Intel chief emphasises the importance of education

29 November 2009  By Dick O’Brien

The European head of Intel has warned that the government must continue investing in education in order for Ireland to remain a competitive location for multinational investment.

Christian Morales, general manager of Intel’s operations in Europe, Middle East and Africa, said the company would continue to invest in Ireland as long as it could find staff with the right engineering qualifications.

Intel has about 4,000 staff in Ireland and is marking the 20th anniversary of its massive chip manufacturing plant in Leixlip, Co Kildare.

‘‘The fundamentals are still here in terms of the strength of this economy, but it is not enough to be competitive today. You need to ensure you are competitive tomorrow," said Morales.

He said the company, which recently laid off about 300 staff at Leixlip in the first compulsory redundancies since the plant opened in 1989, did not have the luxury of supporting uncompetitive facilities. Earlier this year, Intel also restructured its Asian assembly plants as it reacted to the global economic downturn.

‘‘It is like a rugby game. You could be the best in the world, but if you go into a match with 10 per cent less concentration, you will lose," said Morales. A member of the original taskforce that selected Leixlip as its European manufacturing centre, he said the reason Ireland won out over nine other countries was its talent pool, positive climate for inward investment and strong education system, all of which are still in place today.

Morales welcomed the government’s recent announcement that it would invest €150 million in a schools IT initiative that will see every classroom in the country receive a laptop, digital projector and educational software. Intel believes its chairman Craig Barrett can take some credit for that move, and for a government decision to reverse planned education cutbacks in the renegotiated Programme for Government.

At the Global Irish Economic Forum at Farmleigh last September, Barrett castigated the government for its failure to prioritise education and research. The comments by Barrett, who is a former chief executive of Intel, were widely reported in Ireland and abroad.

Morales said Intel had invested about $7 billion in Ireland, and had expanded its facilities steadily over the past 20 years.

‘‘We never expected it to be that big in Ireland, but then the markets began to grow exponentially," he said. While the Irish economy is still struggling, Morales said the picture for the broader European economy was brighter.

He noted that several countries - such as Germany, France and a few Nordic states - only had six to nine months of economic crisis, which he attributed to the resilience of the European social democratic system.

While Intel has pruned its day-to-day costs in the downturn, it has continued to invest in strategic areas, according to Morales.

‘‘That means research and development and investments in new facilities, because you always come out of a recession faster with new products and technologies, rather than trying to be reactive," he said.

Despite the recession, internet traffic has continued to grow, and Intel wants to grab a slice of that market. Morales said there was still potential for exponential growth from the chip manufacturer, citing an array of new devices that feature the company’s technology.

There are more than one billion devices connected to the internet, but Intel believes that number will rise to 15 billion by 2015.With so many devices likely to be connected to the web, Morales predicted that the number of data centres required could grow by multiples of up to 100 over the next ten years.

‘‘Regardless of whether you participate or not, you will need more broadband. I can’t see any country that will not need to multiply the capacity of broadband today by five to ten times in the next ten years," he said. Intel recently teamed up with Motorola and Irish telecoms firm Imagine to launch a $100 million high-speed broadband network using Wimax technology.

However, Morales warned that Ireland was still trailing in the wake of some of its European neighbours.

‘‘A couple of weeks ago, Finland declared by law that every citizen must have access to 1Mb broadband by the middle of next year and 100Mb broadband by 2015," he said.