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.

Motorolas Israel facility is the companys 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

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

IBMs Success Story

 Over 2000 employees in  From 2001-2009:IBM
Haifa, Rehovot, and
made 23 acquisitions
Jerusalem
 GTU - Global Technology
Unit
Opens
Acquired
Ubique
$15 million

1st Branch
In 1950

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

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

EMCs Success Story

 Over 800 employees
 Center of Excellence in
2 active R&D sites
EMC starts
operation in
Israel

1991

1996

EMC Israels 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

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

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 Imagings first ingestible video camera used to
view the small intestine and diagnose disorders
Intels Sandy Bridge, Core 2 Duo, and Centrino
M Systems Disk on Key and Disk on Chip flash memory
GE Healthcares 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

years GCI, up three
positions after having
suffered losses in
competitiveness over the
past years. The countrys
main strength remains the
excellentand 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 Israels

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

Israels 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 Israels

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 Israels 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

Israels 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

Israels government and policies strongly support investment
and economic growth

18

Thank
You!
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