Barrett says time is right to close digital divide

Barrett says time is right to close digital divide

Craig Barrett has turned his attention to a new challenge -- spreading computers and education throughout the developing world.

Craig Barrett spent decades using his business skills to make Intel the world's most powerful semiconductor company. He has now turned his attention to an even bigger challenge — spreading computers and education throughout the developing world.

The Intel chairman, who gave up his CEO title in 2005, was at the Consumer Electronics Show last week to launch the Small Things Challenge, which encourages individuals to take small steps to help bring relief to the world's poorest countries.

The challenge seeks donations to Save The Children's Rewrite the Future program, which provides education for children in war-torn countries. And Intel will donate US$0.05 for each person who simply visits the Web site, up to a maximum $300 million this year.

But for Barrett it's about more than charity. Visitors to the site can also make a "micro loan" to a local entrepreneur through, which displays profiles of people seeking funds to grow their business — a plumber in Uganda who needs supplies to open a hardware store, for example. It delivers the loans through a local partner and aims to repay them after six to 12 months.

Barrett sat down with IDG News Service at CES to talk about the effort to raise living standards in developing countries, as well as Intel's Classmate PC and whether he misses his day-to-day role managing Intel. Following is an edited transcript of the discussion.

IDG News Service: We've been hearing about efforts to close the digital divide for several years now, but the progress often seems frustratingly slow. You seem to think we're at some sort of tipping point. What makes you so optimistic?

Barrett: There are two reasons. If you simply look at where the growth opportunities are in the ITC market, they happen to be in emerging countries, and if you look at the sheer numbers — more Internet users in China than the U.S., more cell-phone users in Africa than in the U.S. — to me this seems to be a tipping point just from bulk numbers.

Secondly, look at the usual sequence of events in developing countries — first you have nothing, then you have cell phones, then you have Internet penetration. Usually there's a four- or five-year delay between each. The last holdout I thought would be Africa, but I've been pleasantly surprised by what's going on there. Take a simple example — last year my wife and I were in Tanzania to climb Kilimanjaro. Our guide was talking to his family on a cell phone all the way up the mountain. Not only are you seeing cell-phone penetration in Africa, but you've got three or four submarine fiber cables coming into the country, both in South Africa and East Africa. You've got the possibility to combine those landings with broadband wireless to cover the continent. So I've got to get optimistic that this stuff is happening.

IDGNS: So you think there's enough of an economic incentive now to make wiring poor countries attractive to businesses?

Barrett: Sure. China is the biggest cell-phone market and the second-biggest computer market, and it will be the largest in a couple of years. India is following four to five years behind China, and Africa is four to five years behind India. So this is happening everywhere.

IDGNS: What's the biggest obstacle that remains?

Barrett: It's still the educational opportunities for young people. Not only do you have 75 million kids who don't go to school who should, you still have mandatory school ages in some countries that are relatively modest. I'm a firm believer that if you give every young adult an opportunity — that's education and economic — the world's going to be a much better place. If you look at the world's hot spots today, they are places where the young population doesn't have any future, any opportunities. So they say what the hell, let's go blow up somebody.

IDGNS: What's the biggest obstacle from a technology standpoint?

Barrett: It's probably to provide the software and solutions these countries need. India has 14 national languages plus thousands of dialects. South Africa has 11 national languages. So there's a huge business opportunity to create content and software in local languages. We just need to get these things stacked up together once you have the infrastructure in place.

IDGNS: How much does it cost to produce one of your Classmate PCs — I read about $300?

Barrett: It's a couple of hundred dollars, I'm not going to get specific. The "landed cost" to make it and deliver it someplace depends a lot on taxes and tariffs, but the netbooks themselves — the XO and the Classmate — are all in that category, two to three hundred dollars.

IDGNS: Is that low enough to deploy them widely in the poorest countries? How low can you get that price?

Barrett: If you look at any of the trends, the costs are going to come down. Look at Portugal, which at the current cost has committed to doing 500,000 Classmate PCs. Venezuela has committed to buying a million. So it's apparently low enough for countries that are relatively low on the economic ladder to make a big investment.

IDGNS: Portugal's a bit better off than Bangladesh.

Barrett: Yes, but the trend is in the right direction; we're down to a few hundred bucks.

IDGNS: How many Classmates do you have in the field today?

Barrett: There are hundreds of thousands of them out. The Portugal deal by itself is 500,000. Venezuela is a million.

IDGNS: So Portugal is manufacturing these locally?

Barrett: There's a private Portuguese company that's basically manufacturing off the reference design. I thought their approach was very smart. They want every kid to have a PC but decided not to give them all away. They subsidized them on the basis of parental income so there's a sense of ownership. Poor kids get them fully subsidized, medium-income kids pay part of the cost, and well-to-do families buy them. It's produced locally, so it creates economic development with the production and service contracts.

IDGNS: A lot of people say the next few billion people on the planet will experience the Internet through a cell phone or some other device, not a PC. Where does that leave Intel? Do you become less relevant or will you start making wireless chips for cell phones?

Barrett: Clearly the Atom processor and small form-factor devices like netbooks and MIDs [mobile Internet devices] are in that direction. And by the way, I don't necessarily agree with the question. There are three interesting form factors that will continue to exist — the big screen of the TV, the interactive screen of the PC, and the small screen of simple, limited information-access devices. I see those three screens continuing to exist throughout the world. It's hard to say PCs won't be heavily used in poor countries when you see over 300 million Internet users in China.

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