ROBERT SIEGEL, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MICHELE NORRIS, host:

And I'm Michele Norris.

Creating jobs in America is hard work. Just look at the most recent numbers to see what this country's facing. First, the good news. The unemployment rate fell to below 9 percent in February, the lowest it's been in nearly two years. And the private sector added over 200,000 jobs last month.

SIEGEL: Sounds great until you realize that there are still almost 14 million Americans who are unemployed. So, how do we get Americans back to work? Well, that's a job for Paul´┐ŻOtellini, who has signed up for it. He is president and CEO of Intel, one of the largest tech companies in the country. He was recently appointed to the´┐ŻPresident's Council on Jobs and Competitiveness. And he spoke to Michele today at the Capitol Hill Club here in Washington.

NORRIS: Paul Otellini, thank you very much for joining us today.

Mr. PAUL OTELLINI (CEO, Intel): Pleasure to be here.

NORRIS: Now, we're going to talk to you about jobs, innovation, the reason you're here in Washington. But I want to begin by asking you, if I can, about Japan. I know that Intel, the Intel Foundation is involved in humanitarian work and the relief effort. But I'm also curious to know your thoughts on how this will also impact the business community and the global economy since 60 percent of silicon comes from Japan. What will be the short-term and the long- term impact?

Mr. OTELLINI: Well, sure. First of all, we're as distressed as anyone to see the destruction and the loss of lives there. I mean, it really is quite sobering. And when you live in California, it's quite a - as I do - it's quite a reminder of the need for preparedness, right? In terms of Intel's operations there, we don't have any factories in Japan. As near as we can tell, all of our suppliers' factories are in solid shape.

NORRIS: What about the industry as a whole?

Mr. OTELLINI: In terms of the industry, up north where a lot of the damage was, our other semiconductor manufacturers, that build principally, memory chips so things like flash memory that would go into your iPod or those kinds of devices, phones what we've seen is that those factories are in good shape. Again, the issue there is power. And for semiconductor factory, you need constant power and water. So the infrastructure will be the limiting factor there.

NORRIS: Let's turn to the reason for your business here to Washington, D.C. The president, in his State of the Union address, said we've got to - as a country, we have to out-innovate, out-educate and out-build the rest of the world. And I'm hoping that you'll be honest with me here. Right now, is America in a position to do that?

Mr. OTELLINI: Well, I think an objective view would certainly show that the U.S. is at the top of the technical and innovation heap. But in engineering, we don't look at instantaneous results; we look at the first derivatives. And the first derivative here is not positive in terms of the number of graduates, the number of companies being formed, the number of patents inside the country versus outside the country. All of those things are pointed in the wrong direction today.

And if they are not remedied in a way that attracts investment and attracts the right kind of human capital, we will find ourselves not at the top of the heap. I was heartened to hear the president take it up because I think it really is -it is something for a politician to say, if we don't fix this, we're going to be in trouble.

Politicians don't usually say, you know, the second part of that sentence. They say, we need to fix this, and we need to be great. They're very shy at saying, or else we're going to be a second-rate country or economy. So I give him credit for saying that.

NORRIS: Is that a real possibility?

Mr. OTELLINI: Of course. There's no - I mean, all you have to do is look at the cycle. I mean, the U.K. a hundred years ago was where America was. And the U.K., I imagine sitting in Britain 110 years ago, looking at the rising giant of the United States, you know, the buildings going up and the new factories and the schools and the universities. And they must have been saying, oh my God. And in fact, the U.S. eclipsed the U.K. and most of Europe.

Well, we're sitting here today looking over the next ocean, the Pacific this time, and the infrastructure being built out in Asia - not just China, but across Asia. And we should be appropriately saying, oh my God.

NORRIS: You know, on education in particular and what needs to be done, your concerns were echoed in a statement from your director of global public policy. I'm going to quote him. He said: We try to hire Americans first, but we can't find enough qualified Americans for high-level projects. That was Peter Cleveland, and he was speaking here in Washington in September. So what's the one thing that this country needs to do - or perhaps the top three things that the country needs to do on the education front, to remain competitive?

Mr. OTELLINI: I think you have to look at them in time phases. If you look at the graduate schools in math and science and engineering in this country, they are still the best in the world. Half the seats in those programs are taken up by people who do not have a right to work here the day they graduate.

Now, part of that is good. What part of our job is to help educate the world? That's what the university's charter is at. But a lot of these kids want to work here. They want to start companies here. They want to grow their families here. And we basically say sorry, the visa allotment is up as of May. And so by the time they graduate, it's gone each year. This is a real problem.

NORRIS: So you're saying that because of immigration policy, we're exporting talent?

Mr. OTELLINI: So the first thing you do is, I think you start saying - it's an old remedy that tech's been talking about for some time. Staple a visa to everyone who gets a high-tech degree.

NORRIS: What can the government do to create jobs - or can the government create jobs?

Mr. OTELLINI: Well, I mean, the most important thing that government can do to create jobs is get out of the way, right? Make sure that the regulations for building new factories are easy to get. You can get a new permitting process. The second thing you can do is start attracting human capital. We talked about that.

And the third thing is now, a new investment capital. And one of the ideas, you know, that I happen to like is anyone that wants to build a new factory in this country, whether it's an American firm or a foreign firm, why don't we give them a five-year tax holiday?

It doesn't cost anything, right? You're just deferring the tax revenues that you would ordinarily get. But meanwhile, you get a factory, and you get jobs. And the present value of that - when you look at a factory kind of environment - is very, very lucrative. You say, this makes sense now to put a factory here. And everybody wins.

NORRIS: Can this country afford that right now?

Mr. OTELLINI: Well, it doesn't cost anything, right? Right now, you're not getting the investment, you know. And you're not getting the incremental tax revenue. Here you get the investment, and you'll get the tax revenue...

NORRIS: Eventually.

Mr. OTELLINI: Five years out.

NORRIS: Was there a business trip that you took - or a country or a factory that you visited overseas - where you came back, and that really became very clear for you, what America really better focus on?

Mr. OTELLINI: Well, every time I go to China, I come back and I tell my staff that it's like going and dipping yourself in the fountain of youth of computing. Because the lust for technology, and the love of technology, in China and in Asia in general is, you know, 5X what we have here.

The Chinese have a program to say, to shift from "made in China" to "invented in China." That's one of their five-year plans. So yeah, I come back from China and say, you know, we have to step up our game to compete with them.

NORRIS: Paul Otellini, thank you very much.

Mr. OTELLINI: Pleasure.

NORRIS: Paul Otellini is the president and CEO of Intel.

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