Startup Nation
Where Breakthroughs Happen
May 2012
Source: State of Israel
Ministry of Industry, Trade & Labor
1
Multinationals
Microsoft built their first R&D facility outside the
US in Israel.
Cisco built their first R&D facility outside the US
in Israel.
Motorola’s Israel facility is the company’s largest
development center worldwide.
IBM chose Israel for its first VC investment
outside of the US
Intel has 4 R&D facilities and 2 manufacturing
centers in Israel, employing 7,000 Israelis
Google opened two R&D centers in Israel
EMC built its Israel Development Centre of
Excellence in two locations
2
R&D Centers In Israel
Haifa Region
Northern Region
Tel Aviv Region
Jerusalem
Region
Southern Region
Maps: Wikipedia
3
Intel Success Story
Developments Include:
Over 7,000 employees
4 active R&D Facilities
2 Manufacturing Centers
P. Tikva
R&D
Center
1st R&D
Center
outside
USA
opened
in Haifa
1974
Acquired
DSPC –
$1.6 Bil
Fab 18 manufacturing
center opened in KiryatGat – $1.6 Bill
1985
1st Manufacturing
center outside USA
opened in Jerusalem
1999
2001
Yakum
R&D
Center
Jerusalem
R&D
Center
Acquired
Envara –
40 Mil
Acquired
Mobilian
2004
Acquired
Oplus –
$100 Mil
2005
Yokneam
R&D
Center
2008
Fab28 m. plant
Opened in Kiryat
Gat – $3.5 Bill
4
IBM’s Success Story
Over 2000 employees in
Haifa, Rehovot, and
Jerusalem
Opens
1st Branch
In 1950
Acquired
Ubique
$15 million
Acquired
Unicorn Solutions
$7.5 million
Acquired
XIV
$300 million
Acquired
Iphrase
Technology
1950
1972
1998
2005
Opens Haifa
Development Lab, an
IBM scientific center
From 2001-2009:IBM
made 23 acquisitions
GTU - Global Technology
Unit
2006
2007
Acquired
Watchfire
Converts it to R&D
Software center
Acquired
FilesX
$80 million
2008
Acquired
Diligent
Technologies
$165 million
Acquired
Guardium
$225 million
2009
2010
Acquired
Storwize
$140 million
5
EMC’s Success Story
Over 800 employees
Center of Excellence in
2 active R&D sites
EMC starts
operation in
Israel
1991
1996
EMC Israel’s Sales
Operation is
formally established
RSA acquires
Cayota
EMC acquires
Kashya.
EMC acquires
nLayers
EMC acquires
Proactivity
1997
EMC established
its R&D center in
Kibbutz Nirim IL
2006
EMC acquires
Illuminator.
EMC acquires
Zetta Point
2007
EMC Israel
development center
is established
EMC
established
Beer-Sheva
site
2011
EIDC and RSA
consolidate to the
new Israel COE in
Herzelia
6
Centers Of Exellence Guiding Principles
• Expand geographic presence
• International investments
• New partnership models
• Innovate everywhere
• Operational excellence
• World class talent
• Product localization
• Grow government/academic
relationships
• Community involvement
• Go-to-market
7
Israel Hi-Tech Cluster
“Solid” Infrastructure
Government
Support
Incubators
Experienced
2nd time
entrepreneurs
Defense
University
Computer
Science
Students
Availability of
Technical
People &
Management
Expertise
Global
Hi-tech
Companies
Existing
Technology
Infrastructure
Leading
Academic
Institutions
& Research
Multi
National
Corp.
Entrepreneurial
Culture
Corporate
R&D
Corporate
Spin-Offs
Seasoned VC
Community
“Soft” Infrastructure
Immigration
Source: IVA
8
NASDAQ Non-US Listed Companies:
Selected Countries
90
80
70
60
50
40
30
20
10
0
Source: NASDAQ (10/2011). Analysis: Invest in Israel
9
V. Capital Raised by Israeli Hi-Tech
Companies ($USD Millions)
2500
2000
1500
1000
500
0
02'
03'
04'
05`
Israeli
06'
07'
08'
09'
10'
Foreign
Source: IVC-ONLINE
10
Israeli Breakthroughs:
Selected Examples
Given Imaging’s first ingestible video camera used to
view the small intestine and diagnose disorders
Intel’s Sandy Bridge, Core 2 Duo, and Centrino
M System’s Disk on Key and Disk on Chip flash memory
GE Healthcare’s portable cardiac ultrasound system
The Phillips Brilliance CT Scanner
IP Telephony invented by founders of Vocal Tec
Argo Medical – First commercially available upright
walking technology enabling wheelchair users to walk
and climb stairs
11
The Global Competitiveness Report
2010-2011 (World Economic Forum)
Company spending on R&D
“Israel ranks 24th in this
year’s GCI, up three
positions after having
suffered losses in
competitiveness over the
past years. The country’s
main strength remains the
excellent—and improving—
capacity for innovation
(6th), which rests not only
on highly innovative
businesses but also on the
availability of high-quality
research institutions and
is reflected in a high number
of patents.”
Utility Patents per Million
Capacity for Innovation
Quality of scientific
research institutions
World Economic Forum
The Global Competitiveness Report 2010-2011
12
The IDF Ascends to the Negev: A Vision
Leading the national effort of
bolstering the Negev by
transferring IDF bases, utililizing
elite units, and assigning quality
manpower to the Negev.
13
Israel – Current Status
The State of Israel
Population Density by Region
The majority of Israel’s
1.2 Million Residents
16% of the Population
population is located in the
centre of the country.
3 Million Residents
40% of the Population
This is also the case in terms of
Israel’s economic activity. There
are wide economic gaps between
Legend
the centre and the periphery.
1 Million Residents
This consolidation is an obstacle 14% of the Population
to sustainable growth.
Source: Central Bureau of Statistics. Data from 2008.
Israel – Current Status
The majority of Israel’s
12% of Factories and 17% of
Israeli Jobs.
population is located in the
centre of the country.
57% of Factories and
50% of Israeli Jobs
This is also the case in terms
of Israel’s economic activity.
There are wide economic gaps
between the centre and the
periphery. This consolidation
9% of Factories and
13% of Israeli Jobs
is an obstacle to sustainable
growth.
Source: Central Bureau of Statistics. Data from 2008.
Israel – Objective in 2030
A more uniform distribution of
Israel’s population and
2.4 Million Residents Constitute 25% of the
Population
economic activity – 45% of
residents and jobs are
concentrated in the Negev and
in the Galilee.
2 Million Residents Constitute
20% of the Population
Per capita income would be at
least that of central Israel.
Legend
Cycle of Output and Outcomes
Continuous
Settlement
Area
Alongside southern
Har-Hevron
Reinforcing
Education &
Health systems
In the Negev
Handling
Of the
Environment
Infrastructures
Upgrading
National
Infrastructures
In the Negev
Expanding
The scope of
Economic
activity
The IDF
Ascends
to the Negev
Privatization
Of
services
Employment
growth
Moving
High quality
Population
To the Negev
Shift of
Security
Purchases and
Projects
To the Negev
Capital
Investment
In the Negev
During
Construction
period
Summary
Israel is a center of innovation and technological excellence
Israel is a leading entrepreneurial society
Israel enjoys an excellent track record in breakthrough
discoveries and innovations
Future results are expected to improve due to the maturity of
the market
Foreign companies can cost-effectively conduct cutting-edge
research in Israel
Israel’s government and policies strongly support investment
and economic growth
18
Thank
You!
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