Presented byEran Davidson
President and CEOHasso Plattner Ventures
The High-Tech Industry
And The Israeli Economy 2005
Israel – General Background
• Area: 20,770 sq km (the world’s 100th smallest country)
• Population – 6.8 million (% 0.01 of the world!)
• Gross Domestic Product (GDP)
$120 billion ($17,500 per capita – exceeding that of UK)
• GDP Growth Rate: 5.1%• Exports : $51.5 billion• Imports : $52 billion
Criteria2002200320042005
GDP (current prices in B$)104.2110.4117.6124
GDP Real Growth Rate (%)-0.7%1.3%4.3%5.1%
GDP per Capita (current prices, M$)15.916.517.317.9
GDP per Capita Growth Rate (%)-2.7%-0.5%2.5%3.2%
Exports of Goods & Services (B$)37.038.450.456.7
Imports of Goods & Services (B$)45.644.357.757
Unemployment Rate (%)10.3%10.7%10.4%9.1%
Inflation Rate ( CPI, end of year)6.5%-1.9%1.2%2.8%
Main Economic Indicators
Facts & Figures
And this is achieved in a country with the highest expenditure on defense and security issues (in
absolute numbers per capita), and not natural resources beside brain
power
Israel’s Economic Characteristics
Economic Stability
Constant Growth
Political Stability
Fast Development of Technology & Hi-Tech Industries
Human Capital
Israel’s Economy – Main Characteristics
Export Oriented Industry
• Entrepreneurial Culture
• Supportive Environment for Business
• Investment & R&D Incentives
Some interesting facts about Israel
• The Middle East has been growing date palms for centuries. The average tree is about 20 feet tall and yields about 38 pounds of dates per year
• Israel date trees are yielding 400 pounds per year and are short enough to be harvested from the ground
High tech samples from Israel
• The Cell Phone was developed in Israel by Israelis working in Motorola, which has its largest development center in Israel
• Microsoft, Intel and Cisco built their only R&D facilities outside the US in Israel
• SAP built their only R&D facilities outside the US and Germany in Israel, with 700 scientists
• The Pentium Chip in your PC was most likely produced in Israel
Israeli high tech innovations
• Voice mail technology was developed in Israel (Comverse)
• Instant Messaging technology was developed in Israel (“ICQ”, now AOL)
• Most of Windows NT and XP was developed in Israel by Microsoft Israel
• The Pentium MMX, Pentium 4 and Centrino Processors were developed in Israel
Medical developments
• Israel “Given Imaging” developed the first ingestible Video Camera, so small it fits inside a pill. Used to view the small intestine from inside, to diagnose and monitor cancer and digestive disorders.
• Israeli scientists developed the first fully computerized, no-radiation, diagnostic instrumentation to breast cancer
• A new acne treatment was developed in Israel – the Clear Light device produces a high-density, EV-light free, narrow band that causes acne bacteria to self destruct, without damaging surrounding skin
Alternative Energy, environment…
• An Israeli company was the first to develop and install a large scale solar powered and fully functional electricity generating plant, in Southern California Mojave desert.
• Israel is the only country in the world that entered the 21st century with a net gain in its number of trees, made more remarkable when considering it was achieved in an area regarded mainly desert
The Human Factor
• In absolute terms Israel has the largest number of startup companies worldwide (second after the US) – well over 3,000.
• Israel produces more scientific papers per capita than any other nation by a large margin – 109 per 10,000 people
• Israelis file more patents per capita than any other nation worldwide
• Israel has the highest ratio of University degrees to the population in the world
Jaffa Oranges vs Hi-Tech
0
2400
6800
8800
1993
1994
1995
1996
1997
1998
1999
2000
2001
exports $)millions(
CitrusHi-Tech
2002
2003
7800
4400
2,79
51,
801
3,37
51,
935
3,97
02,
030
4,63
02,
210
5,48
02,
320
6,70
02,
280
8,05
02,
330
9,13
02,
400
13,0
002,
500
12,2
502,
500
10,7
402,
300
10,8
702,
300
13,4
002,
400
14,2
002,
500
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005EST.
4,596
5,3106,000
6,840
7,800
9,980
10,380
11,530
14,75015,500
13,040
1,
2,
3 ,4,
5,6,
7,
8,
9,
10
1112
13
14
15
16
,
,,
,
,
,
,
000
000
000
000
000000
000
000
000
000
000000
000
000
000
000
0
13,170
15,800 16,700
ISRAEL ELECTRONICS & INFORMATION INDUSTRIESSALES & EXPORT (M$)
ISRAEL ELECTRONICS & INFORMATION INDUSTRIESSALES & EXPORT (M$)
DOMESTIC
EXPORT
Start-ups – The emerging economy force
Israel is one of the largest world centers for start-up enterprise, with +3,000 start-ups.
