from the June 2007 issue

High-techie yes, prime minister no!

Ask an Israeli youngster "what do you want to be when you grow up?" it is unlikely that becoming a prime minister will be the the top of the list. By and large, Israelis show indifference to politics. They are among the world's most voracious readers of newspapers but are not prepared to enter politics. No one has done a study of Israeli politicians but it is likely is that their educational level is below that of other professionals. Perhaps the public's indifference and willingness to maintain a government, whose war goals have not been reached, plays some part. The hijacked soldiers are still in captivity and rockets are still slamming into this country.

Notwithstanding the political situation it is almost incongruous when we note that predictions point out that in next year, Israel's economic growth will exceed 5%. Moreover, foreign investment is flowing at record levels. Merger and acquisition deals are the order of the day and Israel's stock market is at record highs, attracting foreign investors.

How does one explain this dichotomy? It brings us back to profession preferences. The same youngster who does not rate politics high on his list, will place high-technology at the top. Iin Israel, military service is compulsory. It offers the capable youngster a chance to serve in elite units. They learn algorithms that later on are used in establishing young companies. The youngster who have older brothers or sisters who are already in the world of high-tech, are aware of the economic rewards. Many of today's startups are managed by second generation managers. With their accumulated experience they are more likely to succeed the second time around. "There are those who claim that the government contributed to Israel's high rate of economic growth. They're mistaken. The growth is thanks to 100,000 high-tech people. Others say that we have a brilliant government. I say it is not the government that is brilliant, but the people, said Vice Premier Shimon Peres." Israel's universities cannot keep up with the demand for technical education. The Technion - Israel's Institiute of Technology is compared to the prestigious American MIT. The Weitzmann Institute of Science, raks high among global scientific institutions. Institutes of higher learning have established research and development authorities that patent scientific work and offer them for industrial development. The income from these R&D authorities represent an ever growing percentage of the universities' income. The Government provides a broad program of grants that accelerate the development of young companies.

The program of technological incubators has attracted more than $1.0 billion in investments in young companies graduating from the incubation program. In due course the political situation will be sorted out. It is more than likely that a new Government will come into power in the not too distant future, One thing that is certain that Israel's high-tech based economy will continue to thrive.

Reprinted from the Israel High-Tech & Investment Report June 2007

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