PEOPLE TO WATCH...

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00901R000500230029-0
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 14, 2016
• Document Release Date: November 30, 2000
• Sequence Number: 29
• Publication Date: February 19, 1985
• Content Type: NSPR

25X1A
Approved For Release 20M04ITMACIA-RDP91-00901 ROW640
5 0
19 F
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19
e
ruary,
8
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AIWA
mom
o o,,ple to W un
... Admi-
ral Bobby R- Inman, the for-
mer deputy CIA chief who
heads Microelectronics Cannd
Computer Technology chair-
man has been named deputy
man of the Dallas Federal Re-
serve Bank.
Approved For Release 2003/04/02 : CIA-RDP91-00901 R000500230029-0
 Releae 2003/04/02 : CIA-RDP91-00901 R000500230029-0
PHILADELPHIA INQUIRER STATINTL
13 February 1985
puter consortium on course
By Terry Bivens
Inquirer Staff Writer
AUSTIN, Texas - Seldom has a company
been launched with the fanfare and high
expectations that surrounded Microelectron-
ics & Computer Technology Corp.
The company, known as MCC, was con-
ceived three years ago as a computer-re-
search consortium. Its 12 charter members
included such industry titans as Sperry Corp.,
Honeywell Inc. and Control Data Corp., and
its mission ranked high in both importance
and glamour. MCC would lead a concerted
counterattack against Japan's well-publicized
plan to dominate computer technology by the
mid-1990s.
A year later, the company added to its
reputation with an unprecedented make-me-
a-deal search for a headquarters site. Austin,
the state capital and home of the University
of Texas, outbid 56 other US. cities - includ-
ing Philadelphia - to capture MCC in May
1983. The price was high - a financial-aid
package of 522.5 million and a free Learjet -
but Austin's payback began almost immedi-
ately.
"Within two days of MCC's arrival here,
real estate people rented out one million
square feet of office space," said Meg Wilson,
science and technology director for Gov.
Mark White, who made the quest for MCC
almost a personal crusade. "Everybody here
_was delighted."
But as state and local officials here toasted.'
their economic coup with champagne and
Lone Star beer MC'C chairman Rohhy R
Inman, _a retired Navy admiral and former
deputy director of the CIA, began the nuts-
and-bolts task of coi venting M CCs vast po-
tential into commercial success for its 12
shareholder compa nie5.
Inman quickly discovered that harnessing
fiercely competitive U.S. companies into a
unified effort - even one as critical as devel-
oping the computers of tomorrow - is easier
said than done.
"The idea of MCC -runs counter to two
powerful currents in American business,"
said Inman, 53. "U.S. companies aren't used to
working with their competition, and they
aren't used to investing money in long-term
projects. At our first meetings here, there
was an aura of distrust and a lot of apprehen-
sion."
Yet Inman, whose scholarly appearance
and ingenuous manner belie his long career
in milita intelligence, has a arently
pule it He discussed the early trigs,
evolution and recent successes of MCC dur-
ing an interview at the company's temporary
offices on a crowded freeway outside of Aus-
tin. Next year, MCC will move into a gleam-
ing new $20 million headquarters building
on the university campus - a part of the so-
called "Texas incentive" that lured MCC
here.
Although commercial products based on
MCC's research are at least four or five years
away, Inman said, the company is well ahead
of schedule. Last month, for example, Bell
Communications Research Inc. confirmed re-
ports that it has applied for membership in
MCC. Known as Bellcore, the Livingston, N.J.,
company is the research and development
arm of seven regional telephone companies,
including Philadelphia-based Bell Atlantic.
Inman would not comment on Bellcore's
application, other than to describe it as "a
major vote of confidence" in MCC. Yet he
said that Bellcore, if approved for member-
ship, would become the 21st shareholder
company in MCC. The company's roster now
includes such industrial giants as 3M Co.,
Eastman Kodak Co., Lockheed Co., Martin
Marietta Corp., Rockwell International Corp.
and RCA Corp.
Investments by the member companies
have also grown, some by as much as 67
percent, said Palle Smidt, an ex-Sperry execu-
tive who is MCC's senior vice president for
planning. After an initial membership pay-
ment of $150,000 to $500,000 (depending on
when a company joined MCC), member com-
panies may choose which MCC project they
will pursue. The projects then require extra
investments of money and manpower.
Progress has been uneven because of the
timings of hirings and the timespan of the
projects themselves, said Inman. The projects
are broken down into four areas: computer
aided-design of complex integrated
circuits; semiconductor packaging;
software technology, and advanced
computer architecture, which in-
cludes work on artificial intelli-
gence. MCC's internal budget for
those projects was $30 million last
year; by 1986, it will be $65 million.
