State of the Israeli Technology Industry…and the Future
Dr. Orna BerryVenture Partner, Gemini Israel Funds
Israel’s Information and Communications Technology (ICT)
Industry
2002 ICT GDP - NIS 33 billion17% of business sector GDP.OECD highest - compared to 10-11% in
Korea and US.2003 ICT exports - US $10.1 billion.
Investment in ICT research and development is 23% of the ICT GDP.
OECD highest - compared to 16-17% in Japan and Finland.
Israeli ICT GDP grew from NIS 8.7 billion in 1990 to NIS 39 billion in 2000.
Source: CBS, 2002/ 2003
Share of ICT in Business Sector Product
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ICT production accounted for 18.4% of Israel’s business sector product in 2003
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Iceland
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Israel
Source: Ministry of Finance
Israel has one of the highest educated workforces in the world with first class education institutions
77% of the population are high school graduates 20% of the population have academic degrees
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Tech Savvy CountryBroadband
subscribers (% Households)
PC penetration (% population)
2,5 Mio BB Subscribers
South Korea
USAJapan
Germany
Taiwan Canada
China Urban
France
Spain
Belgium
Hong Kong
UK
Denmark
Sweden
Nether-lands.
Portugal
SingaporeSwitz.
Australia
Norway
Finland
Italy
Chile
Source: Alcatel January 2004
Israel
Israel: over 60% PC penetration, 50% Broadband penetration
General recognition (both major parties) that growth of Israel’s private high-tech sector
is criticalMeaningful support for qualified companies,
Role of the Government
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OCS R&D Grants ($M)
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R&D: Israel ranks highest in Civilian Research and Development
Source OECD EU Report, 2002
Collaboration
GDP ratio from start-ups: 25 percent contraction in the product of start-ups in Israel in 2003
Therefore:
• State as an economic assistant must create opportunities for collaboration with start-ups
• First candidates for collaboration: Larger players selling into Israel
• Collaborative organizations emerging…
Collaboration: IMA• Non-profit
organization aimed at enhancing the
competitive edge of the Israeli mobile industry
The Second Silicon Valley
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Future Trends
• Communications Industry Pick-up and Renewal
• Technology moves from Military to New Applications
Communications Revolution is taking Place
Communications Revolution is taking Place
Broadband Broadband everywhereeverywhere
DelayeredDelayeredand open and open networknetworkand IT platformsand IT platforms
IP networkIP network1
2
MultiMulti--access access innovative devicesinnovative devices
45
Ubiquitous wirelessUbiquitous wireless3
Service platforms
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•Physical networks / •transport
•Physical networks / •transport
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Communications as a segment of Global ICT
Source: WITSA Digital Planet Report, 2004
WiFi, WiMax, WiMedia
Broad-based uptakeA stereotype of the “Innovator’s dilemma”
Riding industry standardsFrom hot spots to hot zones
From laptops to VOIP phones
As Presented by Eric Benhamou, Telecom Israel 2004
Israel takes part in technology…
Jerusalem recently became Israel’s first city to offer WiFi access
The project was the brainchild of an Intel Israel executive and is currently offered as a free service
Many cities worldwide are currently planning their WiFi networks
…and in development
It is estimated that some 15% of all communications equipment sold around the world comes from Israel.
Source: UK Trade and Investment profile, 2003
•Telecommunications Software: over 15
companies• Data and cellular communications:
over 25 companies• Microwave and mobile
comm.: over 16 companies
• Radio and satellite communications:
over 20 companies• Wireless
Military Technology - Peaceful Applications
Given Imaging:• Brainchild of a missile
guidance expert • Rafael Development Corp
Military Technology – HLS Applications
Commodity Protection
18 Companies
Explosives &Hazardous Materials
21 Companies
Identification/Authentication
37 Companies
Anti-AircraftMissile Protection
2 Companies
Intrusion Detection
35 Companies
Tracking & Motion Control
12 Companies
Access Control
12 Companies
System Integrators
14 Companies
Command & Control
29 Companies
180 Israeli companies are developing technologies for the Home Land Security Market
Israel – From Military to Communications
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Communications startups - over 50 companiesIncluding: RedC, Lightwave, Passave, Lynx, Lambda Crossing
Evolution from Defense to Communications
New Markets
China and India will bring Risks and Rewards
• ICT industry product grew 7.5% in 2003, more moderate growth than some other
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Morgan Stanley - The China Internet Report, June 2004As Presented by Eric Benhamou, Telecom Israel 2004
The market for communications and wireless services in China is growing exponentially
Note that there are more mobile phone users in China today than the population of the US!
Summary
Israel’s people, government incentives for technological growth and collaborative
efforts among industries bring us to a point in Israel’s ICT history with great potential
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