ISRAEL 
HIGH-TECH & INVESTMENT REPORT

from the September 2013 issue


The Origins of Israel's Hi-Tech

We have often tried to identify the wellsprings of Israel's high-technology sector. Many have pointed to the experience gained while serving in the army. The famous Batalion 820 has graduated many of today's high tech leaders. Perhaps overlooked are the Israeli universities who have their own research and development departments and have produced many of today's leaders in the high tech field. Professors Aaron Ciechanover and Avram Hershko were two Nobel Prize winners who ccme from the Technion.

The Weitzmann Institute has announced that products developed by the Weizmann Institute have reached $20 billion in annual sales.. Teva's multi-billion blockbuster Copaxone originated in the work of Weitzmann scientists Professors Michael Sela and Ruth Arnon.

The government sponsored Office of the Chief Scientist annually distributes millions of dollars in support of corporate research.

Not unnoticed is the incredible Israeli drive to succeed. In America youngsters yearn to be astronauts but in Israel they want to become high-techies. There is no reason to expect for these trends to weaken. Just look at the recent spate of company exits.

Israeli tech firms Nice, Comverse and Check Point were all created by 8200 alumni or based on technology originally developed by the unit. With the emergence of consumer apps based on crunching vast amounts of information known as "big data", Israel is a decade ahead of the US and Europe - and all because of the military.

New startups such as Stylit, hope to emulate the success of Waze, a big-data-based driving app developed by former IDF cyber-squaddies and bought by Google for more than $1bn (£654m).

Big data predictive algorithms developed to prevent enemy attacks also power Any.Do, one of the world's most popular productivity apps for mobile devices. For Nissim's army buddies, 8200 is Israeli hi-tech's old school tie, opening doors to a vast group of like-minded and similarly-trained entrepreneurs. Rompr is a mobile app through which parents can share information about activities for toddlers. Chief executive Noa Levy and the three co-founders all served in elite IDF tech units.

"Trying to make sense of the patterns you find when you study a lot of data and turning that into actionable information - that's the guiding principle that we have in Rompr and also something that is very important in those technological units," she says.

"It's more the mindset than the actual technology. Then you can go out and do it on a completely different series of tasks, using the same methodology."

Until a decade ago, Unit 820 was a secret. Then it starred in the book Start-Up Nation, which chronicled Israel's emergence as a hi-tech powerhouse with more venture capital investment per person than anywhere in the world and the largest number of Nasdaq-listed companies after the US and China. Three years ago, 8200 alumni decided to emerge from the shadows and offer their expertise to other young Israeli entrepreneurs.

The result was the 8200 entrepreneurship and innovation support program (EISP), a five-month hi-tech incubator in which unit alumni volunteer to mentor early-stage startups. So far, 22 of them have received funding totalling $21m (13.5m) and employ 200 people, joining the 230,000 employees of Israel's 5,000 tech companies that earn $25bn a year - a quarter of Israel's total exports.

Nir Lempert, a reserve colonel, former deputy commander of Unit 8200 and chairman of its alumni association, says the unit handpicks the brightest teenagers in the country then trains them to solve problems in multidisciplinary teams using methods usually associated with business, not battles. They are encouraged to think differently. "The central mission of the unit is to save lives, to prevent terror and other attacks," says Lempert. "We teach our people that the mission is so important that there is no possibility of failure."

The 820 legend attracts increasing numbers of young Israelis into IDF tech units. Mamram, the main IT support unit of the IDF, now offers a six-month pre-army course at its headquarters base in a suburban street on the outskirts of Tel Aviv. From dawn into the night, recruits study programming skills, teamwork, project management and - most important - how to be creative. It's the ultimate startup boot camp. Perhaps overlooked are the Israeli universities who have their own research and development departments and have produced many of today's leaders in the high tech field. Two Nobel Prize winners have come from the Technion. The Weitzmann Institute has announced that products developed by the Weizmann Institute have $20 billion in annual sales.. Teva's multi-billion blockbuster Copaxone originated in the work of Weitzman scientists Professors Michae; Sela and Ruth Arnon.

The government sponsored Office of the Chief Scientists annually distribuites millions of dollars in support of corporate research.



Reprinted from the Israel High-Tech & Investment Report September 2013

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