Intel’s president and chief executive officer is back in Washington this week for a meeting of the Technology CEO Council, the information technology industry’s public policy advocacy organization, with top White House and congressional officials.
Sitting down with POLITICO to discuss changes in the economy and his industry over the past eight months, Otellini said the bold investment turned out to be “absolutely” the right decision.
“Those factories are now in production — two of them are and the other two are coming on line — and the technology is stunning,” he said.
Otellini said that despite discouraging jobs numbers, he believes the economy is now on a steady path to recovery. “We don’t see a double dip,” he said. “There’s no sign of that. Think about why technology’s done well this year. It’s not done well because of business purchases; it’s done well because of global consumer purchases.. ... Capital budgets have been shut down since last year.”
Looking ahead to next year, Otellini said he doesn’t “see anything that says the consumer will slow down.”
“The trend towards mobility is unabated, laptop price points have come down, netbook price points have come down,” he said. “So more people are coming into the community. ... So you have a decent consumer business and some beginning of a corporate refresh in 2010, and you get an optimistic view of the world.”
Otellini said the technology industry began feeling the downturn “probably sooner and deeper than other industries and is coming out of it sooner and faster than other industries, and the semiconductors are the earliest part of that.”
“Our chips go into stuff two months before people buy a computer, typically,” he said. “As the raw demand starts picking up again, we’ve been coming out of it.”
Otellini said the industry also has a promising long-term outlook, even in hard times. “A computer is going to become indispensable; your cell phone’s going to become indispensable,” he said. “So if it breaks, you’re going to get a new one. You don’t wait for the recession to be over.”
Otellini said he doesn’t see the president’s stimulus bill as directly responsible for the signs of recovery, but it’s “pretty clear” that the steps both administrations took to shore up the national system worked.
“Was it too much? Was it too little? Who knows?” he said. “Financial systems are all about confidence. ... Recessions are all about confidence. And the actions that were taken were sufficient to shore up the confidence of the individuals in the financial system, so we didn’t move back. Success.”
Otellini said he applauds Obama’s ambition. But he said he wonders about all the administration is trying to do in “a very fragile economic time.” He counseled a “do-no-harm” approach, particularly when it comes to imposing new regulations to combat global warming and raising taxes.
“I’m not sure that they prioritized their lists after they reached the depth of the recession,” he said. “If I were giving them advice, [it] would be to prioritize based upon the things that will help the country and get things back to normal. And the more uncertainty you put into the variables that are on capital formation, the longer it will take for them to recover.”
Otellini said he approves of government investments in long-term infrastructure, including broadband and health care information technology, “anything that when 20 years from now, you look back, [you] say, ‘This was important to me that I made this investment during that period.’”
His top concerns on the Washington agenda include science, immigration and open trade.
“I am impressed by this administration so far and their willingness to reach out to people and say, ‘What are we doing wrong? Where can we improve?’” he said. “A number of the senior aides have done that. ... I think they have a legitimate interest. You can argue whether their actions will follow through. But the fact that someone is curious enough to ask the question, I think, is a good sign.”