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For Intel, the business side of doing good

Chairman Craig Barrett talks about WiMax, laptops for kids and how good works can help a tech company's bottom line.

Former Stanford University professor turned technology executive, Craig Barrett believes that it's the duty of every large company to give back to society in some way.

As chairman of Intel, the largest chipmaker in the world, he not only helps define the vision and strategy of Intel, but he is also working with world leaders as chairman of the United Nations' Global Alliance for ICT and Development. In this role he acts as an ambassador of industry, helping to map out strategies for using technology in underdeveloped regions to improve education and health care, and spur economic growth.

Barrett is part of a new crop of Silicon Valley executives who believe that giving back to society is a key component of what they and their companies should be doing. But giving back and doing "good" aren't always motivated by pure altruism, nor do their efforts manifest as pure philanthropy. Barrett, like others in the technology industry, see the billions of people living in the developing world as an untapped market of potential Internet users who could one day drive their businesses to new heights.

CNET News.com sat down recently with Barrett in New York, where he delivered a speech at the World Business Forum conference about how Intel is helping make the world a better place and how that work is also benefitting the company.

Q: You've been involved with the United Nations' mission to bridge the global digital divide through the use of technology. In fact, you are the chairman of the U.N. Global Alliance for ICT (Information and Communications Technology). Why is it important for Intel to be involved in this initiative?
Barrett: The U.N. Global Alliance is reasonably aligned with Intel's World Ahead program, which focuses on using technology as a tool to improve education, health care, economic development and e-governance. Those happen to be exactly the same objectives that the Global Alliance has as it goes into developing countries to aid them in their educational development, health care development and economic development.

The Internet and computers are tools. And the impact they make depends on how intelligently those tools are used. We believe that intelligent use of technology can make education better.

Why specifically is Intel concerned with improving education or helping eliminate poverty? It's not necessarily something that will help grow revenue.
Barrett: There are several reasons. One is we have been involved in education for decades, supporting education and teacher training in math and science for a long time with programs, such as the National Talent Search. For years we've been trying to promote math and science. And there are two reasons for that. One is it's a philanthropic effort. So we're giving something back. But it also helps our business. Our employees must be math and science literate. And if you look at the greater picture there are about a billion users of the Internet out there. So that is a billion potential Intel users who will need to be computer and Internet literate as well. There's always some relationship back to the business, but it's in parallel to our main philanthropic activity to improve education.

Do you think large corporations, in particular technology companies, have a responsibility to give back?
Barrett: I don't think the question should be limited to technology companies. I think every company has some level of obligation to give something back to society and to be a good member of society. The tech companies may be good examples of this because we tend to operate all around the world and sell our products around the world. So that global view that we have may make us more likely to contribute on a global scale. But I don't think this should be limited to technology companies. I think that a Boeing or Alcoa has the same sort of obligation.

How do you think the Internet and, more specifically, wireless broadband technologies such as WiMax can help reduce poverty around the world?
Barrett: The Internet and computers are tools. And the impact they make depends on how intelligently those tools are used. We believe that intelligent use of technology can make education better. You'd be hard-pressed not to say that using broadband wireless or some wireless technology and remote diagnostic equipment will not improve health care. You'd be hard-pressed not to say that bringing farmers in rural environments more information to help them figure out how to sell their products at a market themselves, and eliminate the middleman so they could keep more of the transaction value for themselves, doesn't promote economic development. You'd be hard pressed to say that a kiosk in a small village or community in a remote part of the country that helps people remotely register or sign up for certain government programs rather than (them) traveling to the big city to do that, doesn't offer a value.

So in areas of education, health care, economic development and e-governance, these benefits are no-brainers. But it has to be the intelligent use of technology and not just throwing any technology at the problem that makes a difference. I can guarantee you that a farmer in central China is not interested in reading about what's happening on Wall Street. They aren't interested in Silicon Valley content. They are interested in content which relates to them and solves the problems they have. So local content, meaningful content is the key to all of this.

In July, Intel joined One Laptop Per Child, the program started by Nicholas Negroponte. Previously, you had been outspokenly skeptical of the program. Why the change of heart?
Barrett: Can we be real accurate on this? About two years ago I called it a gadget. Since then it's been redesigned. I called it a gadget once. I incurred the wrath and ire of Negroponte and his team, who for the past two years have targeted Intel as the big evil company. They have redesigned their product. Negroponte ascribes to a different educational philosophy than we do. But we think it's an educational philosophy that may have some success in some environments. And it is a way to get low-cost computers in the hands of people who wouldn't otherwise have that opportunity. So we support him.

