With a concentration of start-ups just behind that of Silicon Valley and an impressive pool of engineers, Israel is becoming the new standard for the high-tech industry, with a unique business model.
Internet-related activities contributed 9 billion euros (US$12.6 billion) to the Israeli economy in 2009, representing 6.5 percent of GDP, according to a report from management consultancy firm McKinsey.
The sector is bigger than the construction industry (5.4 percent of GDP) and almost as much as health (6.8 percent).
The Internet economy has also created a total of 120,000 jobs, which accounts for 4 percent of the country’s workforce, McKinsey says.
From Microsoft to Intel through Google, IBM and Philips, almost all the giants of the Internet and technology have set up important research and development centers in Israel, spawning products and systems used worldwide.
“Israel is the country with the most engineers in its population and it ranks second behind the United States in the number of companies listed on NASDAQ,” said David Kadouch, product manager at Google Israel, which opened its research and development operation in 2007 and currently has 200 employees.
“It’s really a second Silicon Valley. Besides the multinationals, all the major American investment funds are present,” he said. “The scientific community is very active, there is plenty of manpower and especially an entrepreneurial culture. There is a huge ecosystem around high tech and what is fundamental is that here we think global.”
About 500 start-ups are created every year in the country of 7.7 million people, which grew by 4.7 percent last year according to the Organisation for Economic Cooperation and Development (OECD) against an average of 2.8 percent for its member countries. The OECD forecast for Israel this year is 5.4 percent growth.
Israel’s higher education institutions, particularly the Technion, the prestigious technological university in the northern city of Haifa, must take a large share of the credit for this creativity.
“All the groups have set up subsidiaries here because of the proximity of the talents of the Technion university, where there are [people with] excellent CVs,” said Yoel Maarek, president of Yahoo Research Israel, which employs about 50 people. “I myself have studied at the school of bridge engineering in France, but when IBM hired me it was thanks to my degree from the Technion.”
The huge Technion campus comprising 19 schools for 12,000 students trained 70 percent of the country’s current engineers and 80 percent of the executives of Israeli companies listed on NASDAQ.
“Many students ... are already snapped up by large foreign companies,” said Ilan Marek, professor of chemistry at the Technion. “In the early 2000s, we broke down the barriers between the four classical branches of science, allowing the students to move between fields and have a more global vision. The key to the development of a country is to train leaders in science.”
Saul Singer, co-author with Dan Senor of the book Start-up Nation: The Story of Israel’s Economic Miracle, believes the often maverick nature of many Israelis also plays a role.
“The lack of respect for authority is typical in Israel, it’s a cultural thing, in line with start-up creating. There is no authority, it is very informal. There are two big factors, drive and determination, and taking risks. We have a very exciting business model,” Singer said.
“In Israel there is a constant struggle with all kinds of adversity,” he added. “These adversities are a source of creation and energy. Israel is a country with a purpose, a mission,” he said.
Netherlands-based semiconductor equipment supplier ASML Holding NV yesterday said that it is planning to hire an additional 1,000 people in Taiwan this year in response to growing demand from clients. ASML had previously planned to recruit 600 people this year, but that the plan has been adjusted upward, ASML vice president and ASML Taiwan general manager Grace Wang (汪佳慧) told reporters. ASML has a workforce of more than 4,500 in Taiwan, accounting for about 10 percent of its global total, Wang said. This year’s recruitment campaign would focus on adding people in the customer support, manufacturing and supply chain domains to assist ASML
UNDER MICROSCOPE: Taiwan detained three people who allegedly conspired to buy servers in Taiwan and export them using fraudulent documentation, prosecutors said Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Saturday urged Super Micro Computer Inc to tighten up on compliance after Taiwan detained three people this week for allegedly making fraudulent declarations about artificial intelligence (AI) servers made by its US partner. The development marked the nation’s first crackdown on semiconductor smuggling, which grew after the US slapped restrictions on exports of high-end chips such as Nvidia AI accelerators to China. Nvidia is “rigorous” in explaining regulations to all of its partners, Huang told reporters after arriving in Taipei. “Ultimately Super Micro has to run their own company,” he said in response to
Nvidia Corp yesterday announced that CEO Jensen Huang (黃仁勳) would attend an employee meeting in Taipei tomorrow to celebrate the launch of the company’s Taiwan headquarters project. Huang would attend a gathering at the site of Nvidia’s planned headquarters in Beitou Shilin Technology Park (北投士林科技園區), the company said in a statement. After arriving in Taiwan on Saturday last week, Huang told reporters that he plans to meet with Quanta Computer Inc (廣達) chairman Barry Lam (林百里) and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman C.C. Wei (魏哲家), and would attend the groundbreaking ceremony for Nvidia’s Taiwan headquarters tomorrow. Nvidia has not yet applied
Starlux Airlines Co (星宇航空) today unveiled a long-haul network expansion plan at a shareholders’ meeting in Taipei, including direct flights to Barcelona, Spain, and Zurich, Switzerland, as well as a service connecting Taipei, Sydney and New Zealand. Starlux is to become the first Taiwanese carrier to offer non-stop services to the two European cities, while the inaugural oceanic route is expected to expand transit opportunities within the Australia-New Zealand market, Starlux said. Flight services to Chicago, Dallas, Washington and New York are under evaluation, the airline added. Prior to the shareholders’ meeting, the airline earlier this year announced that it would be
RSS