Chairman of the Board of Intel Corporation Craig Barrett argued about the importance of keeping pace with the global economy at the Yale School of Management on Tuesday, responding to criticisms made last year by SOM Dean Jeffery Garten that Intel outsources high-level jobs.

Barrett’s 30-minute speech, presented as part of SOM’s ongoing Leaders Forum series, drew a packed audience in SOM’s General Motors room and was followed by a 45-minute question-and-answer period. The chairman addressed Garten’s article, “The High Tech Threat from China,” which ran in BusinessWeek Magazine in late January 2005 and singled out Intel as one of a number of Western companies speeding up China’s advancement by establishing huge research and development facilities there.

In his presentation, Barrett also focused on international competitiveness and its rise over the past decade, saying that his travels to up to 30 countries a year have provided him with insight on the rapid expansion of the global marketplace.

“In the last decade, we’ve seen the fall of the Iron Curtain and China’s entry to the global market,” Barrett said. “That means there are 3 billion more consumers and 3 billion more people who want jobs in established economies.”

Barrett spoke directly to criticisms in Garten’s piece, in which the dean argued that “U.S. companies are understandably seeking the best talent and lowest cost of operations anywhere, but in the process they are sharing America’s intellectual treasures with a foreign rival in unprecedented ways.”

Addressing SOM students, Barrett said that the question was not how to prevent outsourcing, but how to maintain America’s competitiveness in the international economy.

“The answer is to examine our education systems, create value by adding ideas generated through research and development, and creating an environment to support investment and education,” Barrett said. “Unless you maintain those three factors, you risk dislocation in this new economic order.”

Barrett said the United States has mixed success in each of the mentioned areas.

“K-12 performance on math and science in the U.S. is in the lowest 10 to 15 percent among the established economies,” Barrett said. “We also have one of the highest corporate tax rates in the world at about 35 percent because the U.S. looks at investment as a tax base, while other countries look at it as a means for the creation of jobs.”

School of Management professor Judith Chevalier said she enjoyed the general theme of Barrett’s talk, but would have liked to hear more details about specific initiatives that Intel has undertaken.

“He made a lot of points I agreed with about research and development and education being an important factor in developing economies,” Chevalier said. “There were points I would have liked him to talk more about at length. I would have loved hearing more about how teachers in developing nations are using computers and the Internet in the classroom.”

Abiodun Aina SOM ’06, one of several students who attended an informal lunch with Barrett following his presentation, said the chairman came across as a relaxed and open speaker.

“He seemed very thoughtful and very engaging,” Aina said. “He was comfortable with the issues we were discussing and obviously very well-informed.”

Barrett, who was elected to the Board of Directors of Intel in 1992, became president of the board in 1997 and chairman of the board in 2005.

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