For the member companies, the
cost of participating in those pro-
grams can run up to $1 million a
year, and those funds must be com-
mitted for periods ranging from
three to 10 years. In return, compa-
nies receive exclusive licensing
rights to MCC technologies for three
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 ears. After that, MC 9% ited with
,s 94 -rb~6 eFor Rele ~Yb If a 6t- 1-OO9O1 ROOO5OO23OO29-D'
the results to anyone. easing ear y
Said Inman: "Our job is to develop antitrust problems with MCC. In r the
the technology. How the companies developmental stages. those
use it commercially is up to them. may have frightened away compa*
There is certainly no guarantee that nies such as Westinghouse. Bur,
s
all companies will profit equally. roughs and Xerox, according some
No matter which companies even- observers. But Inman, through his
helped p
tually profit, however, much of the
credit must go to Inman, most ob-
servers said. Inman is said to have
shepherded many skittish companies
through the sometimes-traumatic ex-.
perience of sharing technology with
their competitors, and was ultimate-
ly responsible for persuading them
to provide some of their more talent-
ed researchers.
i Inman minimized such competi-
tive problems, but he acknowledged
that some companies were initially
afraid that participation in MCC
would lead to the loss of trade se-
crets. Moreover, he allowed that
some firms "undoubtedly" offered
their best researchers financial in-
centives for not joining MCC.
"There is always a tendency to
send who's available, not. who's
best," he said.
But Inman apparently solved that
problem by hiring officials who
were not_emvloYees at shareholder
firms. Six of 1VICC's seven project
directors were "outside hires," he
said, as are about 60 percent of MCC's
188 researchers. In all, the company
has 269 employees.
"That was unexpected,", he said.
"At
first, the shareholder
companies.".
i1
Talented researchers from non-
shareholder companies gave Inman
leverage. Several of the sharehold-
ing companies were reported to have
expressed concern that those outside
hirings would dilute their influence
within MCC. Inman would not com-
ment directly, but noted that the
'percentage of MCC employees herisen
shareholder comp
during the last year.
Despite some fears to the contrary,,
Inman. said. he had never encoun-
tered a situation in which ark
mpen
ployee of .a shareholding owhich
was poaching w
tlinvolvede, in D.
n
o
as
that company
The Write for Joining MCC is too
nigh I v, c011! to 'Din rust to
find out what the cvuw~~?~=~--
t " said Inman who in addition to
his C1A work also served as direnM
"And if we did find someono lthat
ect
ing information on a p we'
d send
they were not a party to,
them home immediately.
contacts in Washington,
legislation that eliminated that
threat.
In spite of his successes so far,
Inman was cautious about the fate of
MCC. He noted that some of the lead.
ing companies in computer research
- most notably, IBM and AT&T -
have not joined MCC, apparently be-
cause their research efforts could
profit little from information from
other companies. Too, he said, many
of MCC's projects could be risky.
"Sometimes I wonder if our goals
are too ambitious," he said. "In many
areas, we are trying to leapfrog out
into technologies that are decades
away. There will be failures.
"But I'm confident that we can
develop technology as good as the
Japanese and their Fifth Generation
project," he said, referring to the
Japanese computer-development
plan. "in something like this, you're
never as far along as you'd like to be,
but we're certainly ahead of where I
thought we'd be 15.months ago.'
Certainly, there is no disappoint-
. ment among state officials and resi
dents of Austin, a central Texas city
that Is bracketed by the Colorado
River and a series of lakes known as
the Highlands. Gov. White is among
the many Texas officials who are i
promoting Austin and the University
of Texas as a Southern alternative to
Stanford University and Silicon Val-
h
-
ley - Silicon Hills is the Texas catc
word - and MCC was the crown
jewel in that campaign.
Wilson, the governor's adviser,
said_ an economic! urve _ done by
Texas Commerce Bancshares, a
Houston bank-holding company, esti-
mated that MCC could directly create
as many as 10,000 new jobs in elec-
tronics in the Austin area with the
next seven years.
Lee Cooke, president of the Austin
Chamber of Commerce, said MCC al.,
sad had begun to show the expect-
ed "magnet effect," drawing other
high-technology firms and their em-
ployees into the area. The city's popu-
lation is now 400,000, Cooke said,
compared with 341,000 in 1980.-Cooke
estimated that MCC's economic rip-
ple effect could reach $500 million.
Indeed, Austin's economic boom
has produced some unwanted side
effects.
"Real estate prices are soaring in
Austin," Inman said. "In fact, that's
the only down note."
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