Horizon, Host: Ted Simons

February 9, 2011


Host: Ted Simons

Arizona’s Economic Competitiveness


  • Former Intel Executive Craig Barrett talks about what he believes Arizona must do to compete for jobs and grow its economy.
Guests:
  • Craig Barrett
Category: Business/Economy   |   Keywords: economy, jobs,

View Transcript
Ted Simons: Former Intel chairman of the board and CEO Craig Barrett worked in an industry that demands educated talents. One of Barrett’s missions is to help improve that talent pool by encouraging the U.S. to develop top students, scientists, and engineers. To that end, Barrett helped author a report titled "Rising Above the Gathering Storm." Here to talk about his ideas is Craig Barrett. Good to see you again. Thanks for joining us.

Craig Barrett: Nice to be back.

Ted Simons: What did this report set out to do?

Craig Barrett: The report really was driven by the national academy of science engineering institute of medicine, and it really looked at the competitiveness of the United States in the 21st century. How do we compete education wise, research wise, environment wise with other countries. Like the likes of China and India, Europe, Japan. The first report came out in 2005, it was not a flattering report, it basically said we are not stacking up well from a competitive standpoint. We did a follow-up report in 2010, five-your update, and the subtitle of the five-year update was "rising above the storm, approaching a category 5." That gives a hint we said five years after the first report was published, we're in worse shape than when we initially published.

Ted Simons: Why are we in worse shape? What's going on out there?

Craig Barrett: The rest of the world is looking at the 21st century as the century of knowledge and education, of innovation. And the important things there are educating your work force; you know that the quality of life, the standard of living, the average salary you get is going to be dependent on the average education of your work force. We can talk about where the U.S. resides in this area. The generation of new ideas, investment in research and development, that's fallen dramatically as a percentage of our gross domestic product over the last 20 or 30 years. And the environment. The environment is a lot of things. Intellectual property protection, corporate tax rates, the environment to invest in innovation, why would anyone want to come to the United States, or if your in the U.S. invest in the U.S. in a business?

Ted Simons: And the recommendations regarding the report, I want to get to those in a second, but let's stick with education here and what -- we get reports -- we've heard about this for a while, the rest of the world is beating us up down and sideways in a variety of categories. Is anyone even trying to change, or are we all just sitting around throwing ideas against the wall and watching them?

Craig Barrett: It's an interesting problem. The first major report on this topic, "the nation at risk" came out 30 years ago, three decades ago. Basically it said exactly the same thing our report said, "rising above the gathering storm," which was K-12, public K-12 system is broken, people that are coming out of it on average are substandard to the rest of the world, we need to do something dramatic. That was followed up by another report that astronaut John Glenn chaired, "before it's too late," in the 1990s. National governors association have met two or three times, issued reports, "rising above the gathering storm" issued a report. The issue is, you don't need another report. The solutions to education are really pretty simple. Every great performing education system in the world has three characteristics. Great teachers, teaching is a well-respected profession in those countries where education works, it has high expectations, that is, you set your expectation level at the international level, not comparing Arizona to California, or New Mexico, or different school districts in Arizona, you compare Arizona to Singapore, Japan, Finland, Korea, and the last thing you need is a little tension in the system. And tension in the system, you pay for performance, you have feedback loops to help struggling students, struggling teachers, if you go through the U.S. K-12 system on average, you do not have great teachers. There are some great teachers, but on average, if you look at math and science especially, you usually have a problem. You have very low expectations. And we don't pay for performance. When the bush administration put no child left behind, the most mild mannered assessment of students and of teachers, you heard the political outcry, everybody hated it. Everybody in the system hated it because it started to expose the system. So we fail on all three categories to have a great high-performing education system.

Ted Simons: Yet we'll hear from teachers, and I mean like hard-core, in the classroom teachers, they're ground level folks, and they're saying in general they don't feel appreciated. That teaching is not a prized profession. Whether it's pay, whether it's reaction from society, whether it's political attacks, whatever. They don't feel appreciated. Is that a valid concern?

Craig Barrett I think that's an absolutely valid concern. As I said to start, teachers have to be an appreciated profession in the society to make education work. And that's -- you have to attract good people into this system, and let's set the pay issue aside for a moment. A lot of people will go into teaching, it pays OK. It pays around medium level, for -- salaries in the United States. But people are not so worried about I think the pay issue, as the respect. The professionalism associated with that. You refer to teachers as nerds or eggheads or what have you, and you can't do, teach. These are the phrases we use. We have to turn that one around. We have to start attracting the best and brightest kids into teaching.

Ted Simons: Let's get to your recommendations, then, because there's four in the report. The first is to increase the talent pool by increasing science and math in K-12. It includes something like 10,000 teachers for 10 million minds. 10,000 teachers for 10,000,000 minds sounds great. Who pays for them?

Craig Barrett: It's an investment for the future. The plan basically said; let's create scholarships for college students who are proficient in math and science, to go into the teaching profession. Let's pay their scholarship; put them through school, they commit to go teach in the classroom. Science and math are really the Keystones of the 21st century, the knowledge-based industries. If you're not proficient in science math, you're kind of out of it. So we need -- not everybody is a science and math major, but you need a lot of science and math majors, and you need people competent in those subjects. The way to start is to get teachers who are competent.

Ted Simons: OK. How do you get kids who are interested in this world of instant gratification and computer stuff this, and Twitter and Facebook and the whole nine yards, how do you get to kids to be interested in science and math?

