Offering a dismal collection of perceptions regarding the U.S. economy and the Obama administration Monday evening, Intel Chief Executive Officer Paul Otellini bundled his comments with a bleak outlook on the future of the U.S. tech industry if things continue unchanged.
Mentioned in the course of dinner at the Technology Policy Institute’s Aspen Forum, Otellini’s statements added up to a warning to government officials and various Washington aides in the audience: unless government policies are modified, he forecasted, “the next big thing will not be invented here. Jobs will not be created here.”
Otellini explained that the U.S. legal environment has grown to be so inhospitable to business, that there is apt to be “an inevitable erosion and shift of wealth, much like we’re seeing today in Europe-this is the bitter truth.”
Only recently, Otellini declared, “our research centers were without peer. No country was more attractive for start-up capital… We seemed a generation ahead of the rest of the world in information technology. That simply is no longer the case.”
Of course the occurrence of technology execs spouting discouraging forecasts and providing sharp critiques of Washington politicking is nothing new.
Just like in 2005, half way through the Bush presidency, Microsoft’s Bill Gates explained to a Washington audience that barriers on immigration and guest workers here would almost certainly supply a lift to research institutions in India and China.
Politicians did not follow Gates’ suggestions to alter laws which lead to foreign engineers getting kicked out of the country once they finish their degrees. And today, six years after, with no substantial reforms, it may come as no surprise that the forecasts have turned grimmer.
Otellini also claimed, “every business in America has a list of more variables than I’ve ever seen in my career.” If variables like capital gains taxes and the R&D tax credits are solved effectively, work opportunities will remain right here, however in the event that people in politics make decisions “the wrong way, people will not invest in the United States. They’ll invest elsewhere.”
Consider factories. “I can tell you definitively that it costs $1 billion more per factory for me to build, equip, and operate a semiconductor manufacturing facility in the United States,”
The bottom line is that ninety percent of the additional cost of a $4 billion factory is not labor but the cost to comply with taxes and regulations that other countries do not impose. “If our tax rate approached that of the rest of the world, corporations would have an incentive to invest here,” Otellini said. But in fact, it’s the second highest in the industrialized world, making the United States a less attractive place to invest–and create jobs–than places in Europe and Asia that are “clamoring” for Intel’s business.