Intel is backing major WiMax initiatives in India, China and Africa as well as in other parts of the world. As one of the major technology providers for WiMax, Intel could benefit a great deal financially if these regions adopted WiMax technology. I asked Cisco's CEO John Chambers a similar question. Do you think it's all right for companies to benefit financially for their so-called "philanthropic" activities?
Barrett: Golly, I think probably there is something of a virtuous cycle. Doing good often creates business and economic growth. And that growth allows for more good to be done. By the way, we are not a service provider. We don't provide WiMax service. That's for the telecommunications companies to do. Intel is a technology company.

True, but Intel makes the technology and the chips that will be embedded in devices that will use these WiMax networks. So some critics suggest that Intel's participation in these programs is really self-serving, because it could lead to the sale of more WiMax chips.
Barrett: That certainly is a possible interpretation. But WiMax as a broadband technology is the most cost-effective technology available today to reach the most people in rural and under-developed countries, which is why I think you see hundreds of trials of this technology around the world. And it is being received in most of the emerging market places very well.

I think probably there is something of a virtuous cycle. Doing good often creates business and economic growth. And that growth allows for more good to be done.

Some of the detractors of the technology may be people who have spectrum licenses and who have invested in technologies like 3G. They may not want the competition. So they might suggest that it's not a proper thing to do. But it's really an issue that the country and the carrier have to decide. They have to decide what is the best technology for their needs and investment. We are encouraged that there are a couple of hundred trials and 50-some odd commercial deployments of the technology. So a whole bunch of people must think that it's a worthwhile investment, because they are putting their dollars behind it.

Many experts agree that WiMax seems like a good fit for the developing world where there is relatively little fixed communications infrastructure. But what about in developed markets like the U.S.? There has been a lot of criticism lately of Sprint's WiMax strategy. Do you think there is a place for that technology in the developed world?
Barrett: You have to do the business analysis just like you would with any other technology in any region. Is there a demand? Are there customers? Will you get a return on your investment?

But that seems to be the issue. There are a lot of Wall Street analysts who question the business case for deploying this network when there are already other technologies in place that could provide similar services.
Barrett: You'd have to ask Sprint about why they chose WiMax and if their business model holds up. Their CEO just departed, but you'd have to ask them if they went through a detailed technical and financial analysis to find out why they chose WiMax. And then you'd have to ask Clearwire why they decided to do the same thing. At the end of the day, it should be a decision made on the business merits of the technology. Is there a customer base? Will there be a return on investment? No one is forcing these companies to use this technology.

But Intel has certainly been pushing it and touting it as the best solution for mobile broadband.
Barrett: There is no doubt we have been one of the technology founders of WiMax. And we push it as a solution. But there are obviously people who have other interests, like the 3G cellular market. If they paid billions of dollars for their wireless licenses, they might not look favorably on another competitive offering. I think it's appropriate to look at who might be criticizing WiMax and why. And if you look at the people who have chosen WiMax, I'd assume that they have done their homework on the technology.

Intel has done an amazing job branding its chips for PCs, laptops and servers. Do you think the company can take that same strategy and apply it to the mobile computing market? For example, I know the laptop I'm using right now has an Intel processor. It says so on the sticker. But I couldn't tell you what processor is used in my smartphone.
Barrett: It all depends. There are not many successful component brands. NutraSweet was one. But their patent ran out and the brand was commoditized. Dolby Sound was another one. If you buy a stereo system, you still see the Dolby sticker. And Intel was another. But you have to have a unique set of circumstances for it to work.

Are the circumstances right for the mobile computing market?
Barrett: It could be, if in fact, you provide the user a unique experience. If you can bring the total power of the Internet into the device, you might be able to brand the components. Right now using smartphones to access the Internet is too complicated. I can use this device (smartphone) and go to Yahoo. But what I see is not what I am used to seeing. It's not the standard look and feel of the Internet.

But Apple seems to be doing that with the iPhone, right?
Barrett: Apple is attempting to do it , yes. But it doesn't offer the full Internet experience. If Intel accomplishes that, then I think you may be able to brand it in some fashion.