The IT nation Israel

50% of the Israeli exports are made up of hightech products. Hightech is nowadays the most important export industry for Israel.

15% of all the equipment in data- and telecommunications sold in the world, originate in Israel.

Israel has got over 100 companies listed on the high-tech stock exchange Nasdaq. This is more than any other country outside North America. In fact, the small nation of Israel has as many companies listed on Nasdaq, as all European countries – combined!

Israel has signed free trade agreements with both the EU, EFTA, the USA and NAFTA. Consequently, Israel is the only country in the world that has free access to both the European and North American markets.

Israel is the only land outside Europe that has been accepted as a full member of the European Union research program – the so called EU Fifth Frame Program. Israel has also established similar deals in research and development with key players in Asia and North America.

When WIRED ranked the most important high-tech clusters, Israel and Sweden were the only two nations outside the USA on the top 5 list.

IT and hightech

You’re already doing more than you think! Probably, you’re seated right now in front of a computer with an Israeli processor inside. Most likely, the computer also has an operating system that benefits Israel. If you’re using ICQ, it’s originally Israeli, and still developed in Israel.

If you’re accessing the Internet via broadband, chances are big that parts of the technology needed are from Israel. Maybe in the actual technical infrastructure – or perhaps you (like many others) are using an Israeli broadband modem. More and more countries also offer wireless access – using Israeli technology.

Should you, against all odds, read this without at the same time assisting Israel, you probably came in touch with Israeli IT exports in other ways recently. For example, perhaps you’ve been shopping in a store with Israeli network technology. Israel is also aided by the fact that more and more people use cell phones, ever more frequently, for various tasks. The leading copyright protection on music CDs is Israeli. And so on.

That’s why it’s going so good! How is it then possible that a country only twice the size of Rhode Island, with just a small domestic market, become so successful?

Very high level of education
Israel has the most highly educated population in the world. About 20% of Israelis have an academic degree, and a remarkable 12% have a Master degree or more. Israel has about twice the proportion of engineers, compared to the main competitors USA and Japan (Israel has 140-150 for each 10.000 citizens; the US has 80 and Japan 75).

Favourable innovation climate
The job sector is characterized by dynamics and flexibility, with an open-mind for new ideas. Considering the fast technological development, this is thought to be a key factor.

A Nation under siege
The exposed geographical position of Israel, surrounded by the dictatorships of the Middle East, has forced the country to commitments in military high-tech. By the end of the 1960s, Israel was affected by a weapons embargo and sanctions, led by France. Paradoxical enough, this led to Israel being able to break free from its dependence on the agricultural industry, and instead establishing itself as one of the premier IT nations in the world.

Other military synergy effects
During the several years of compulsory military service, many Israeli men and women gets a deeper technical understanding. Combined with the open and flexible leadership of the Defence Forces, good conditions for entrepreneurship within the IT field are thus created. The Israeli Defence Forces encourages its officers and specialists to academic studies. Especially among the IT companies, officers from intelligence departments are overrepresented.

The advantages of language
Due to the small domestic market (Hebrew), many companies choose to directly develop in the global language English – which saves time and money. The average Israeli has a good proficiency in English.

 

Menorah 3/2003: Israels export - inte bara apelsiner, Ohad Cohen handelsattaché
   vid Israels ambassad i Stockholm.
www.israel21c.org
www.jpost.com/Editions/2000/06/13/Business/Business.8145.html
www.teldok.org/blurbs/blurb135.htm