[LINK] Intel’s R&D budget bigger than Australia’s

[Bernard Robertson-Dunn]

Intel’s R&D budget bigger than Australia’s
By James Riley, iTnews
Monday, 02 September 2002
http://www.itnews.com.au/story.cfm?ID=10686

Australia's ability to compete in the global services economy is at risk
because of the nation's relatively low investment in research and
development, according to Intel chief executive Craig Barrett.

Although comparing well against other developed nations in indicators such
as PC penetration and Internet connections, Barrett said the most
"striking" statistic about Australia was its tiny R&D budget.

Australia spends less than one percent of its gross domestic product (GDP)
on R&D, compared to close to 5 percent in the US, and four percent in the
UK.

Based on a rough a rough annual GDP figure for Australia of US$350 billion,
Barrett said the combined total of all public and private sector R&D
spending locally was "somewhere less than US$3.5 billion" on research and
development.

"Intel by itself spends about $4 billion a year on R&D," Barrett said. "So
my company out spends your country. (And) my revenue base is not nearly as
high as your GDP base," he said.

Barrett said the low level of R&D investment should be focus of "a national
debate for the citizens of Australia". He said Australia was well
positioned to take advantage of opportunities to export broadband services
to Asia, but warned those opportunities could be lost without greater R&D
and broadband infrastructure investment.

Despite the worst recession the IT industry has endured in 30 years,
Barrett said the internet had largely delivered on its early promise,
particularly in business to business electronic commerce.

Intel, he said, was looking to save about US$1 billion annually through its
Internet-based sales and procurement programs. The company sold more than
US$25 billion worth of goods and services via Internet-based systems, and
bought more than $10 billion worth of goods and services through Internet
procurement systems.

Broadband would be the next frontier of Internet services, and Australia
was well placed as a regional centre for the development of broadband
services and business models.

Barrett said estimates in the US suggested that broadband services could
add as much as five percent - or US$500 billion - to that nation's GDP
annually, suggesting percentage increase may be similar in Australia.

Meanwhile, Barrett said Intel would continue to make venture capital
investments in Australia and the region through its Intel development fund.

Intel has so far invested in eight Australian companies and about 120
throughout the region, most made during the height of the Internet boom.

Barrett said Intel's investments had slowed in the past 18 months, largely
because its more traditional venture capital investment partners had become
more cautious in the wake of the dotcom bubble's burst.

Although Intel's investment rates were down to about one-third of levels
two years ago, Barrett said the company had no plan to reduce the amount of
funds already earmarked for its ongoing strategic investment plans.

-- 
Now who is responsible for this work of development on which so much
depends? To whom must the praise be given? To the boys in the back rooms.
They do not sit in the limelight. But they are the men who do the work.
-- Lord Beaverbrook, March 1941

Regards
brd

Bernard Robertson-Dunn
Canberra Australia
brd@austarmetro.com.au
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