Innovative
Technology-intensive
Representing technology breakthrough
Start-Ups – The Emerging Economic Force
Industry
Israel Enjoys
the Highest Concentration
of High-Tech Companies
Outside of the Silicon Valley“
”Robert Greifeld President & CEO NASDAQ 2004
The Driving ForcesIsrael’s unique advantage
Government commitment for industrial growth, R&D
Highly skilled workforce
High concentration of VCs and capital markets
Transition from Military to Civilian Markets
I.D.F. – Entrepreneurial Spirit
Israel has the highest ratio of University degrees to the population in the world
Israel has the highest percentage in the world in PC’s per capita
40% of the recent immigrant opulation hold academic degree
Educational Levels
Source: The Global Competitiveness Report 2004-2005
Core Technology-Innovating Economies, 2003 Israel Ranks 4 Out of 103 Countries
Singapore
Canada
Germany
Finland
Sweden
Switzerland
Israel
Taiwan
Japan
USA
Facts & Figures
1
2
3
4
5
6
7
8
9
10
Doing Business In Israel
Recent M&A
Israeli Company
TechnologyAcquirerSumTime
Terayon Communication
Systems Inc. CommunicationsAris $345M 09/2005
Scitex Vision Ltd .PrintingHP $230M 08/2005
Sheer Networks Ltd CommunicationsCisco $122M 07/2005
Siliquent Technologies Inc. CommunicationsBroadcom $84M 07/2005
Medimop Medical Projects
Ltd. Life Sciences
West Pharmaceutical
Services Inc. $42M 07/2005
Medcon Telemedicine
Technology Ltd. Life Sciences
McKesson Corp. Life
Sciences $105M 06/2005
Shopping.com InterneteBay$620M 06/2005
Doing Business In Israel
Recent M&A (cont.)
Israeli Company
TechnologyAcquirerSumTime
Impulse DynamicsHealthcare
Johnson & Johnson 80M$05/2005
SiliquentSemiconductors
FablessBroadcom~85M$05/2005
TecnomatixSoftwareUGS Corp228M$04/2005
KagoorVoiceover InternetJuniper
Networks68M$03/2005
SavientBiopharmaceuticalFerring
Holding SA80M$03/2005
OREX Radiography
Medical Equipment
Kodak51M$03/2005
Native NetworksCommunicationAlcatel~50M$03/2005
Oplus Technologies
Processors for Digital Display
DevicesIntel100M$03/2005
Modem-ArtSemiconductors
FablessAgere Systems150M$02/2005
American Companies Invested in Israel
• Microsoft• Pratt & Whitney• AOL time Warner• Intel• IBM• Boeing Enterprises• Cisco Systems
• GE• Lucent• 3Com• Hewlett Packard• Merrill Lynch• Motorola• Sun Microsystems
European Companies Invested in Israel
• Siemens• DaimlerChrysler• Volvo• Cable & Wireless• Baan• Volkswagen
• Deutsche Telekom• L’Oreal• British Telecom• Danone• Ares Sereno• Unilever
Asian Companies Invested in Israel
• Samsung Electronics• Daewoo• Nomura• Hutchison Telecomm.• Nissho Iwai• LG Group• New Margine (VC)
• Sony• Toyo Ink• Hyundai• Acer Computers• Sumitomo Trading• Fuji• Honda
Technology LeadershipTechnology Leadership
“Israel has a spectacular people, great energy, unique intelligence–
an ability to solve problems”Christopher Galvin, CEO ,Motorola
THE ADVANTAGES OF DOING BUSINESS IN ISRAELTHE ADVANTAGES OF DOING BUSINESS IN ISRAEL
Doing Business In Israel
Technology Leadership
Thanks to quality education,
Israel is one of the most
advanced countries in the world.
… Israel is advancing in high-tech
even more than
other developed countries Bill Gates, CEO Microsoft, World Economic Forum, Davos, January 2000
”
“
Doing Business In Israel
Technology Leadership (cont.)
“Israel’s market is relatively large
and sophisticated, it boasts the world’s
greatest per capita number of engineers ,
scientists and doctors .
The Israeli economy is simply a reflection
of the country’s greatest natural resource -
which is the brainpower and ingenuity
of its citizens Mike Zafirovski ,COO,Motorola 2003 ”
• Outstanding Human Resources
• Global Economic Orientation
• Stability
• Modern Hi-Tech Infrastructure
• Supportive Environment
Conclusion