National Semiconductor CEO Brian Halla: 'we are sitting in the middle of a perfect storm of...

National Semiconductor CEO Brian Halla was trying out images, looking for one vivid enough to bring home his misgivings about America's current readiness for world competition in technology. Might it be Sputnik's flyover awing his Midwestern neighbors in 1957?

Business Credit Solutions

• Get a Credit Report
• Get a D&B D-U-N-S Number
• Monitor My Business Credit - FREE TRIAL!

Business Credit Advice

• Business Credit Basics
• Build My Business Credit
• Extend Credit to Customers
• Use My Credit to Get Loans

The problem, as Halla framed it, is that money for basic research--the kind that produces fundamental discoveries and opens up the longterm commercial horizon--has dried up. "What we're finding is that some of the coolest stuff in the world can't get funded other than from industry," he said, "because the pipeline from government funders has been cut off."

But in a "fiercely competitive environment" and under pressure from Wall Street analysts, Sarbanes-Oxley, and frivolous lawsuits, U.S. corporations have neither the incentives nor the means to underwrite an R&D program adequate to national needs, according to Halla. For one thing, "industry is no longer focused on R, we're all doing D: With the exception of a couple of companies, we're all looking at a six-month lookout." For another, industry funding efforts amount to "nickels and dimes"--to "$20 million here and $30 million there"--when a "fix" that Halla put at anywhere from $10 billion to $40 billion is what it will take "to secure the leadership" in technology for the U.S.

The consequences of inaction, Halla warned, promise to be grim. Among them, he sees "NSA trying to order parts from China and being on an allocation list. 'I can't get delivery? What? What do you mean? Didn't start my wafers? Why not?'" So he's devoting time and effort these days to "trying to raise awareness without Sputnik having to go up, without DARPA or NSA having to stand in line to get their chips because they're being allocated to Estonia and God-knows-where else."

The main target at a time of what Halla sees as generalized suspicion, if not disdain, toward corporations must, he believes, be the electorate. His keynote speech at the Innovation Leadership Forum of the International Electronics Manufacturing Initiative (iNEMI) in Herndon, Va., last month followed a talk during which Rep. Frank Wolf, R-Va., had counseled iNEMI members that winning increased funding for research would require carrying four critical "precincts": President Bush, Vice President Cheney, Office of Management and Budget Director Joshua Bolten, and White House Deputy Chief of Staff Karl Rove (MTN, Sept. 20, p. 5).