High-tech Wizard Stakes His Chips on a Golf Match

Two weeks before the Iraq war in February 2003, Sir Terry Matthews, the Welsh-born high-tech billionaire, was invited to Baghdad by officials in Saddam Hussein's government to offer advice on modern information systems. 'But I didn't meet him,' he recalls.

It was Matthews, 65, who in 1980 signed the first technology agreement between the Chinese government and a Western firm. He had studied China closely since 1969. The richest living Welshman, who now spends most of his time in Canada, is a partner in Mission Hills, China, the world's largest golf resort with 12 courses built by an army of 35,000 people.

And later this year, a Matthews-owned company will release an amazing advance in screen technology that will enable branch offices in two continents to directly communicate with each other through a three-meter, high-definition virtual window. The device could make hundreds of millions of pounds.

Matthews is far from being a cagey techno-bore. Instead he is intriguing and compelling company, and it's hard to get the quick-thinking electronic wizard to stop talking.

What prompted the publicity-shy businessman to talk to a journalist last week was a major milestone in the project for which he is most famous in his native land. Thanks to Matthews, Wales will in 2010 host for the first time the Ryder Cup golf tournament - the world's third-most-watched sporting event, after the World Cup and the Olympics.

The small, goatee-bearded entrepreneur owns Celtic Manor - a 140-acre golf course near Newport, south Wales. Last week, top European golfers played on what will be the Ryder Cup course for the first time, as the Welsh Open got under way.

Celtic Manor is a perfect illustration of his far-sightedness. In 1980, the Newport-born engineer bought at auction the boarded-up former nursing home where he was born. Matthews then slowly and quietly acquired more land in the stunning Vale of Usk, conveniently close to the M4. Today Celtic Manor contains three championship golf courses, two driving ranges and a luxury hotel, complete with conference facilities, gyms and top restaurants, set in a natural amphitheater.

Winning the right to host the Ryder Cup was the game plan from early on. Now the stakes are higher. There are just two years to go until Celtic Manor becomes for four days the focus of the sporting world. Will the tournament be an operational success? 'Oh, definitely. If you think about it, when I won the right to run this event, there was no Ryder Cup course. This is the first time an event has been run on it. The course was finished last summer. It's had a year to bed in. This is the first time anyone has created a special facility for the Ryder Cup. We have the ability to host 50,000 people each day.'

To Matthews the romance of creating a world-famous facility in his birthplace comes second to business. 'Think of these places as extensions to my home. Very few homes have championship golf courses. When I want to entertain clients I can do it better than anyone else. There's 800 staff here.'

Today, Matthews owns venture-capital firms and is chairman of a large number of technology companies. It is a long way from his beginnings as a laboratory apprentice who left Wales to live in Canada after being offered a job that tripled his salary. By 1972, Matthews had co-founded the Mitel Corporation, which successfully designed and manufactured high-tech voice communication systems. This gave him his first fortune after he sold Mitel to British Telecom.

His second fortune came from the dramatic roll-out of cash machines. Matthews' next outfit, Newbridge Networks, was a leader in data networking. He sold that to French firm Alcatel for $7bn to become the first and so far only Welsh billionaire.

The journey to billionaire status was not all plain sailing. Convinced that noiseless lawnmowers were going to be massive - it was the era when noise pollution awareness was first becoming strong - he placed an enormous order with a Birmingham-based firm. Sears in the United States agreed to sell them and needed the mowers available by January for the spring buying season. Unfortunately, the shipping firm lost the order and Matthews missed his slot. 'I got them in October. You can't give away lawnmowers in October. The guy at Sears asked whether I could turn them into snowmobiles.'

There were times when Matthews had to duck and dive. He asked other businesses on the office campus in which he was based to place Mitel stickers on their doors to make out he was a bigger outfit when prospective clients visited. The innocent scams paid off and now Matthews is recognized as a business mover and shaker all over the world - although strangely not so much in Britain.

In his eyes this is the century of Brazil, India, China and Russia and the marginalization of America and Europe. Matthews first saw Hong Kong in 1969. 'It used to be the domain of white managers and Chinese workers. I watched them get educated in universities. By 1980 it began to switch. By 1989 the Chinese ethnic managers and top vice-presidents had salaries that overtook ours. The work ethic is unbelievable. And the attitude to life. They want to be somebody.'

The dismantling of trade barriers in the Eighties was initially brought about by Western leaders with the aim of taking advantage of a cheap labor pool in far away places. But the tables have been turned in ways the West never dreamt of, believes Matthews.

'Huawei and ZTE [China's biggest network and telecommunication equipment suppliers] tenders a fifth lower than other world players. Who do you think wins? What does that do to other players? Does it make them more healthy or less? Unfortunately, you can only spend on research and development what you get in sales. So here's the thing. Participate in India and China or die.'

The implications for Western business are frightening. If Western companies' R&D is squeezed, are we totally finished? Matthews refuses to give any comfort on this point, preferring to reinforce his message.

'Do you know how much scissors cost in Wal-Mart? It's 23 cents including tax. By the way, they're good scissors - stainless steel and I wouldn't mind paying $6. Tell you what, you don't want to be in the scissor business. You're out of it. You're finished. We've got much higher salaries and all sorts of costs to look after people. So this is a very worrisome time.' The West, he believes, will see at best very low growth over the next 30 years.

These days, Matthews is into high-tech applications rather than networks. He is looking forward to mobile phones having permanent broadband connections that will see the tech revolution reach new areas. 'The dramatically reducing cost of broadband and increased processing power gives a new world of commercial solutions. For me that matters because what I and the companies I own do is look for advantages for businesses - retailers, education, hotels. Things that were not possible before that add value. Being able to increase sales and cut costs. That's my domain.'

Ask whether Matthews would prefer McCain or Obama and he will say he does not like change. Brown or Cameron? 'Cameron is good,' he replies.

His relationship with the Welsh government has been equally good. It is crucial in getting the Ryder Cup sorted. His main beef is with the heritage lobby, which has prevented him from pulling down a dilapidated building next to the main Ryder Cup clubhouse because it has window frames that date back to the 17th century. But if that is the worst problem Matthews faces in the next two years, you suspect you won't find him complaining too much.

The CV

Name Sir Terence Hedley Matthews

Born 1943, Newport, south Wales

Home in Ottawa, Canada

Career Apprentice at British Telecom research. Co-founded Mitel Corporation and Newbridge Networks. Owns or has stakes in many tech firms.