By Richard Grant

British business will be warned that it must learn to deal with e-commerce if it is to survive in the global market. The warning will come from Dr Andy Grove, one of the founders of microchip giant Intel, at a key meeting staged on Tuesday by the Confederation of British Industry. The sell-out meeting is the first the CBI has setup to hear a single speaker. Grove will address 400 business leaders, with the same number having been turned away. The hunger to hear his views stems from his unique multiple role as a technologist, academic and management guru. Grove, 63, who emigrated from his native Hungary in 1956, was recently described by America's Fortune magazine as possessing 'a paranoia bred from having been a refugee from the Nazis and then the Communists; an entrepreneurial optimism instilled as an immigrant to a land brimming with freedom and opportunity; and a sharpness tinged with arrogance that comes from being a brilliant mind on the front line of a revolution'. Grove co-founded Intel in 1968 and presided over its meteoric rise to become the second most valuable high-tech company in the world after Microsoft. He is the author of a key academic text on the physics of microchips and the business bestseller Only The Paranoid Survive. Now chairman of Intel, Grove said in an exclusive interview with Financial Mail that his message will focus on the immediate need for British industry to understand the importance of business-to-business e-commerce if it is to survive and prosper in the global economy. It follows a warning he made in 1997 that Europe was in danger of being left behind in the Internet race by Asian economies.

Grove believes that since then, Europe, especially the UK, has woken up. He cites Tony Blair's stark warning to industry last week to become computer literate or risk bankruptcy. 'Two-and-a-half years ago no European prime minister would make a comment like this. The apathy was alarming' , says Grove, who will meet privately with ministers during his visit. While the Internet gap between the US and the UK has closed slightly. Grove fears that many British businesses still fail to grasp that merely having a Website is not enough. He will warn that 'in five years time there won't be any Internet companies. All companies will be Internet companies or they will be dead'. The impact will come, he says in business-to-business e-commerce. Firms sharing data over electronic networks 24 hours a day will be a feature of everyday life. What is leading-edge technology today will be seen as normal practice tomorrow. Every company will be doing it, but those doing it on competitive basis first will get a lasting competitive advantage by attracting and keeping customers. There is nothing inherently American about this. Customer acquisition and retention skills based technology will become universal. The risk is for companies to get left outside these data-sharing networks. 'They face the same isolations that a country faces when it becomes the victim of a trade war' he says. While Grove believes that the stock market prices of many Internet companies are overvalued on a conventional basis, he says Intel will continue to increase its investments in Internet start-ups, now worth £2.2 billion. More will be spent overseas where start-up technology companies are better value, says Grove. America does not have a monopoly on talent or brains. Intel's UK investments include bargain holiday seller Lastmininute.com, fibre-optic chip maker Bookham Technologies, Web security specialist Baltimore Technologies and media rights outfit Eagle Rock Entertainment.