Israel’s high-tech: a unique contribution to the US economy

Straight from the Jerusalem Boardroom #183, September 08, 2013

1. The San Francisco and NY-based FTV Capital invested $40MN in Israel’s Credorax, joining prior investors such as Blumberg Capital and Japan’s Mobile Internet Capital.  Blumberg Capital invested $3MN in Israel’s FeeX (Globes, August 29, 2013).

2.  According to Israel’s Technion Ne’eman Institute, IBM’s research and development centers in Israel registered 463 patents between 2006 and 2010, SandDisk – 394 patents, Intel – 321 patents, followed by Microsoft, HP, Applied Materials, Qualcomm, Samsung, Texas Instruments, Eastman Kodak, GE, Deutsche Telekom, etc. (Ha’aretz,  August 8, 2013).  Israel’s innovative competitive edge has attracted investments by leading US high tech companies, channeling the best of Israel’s research and development into the US economy, expanding the base of American research and development, employment and exports.

3.  Bowei Gai, founder of the Silicon Valley’s World Startup Report: Multinational tech companies like Intel, Microsoft, Apple are looking for breakthrough, game-changing innovations — not run-of-the-mill tech that they could do themselves or contract out to India or China. The two exceptions where the tech training is advanced, and where true, new innovation is being developed, are in the Silicon Valley, and in Israel. With no resources except brainpower and its people, Israel had no choice but to develop an innovative high-tech industry (Times of Israel, June 4, 2013).

4.  More than 250 multinational companies maintain research and development centers in Israel, 80 of which are Fortune 500 companies, with 66 % of them under the direction of American companies…. Israel is not only a Startup Nation, but an Innovation Nation. Much of HP’s business is actually driven from Israel…responsible for 55% of all HP software releases last year…. Possibly the most prolific multinational in the country, HP maintains eight major facilities in Israel one dedicated to the country’s local business (which is quite substantial), together with seven R&D centers, which are the results of buyouts by HP of Indigo (2001), Scitex (2005), Mercury (2006), Nur (2007), and others…. HP has 6,000-plus employees in Israel, and it is the biggest software development group in HP’s international empire….  [According to HP-Israel’s General Manager], ‘groups from other HP locations around the world come to see what we have done and how we have done it.’ Intel’s [R&D centers in Israel] have produced many of the parent company’s most impressive achievements.  These include the development in 1979 of the first PC processor, the 8088 (used by IBM for its machines); the Pentium MMX processor, introduced in 1997, which ended up becoming the most widely distributed processor of the 20th century; the development of the various generations of the Pentium laptop processors (Dothan, Banias, etc.), as well as the Centrino processor, the first laptop processor to include wi-fi; and the development and production of the latest Intel tech, including Thunderbolt, Sandy Bridge and Ivy Bridge….  Intel Israel directly employs nearly 8,000 workers…. Google Israel’s research and development facility is responsible for innovations like Google Suggest, Google In-Page Analytics, Youtube Annotations, and much more….  All of these innovations may be dwarfed by Google Israel’s work in digitizing text…. Marvell has more than 16 international design centers located outside the U.S., and [the one in Israel is] the biggest one…. Five of the nine companies Marvell has acquired since 2000 have been Israeli.” (NY Jewish Voice, May 29, 2013).

5.  Israel has become a world-class agriculture technology leader…. Over 200 R&D centers in Israel with a focus on agriculture…. Innovative Israeli agriculture scientists and high tech experts have fused their knowledge and experience to develop new cutting-edge agricultural technologies. These innovations are poised to transform the global agricultural landscape and address urgent needs…. Examples of innovative Israeli agri-tech include advanced precision farming techniques, water optimization, robotics and sensor driven technology, environmentally-friendly agrochemicals for crop protection and agri-biotechnology…. (http://www.ishitech.co.il/0913ar4.htm, Sept. 2013).

6.  Israel’s agricultural exports grew 9% during the first half of 2013 (Globes, August 26).