Intel's Barrett talks up tech rebound
Craig Barrett, the head of Intel, predicted a bounce back to full strength for the tech sector by early 2003 at the latest. Speaking at a conference in Spain the man was strangely upbeat, given that many in the semi-conductor industry are saying this is the worst recession in the industry's history, claiming that the next year or two will see a full recovery of fortunes.
It's only the pure play tech firms that can expect an imminent upturn in fortunes, according to Barrett, by early 2003. The telco industry on the other hand, which is possibly the one that will have the most effect on all of us, will not see any sustainable up turn until the end of 2003 and, more likely, 2004.
That's only part of the picture of course. Barrett's comments were in sharp contrast to those made by Intel which has yet to make any predictions about a return to full health this year. Also, as Barrett noted in his address to expectant Seville crowds, the future of technology may not be so sound even if there is a recovery next year. He warned that if the Venture Capital funds dried up there would be little in terms of innovation.
That's a good point considering that Venture Capital funds clearly are drying up for the tech sector. According to a recent study from PWC, the level of investments made into the software industry have fallen by 16% of late. It's still getting the lions share of investment from the VC's, but nothing like previous levels. Similarly, the dot com collapse has a tumultuous effect on Entrepreneurship too, where many of the good ideas are nurtured. According to a recent study from the Global Entrepreneurship Monitor the number of people taking such a gamble has fallen by 30% year on year.
Much like the long awaited dossier of evidence on Sadam Hussein and his cronies, however, Barrett had little in the way of tangible evidence to present. Instead he turned to his own inner feelings as proof saying that, "I've never been more optimistic."
That may have been enough to soothe the nerves of casual investors, or the inept, but it did little to dampen the feelings of woe currently visible in tech outfits across the globe. Many, potentially more realistic, views about the tech industry suggest that this is as good as it gets. Larry Ellison, the head of Oracle, for instance, said recently that the next set of millionaires to hit the sunny sidewalks of San Francisco would be those in the Bio-tech field - not the software vendors.
Looking at stats for recruitment, always a good sign of an upturn as companies dip into their pockets for technology projects, they too paint a bleak picture. According to a recent Computer Weekly study online tech job advertising through the second quarter of the year fell by more than a quarter over the previous quarter. Similarly in the newspapers, they saw a fall of more than three quarters - showing few signs that new technology projects are about to be launched.
You may also recall that EMC, along with much of the rest of the tech industry, has just slashed its headcount citing a 'brutal' quarter as reason for the cull. That's pretty much the message across the board and with the Tech unemployment rate currently reaching previously unknown levels, it looks more like this 'recession' is actually a much needed correction.