Former Intel CEO Craig Barrett says pining for manufacturing jobs is the wrong way to go

Craig Barrett stopped by the ITLG Innovation Summit in Santa Clara (where he’s a keynote speaker tonight) to share with entrepreneurs some lessons he’s learned from the business world.

Barrett shared his thoughts about manufacturing and success with some Irish and Irish-American entrepreneurs on Monday.

The first thing he had to say was that you can forget about lost manufacturing jobs coming back to the United States. I had asked him on the way into the room if he’d have some time to talk to me later about the future of manufacturing in the valley.

“Is there any?” Was his deadpan response when I asked.

Anyway, he told a group gathered for a CEO boot camp that more manufacturing jobs weren’t really what the country needs in the future.

“There is a lot of discussion in the United States today about what to do in the 21st century, how to be competitive,” Barrett told the folks gathered at the summit sponsored by a group of Irish and Irish-American business people.  “If any of you have had that bit of insomnia and you’ve watched some of the Republican debates, or if you haven’t watched the Republican debates, you’ve heard President Obama on his lecture tour, called his re-election tour I guess, not a lecture tour, saying we’re going to bring manufacturing jobs back to the valley.”

Not going to happen, Barrett says.

“But the 21st century is really not about bringing lost manufacturing jobs back to the United States, or to Ireland or to any other country,” Barrett added. “It’s really to create jobs, which will bring with them wealth creation, which are going to be created by smart people with smart ideas, operating in the right environment, that is innovation environment.”

What that says to me is that the United States is going to have to get a lot better about preparing workers to be smart people with smart ideas, because the well-paying jobs that manufacturers used to create in the U.S. are disappearing fast.

It’s hard to argue with Barrett’s general point, but the fact is there is manufacturing going on — even in Silicon Valley. True, these plants tend to be making very specialized or early-stage devices or specialty consumer items, but they are here nonetheless.

The question is why do some companies continue to manufacture here and can we learn anything from them that might lead to more manufacturing jobs? I’m planning to explore this issue in the coming months.

Feel free to send me your ideas or leave them here.

Now, on to Barrett’s lessons for entrepreneurs:

1)Keep asking why. It’s unlikely you’ll get the real answer the first time you ask.

2) It’s OK to change the rules. When Intel launched the “Intel Inside” campaign it was changing the rules by creating a purchasing preference for a product no one would ever see — a chip.

3) Always change before the market forces you to change. One word: Kodak. The company filed for bankruptcy in part because it was forced to change by the evolution of digital photography (and it changed too slowly).

“Every time the market forces you to change,” Barrett said, “you’re in danger of disappearing.”

4) Frontal attacks hardly ever win. Consider the idea of a start-up challenging Intel in the microprocessor market. It would be lunacy. It’s hard to displace the reigning champion unless there is a shift in technology — such as the change from analog to digital telephony.

5) Go to the consumer with your product, not a vice president or CEO. Get consumers excited about a technology and they will start demanding that kind of technology at work.

6) Big company CFOs are your best friend as a start-up founder. When a CFO can’t see a clear return on investment, he or she will kill the initiative within his organization. That means you — the start-up founder — is free to try to make a go of the idea.

7) Never, ever, ever listen to a financial analyst. Barrett says financial analysts are as bad as journalists.

“They have to find fault,” he said. “They can’t praise by their nature.”

When your company is doing poorly, financial analysts will point that out and say you’re through. When your company is doing well, financial analysts will say such performance can’t be sustained.

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