Shazam! Innovation vanished!

The U.S. is throwing its future down the drain. That was one of the startling statements from Craig Barrett, Intel chairman, in an interview with Business Week magazine.

During this week’s interview, Barrett vented his anger and frustration over Washington’s inability to solve America’s long-term problems, and was notably concerned that the government had failed to pass a bill that would offer its corporations and academic institutions $1.2 billion for R&D projects.
He complained about the administration’s continuing focus on short-termism, noting the “focus is on today’s problems and forget about tomorrow’s problems. You can’t save your way out of a recession. Expect to see continued research and development investment streams. If you stop the investment streams you are cutting your throat.”

Barrett suggested the government is “effectively thumbing their nose at out expert opinion” when it comes to how the U.S high tech sector should remain competitive.

“When you look at the agricultural subsidies and the bailouts and the earmarks it is hard to believe the government can’t come up with $1 billion to fund innovation. We as a country have chosen not to compete.”

He added one of the positives of this slowdown is that Intel has become much more geographically diversified than in the past. “Between 75 to 80 percent our business comes from outside the U.S. We are a bit more shielded. A big part of the world is still investing in infrastructure, China, Russia and India. Those regions are seeing good growth rates.”

Barrett also took a swipe at what he said was the U.S “abdicating our leadership in finance and accounting to the Europeans. We are not competing on K-12 education. We are not competing on basic research. We have no immigration policy. High corporate tax rates dictate a lower rate of investment.”

He noted that nearly two-thirds of graduate students in engineering are from overseas. “We pay for their education but then we send them home. There, they either compete with us or take a job away. We have killed investment banking, and now we are killing engineering.”