capabilities here. Let's build on them. But you can't do that if the State is not willing to invest for the future.

Ted Simons: And yet, it's a young state. I've talked to people about this before. It's a young state and we don't have the historic nature of universities and small towns and small colleges and these sorts of things. People come out here and they are ambitious and looking to make more than a couple of bucks and they think they’ve got a better way to do it. Or they are retiring and they are still kind of set back where they came from, as opposed to here. How does Arizona become that forward-thinking place, as opposed to it's a beautiful day, let's go play golf?

Dr. Barret: I never hear that argument about the ASU football team. We're never willing to accept mediocrity on the football field because we're a young state with a young university. I don't know why we accept mediocrity with the educational system if we expect to compete with the rest of the world. We're not competing against California or New Mexico or Nevada. We're competing with the rest of the world. Our kids should be educated at the internationally competitive level. They are not. We need to recognize that, we need to do something about it. That endless discussion in this state about the AIMS test. This test measures the capability of kids when they graduate from high school. We feel really good that our kids can take an eighth grade test and pass it and graduate from high school. That's not acceptable for entering the competitive world.

Ted Simons: There's so much I want to talk to you about that, but let's talk about the impact of technology, creativity, innovation, on a community, both immediately and down the road.

Dr. Barrett: Well, you can look at communities around the U.S. that have been involved in this. They are usually communities around great universities, Silicon Valley, around Stanford and U.C. Berkeley. Go to Cambridge, Massachusetts, and they are around Harvard. Great universities are really the food for innovation. They provide the ideas, they provide the personnel, they provide the students. You combine that with a good venture capital community and you get pockets of innovation and great economic growth. That's exactly what Phoenix needs to do.

Dr. Barrett : You were an instructor at a great university before you even went to Intel. You were at Stanford then you went on to Intel and Santa Clara -- that relationship then, and what you see in Chandler and Valley-wide, as far as Intel and other opportunities, is there a comparison? How do you see that?

Dr. Barrett : There's a bit of a comparison. We have over 10,000 great employees in the Chandler area, best in the world, state-of-the-art. But we don't do a lot of engineering here. We have been growing that capability over the years, but it's mostly a manufacturing facility at this point in time. If you go to Silicon Valley, that was innovation in terms of new product creation, innovation, excitement about new industries. You can look at the new industries that have grown up there, not just Intel, but Cisco, Yahoo!, Google. These are the ideas that come out of one or two smart university students, get in to the marketplace and grow to be tremendously profitable worldwide companies. That's what we need to do here.

Ted Simons: Critics will say you're talking about students, organizations, start-ups, that are 10, 15, 20 years past. How are we ever going to catch up to that?

Dr. Barrett: The technology field moves so rapidly, you know Moore's law, you double every 18 months or so in capability. That gives you the opportunity every 18 months to jump into the new thing with new capability, new products, new services new excitement. You know how Google was created. There are two graduate students out of Stanford. Yahoo, two graduate students out of Stanford. Bright ideas out of the University they can trump the bigger research budget of the most successful company around. Who has challenged Microsoft over the years? Google, Yahoo!. Microsoft spends six or eight billion a year on research. Here come two graduate students, not even finishing their PhDs, challenging the biggest software company in the world.

Ted Simons: Did they get a different kind of education than we see here in Arizona? Are these, again, just families that have historically emphasized education more than families in Arizona do?

Dr. Barrett: If you look at most of the founders of those companies, either Asian heritage or Eastern European heritage, education is considered to be an absolute must, a absolute necessity. I’m sure there was more parental influence on these kids – higher standards. I mean, you look at the charter schools that I mentioned here. Started basically by Michael and Olga Block, Olga comes from the Czech Republic. Comes to the U.S., has kids, wants to put them in schools, and she decides there's no school here good enough for my kids, I'm going start one of my own. Now you've got some of the best couple of high schools here in the U.S., and that ethic, that impetus to up the level of standards of educating our kids is an absolute necessity here.

Ted Simons: It's a necessity the way you see it. But how do you get that lawmaker other there, that legislator to see the same thing when they have all sorts of folks coming at them and saying, don't cut my funding, don't cut my money, we can't afford it.

Dr. Barrett: You have to make the very pragmatic argument that we're in the 21st Century. And you have two choices. You can look through the windshield at it or look through the rearview mirror at the 20th Century. When you talk about asphalt-ready, when you talk about low-paying manufacturing jobs, that's Arizona's future, then that's looking backwards. You need to look at the 21st Century. Knowledge-based, tech-based, science and research-based, adding value to what you do. That's how you have a good-paying job. That's what Arizona should be thinking about. We just need to continue that dialogue with legislators.

Ted Simons: What you say takes work. You can't just sit around and wait for it to happen. You've got to make it happen. Is that mindset in Arizona right now? I mean, just the base will to get this done?

Dr. Barrett: You know, thinking about this award I get at the Governor's innovation meeting in a couple of days, I think that award is not so much for Craig Barrett. That award is for what my peers are thinking about what is important, and what I've been saying, which is just what we're saying in this discussion. What's important for Arizona's future? I think they are voting saying, hey, what's important for Arizona's future is a good education system, investment in research development, focusing on what's going to make Arizona successful in the 21st Century. I think that dialogue is here. We just haven't articulated it enough. You know Michael Crow has been saying this at ASU. A bunch of from the private sector have been saying this. We just need more momentum.

Ted Simons: On a personal note, Intel, all those years, corporate management and just overseeing this chip-making giant: Lessons learned there that you're trying to impart on folks now.

Dr. Barrett: Let me give you one of the biggest lessons, our company is in relentless pursuit of Moore's law. Each year we have a 90% turnover in our revenue. It comes from products that were not there in January. You either have new products on a continuing basis or you're dead. You can't save your way out of a recession. You can only invest your way out of a recession. Lesson one, during a recession don't slow down on your investment in the future. You have to keep making that investment if you want to be successful, or you fall behind. Lesson two, you have to have the best and smartest people working for you. You have to have the best education background for those people. If you don't have smart people, you can't be successful. And what I'm basically saying, education system is critically important, investment and research and development is critically important. Without those two things you can't be successful.

Ted Simons: Dr. Barrett, great stuff. Thank you so much for joining us, we appreciate it.

Dr. Barrett: My pleasure.

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