Craig Barrett: There are lots of ways. In fact there's an organization that was just created six months ago called change the equation. I happen to be chairman of that. It's a combination of 110 major U.S. corporations who have banded together to say, we're going to try to help the public sector here by promoting math and science as interesting topics, kind of out of the school environment. Think robotics competitions, think science fairs, think of interesting kids and what science and math can do not in the classroom, necessarily, but even out of the classroom. Arizona's good example of this, there's a national science fair called the science talent search that Intel sponsors. It has its -- the 40 finalists are going to Washington, DC next month. There's actually a kid from Chandler. One of the -- Arizona is in the final 40. There's another great science fair which is the international science and engineering fair. Intel sponsors that one. It's going to be here in Arizona three times between 2013 and 2019. This is an international science fair with kids from 55 or 60 different countries. 15 of the hundred of the smartest kids you'll ever find, they don't speak the same language verbally, but they speak the same language scientifically. When they come together there's so much energy in the room, it's astounding. But if you go to a first robotics competition, you can see kids getting into this, getting excited about it. Seeing what they can do with math and science. And competitive environment, or just doing it. That's what these corporations are trying to do. Change the equation is designed to help kids get interested in math and science, see what you can do as a possible profession, and then get involved in school.

Ted Simons: Another recommendation, basic research, enhance that particular commitment, if you will. Talk to us about that.

Craig Barrett: Basic research is a research that goes on in universities. Intel or Microsoft has a huge research budget. Six, $8 billion. The national science foundation, the government entity, supports basic research in our Universities, Arizona state, U of A, NAU. Other universities. We've recommended that the national science foundation be doubled over a period of five years. It's been basically flat in the area of the physical sciences and engineering for decades. So while the rest of the world has been investing, the rest of the world has been growing their universities and there are indeed capability, the United States has been somewhat stagnant in this area. And the recommendation is, we need to compete with the rest of the world. We need to support our Universities.

Ted Simons: How do you tell that to Washington when Washington right now is looking to cut wherever they can because of budget deficits, and economic concerns?

Craig Barrett: I admit it's a difficult message to sell today. But this message started to be delivered 20 or 30 years ago. And we've been consistently delivering it. I don't think the current budget crisis is the major stumbling block. I think rather it's the fact that Washington runs on a two-year cycle. If you invest in basic research, the output comes six, eight, or 10 years later if you fund a bridge, a highway, a building, it's an instantaneous gratification. Politicians are elected on instantaneous gratification. Politicians will support -- look at the stimulus program. Roads, asphalt-ready, shovel-ready. How much discussion was there, let's support basic research for the 21st century. That's the message we've been giving. That's the message rising above the gathering storm gives.

Ted Simons: Another one of your recommendations is to develop and recruit top students and scientists and engineers. How do you find them, how do you keep them?

Craig Barrett: The U.S. Universities are still the best in the world. The Stanford’s, the MiTs, the Michigan’s, Arizona State is rising in capability, U of A. They have the best engineering schools in the world. Historically, foreign students have voted with their feet and come to our universities. The problem now is, if you look at an engineering department at Stanford or MiT, the majority of the kids are not U.S. nationals. They're foreign students, still. So we attract these foreign students, very bright, we give them a great education, and then what do we do? Go home. We're not going to give you a green card. We're not going to give you a Visa. Go home. This is crazy. Taxpayer money helps educate these people. They're the best and brightest in the world. What we ought to do is something that Intel proposed about 15 years ago, is staple a green card to every diploma giving -- in the math, sciences, engineering area, to a foreign national, just if they graduate from a U.S. University, staple a green card and say, we welcome you. There's actually a bill in Congress now which is the staple act which says exactly that. But it's taken us 15 years to get it there.

Ted Simons: Do you -- the U.S. has, over the years, we have such little time, I really wanted to get into this especially -- we hear these stories, we're failing at this, we're behind the scenes on this, and we're trailing in that. And yet when it comes to innovation and creativity, America always prides itself on being the ones that find the bill gate’s and the ones that find the inventors. Are we still that country and are we going to lose a little bit of that if we become test oriented, science oriented? Where does innovation play in all this?

Craig Barrett: It really helps if you want to be innovative, to understand the problems you're trying to solve. And that's where math and science and engineering education becomes so important. You can be a Mark Zuckerberg and drop out of Harvard, or Bill gates and drop out and Microsoft. That's the exception. Most entrepreneurs have a good solid education. And what we want to do is build on what the U.S. has had historically. Great Universities, great Universities do two things. They educate people, send them off in the economy, and spin off ideas. That's the basic research. Bright people, good ideas, that's the foundation of innovation and entrepreneurship. You mix in a little venture capital money, you mix in a societal attitude which is no fear of failure, you go to Silicon valley today and you look at a new business proposal, most of the principles on the business proposal have three failures on their resumes from prior start-ups. In the U.S., there's a gold star by each one of those failures, because it's experience. You know what not to do next time. We're about the only country in the world that still treats failure that way. But other countries are learning. To give you one very simple example, Intel is the biggest high-tech venture capital country in the world. And the -- and invest more money in more high-tech venture start-ups than anybody else in the United States. We used to invest 90% of our money of our effort in the United States. Today it's only about 50% in the U.S. Where is the other 50%? China, India, so when you look at those countries, don't think they are just low labor costs, mass manufacturing. They're filled with entrepreneurs as well, who are well educated.

Ted Simons: We've only got about 30 seconds left. Very quickly, when it comes to Arizona, education, innovation, the future, are you optimistic?

Craig Barrett: There are some positive signs, but if you look at the current metrics, you would be pessimistic. Our K-12 system is way down on the ladder in the U.S. But there's some good things happening there. ASU, U of A are coming up. If I had one message to give your viewing public, it's, during this budget crisis we have, lets not chicken choke our education investment. Take the Universities, set them free, let them charge market competitive tuition, the state can still provide scholarships to poor students. But let’s set them free so that they can grow and be wealth creation centers for the state.

Ted Simons: It’s good to see you again. Thanks for joining us.

Craig Barrett: My pleasure.


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