IDG News Service — Intel Capital and other venture capital firms will invest US$3.5 billion in U.S. technology firms over the next two years, and Intel and 16 other large U.S. companies will step up their hiring of U.S. college graduates, especially those in computer science and engineering, Intel President and CEO Paul Otellini announced Tuesday.

Intel, Google (GOOG), Microsoft (MSFT), eBay (EBAY), Cisco Systems (CSCO) and other companies will hire 10,500 additional graduates from U.S. colleges in 2010, with many companies doubling their hiring from 2009, Otellini said in a speech at the Brookings Institution in Washington, D.C.

"Collectively, this is a bet on America's next generation of innovators," Otellini said. "We cannot afford to let our future scientists and engineers sit idle after graduation."

In some cases, the college graduates might not be U.S. citizens, but residents of other countries who attended college in the U.S., Otellini said. During his speech, he complained about current limits on the number of foreign workers U.S. tech companies can hire. "Our immigration policy seems deliberately designed to prevent us from attracting the best minds in the world," he said.

The venture capital and student hiring commitments are part of a new Invest in America Alliance spearheaded by Intel. The venture capital effort will focus on clean technology, information technology and biotechnology, and in addition to Intel Capital, Intel's investment group, the 23 other venture capital groups participating include Menlo Ventures, Kleiner Perkins Caufield & Byers and Canaan Partners. Intel Capital will invest $200 million in the venture capital effort.

Asked if the $3.5 billion in venture capital investments was on top of money venture capital firms would have already invested, Otellini said he wasn't sure about other venture capital. The $200 billion from Intel Capital is money it hadn't planned on investing, he said.

The new announcements come a year after Intel announced it would invest $7 billion in U.S. microprocessor manufacturing facilities. Intel is on track to spend that money as planned, with two factories in Oregon producing chips, and two more in Arizona and New Mexico scheduled to start production later this year, Otellini said.

Otellini spent much of his speech talking about areas where he sees that U.S. efforts to support innovation need to improve. Several countries now offer a more generous research and development tax credit than the U.S. government, he said, and U.S. corporate taxes are the second highest in the world.

Asked to rate Congress, Otellini graded its performance as "pretty poor."

"It's been a series of endless compromises and debate at a time when action is needed," he said.

While a huge economic stimulus package that passed Congress in early 2009 may have prevented economic disaster, much of the money won't go out until 2011 or 2012, he added.

Countries including China and India are pumping huge money into tech investments, and India has launched an aggressive broadband plan, Otellini warned. "The countries of Europe, Asia, Latin America, and before long, the Middle East are going to be competing with us in every sphere of the economy in years ahead," he said. "If we want to stay with them, and remain a vibrant growing economy, we have to recommit to a strategy that drives the economic growth of the future."