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Israel Celebrates 65 Years of High-Tech Innovation

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Google Israel's online version of the Dead Sea Scrolls has revolutionized the study of this ancient text.
Google Israel’s online version of the Dead Sea Scrolls has revolutionized the study of this ancient text.
In the course of its first 65 years of existence as an independent Jewish state, Israel has established a strong record of accomplishment in numerous areas of human endeavor. One of the most outstanding of these has been the realm of modern technology, or “high-tech” as it is more commonly referred to. In addition to a significant number of start-ups, the Jewish state boasts dozens of research and development laboratories that operate under the aegis of multinational technology companies, some of which are the primary development facility for their parent corporation.

Capitalizing on the country’s milestone Yom Ha’atzmaut this year, Israel’s high-tech industry – as represented by the Israel Advanced Technologies Industry (IATI) group – put on a celebration in Tel Aviv, at which representatives of 17 multinational research and dev elopement labs discussed their innovative accomplishments. The hundreds of attendees included new Economics Minister Naftali Bennett, along with ambassadors and diplomats from an impressive 41 countries.

IATI is an umbrella coalition that facilitates communications between technology companies and industry lobbies. According to the group’s CEO, Karin Rubinstein, the multinationals play a major role in Israel’s high-tech boom, as their laboratories engender half of the country’s high-tech jobs. The Tel Aviv event featured briefings by 17 leading worldwide tech companies, including Google, Microsoft, Oracle, IBM, Yahoo and General Motors, each of which outlined key details about their employers, their laboratories’ activities, and the important contribution made by Israeli technology to the net profits of both their parent corporations and the state.

Unveiling quite noteworthy statistics, the officials of IATI pointed out that more than 250 multinational companies maintain r&d centers in Israel, 80 of which are Fortune 500 companies, with 66 % of them under the direction of American companies. In 2011, international technology companies purchased 83 Israeli start-ups; those buyouts were worth a total of $5 billion. Over the first half of 2012, fifty buyouts worth a total of $3.5 billion took place. In the period covering 2002 to 2009, productivity by multinational units in Israel increased by 121%, an annual average of 12%. This accounted for 15% of the country’s total business activity.

Rubinstein utilized this last statistic to demonstrate that – in addition to Israel helping multinationals – the country’s economy is stronger as a result of its international connections.

“The innovations demonstrated at this event by many of the multinational R&D centers in Israel,” Rubinstein asserted, “demonstrate that Israel in not only a Startup Nation, but an Innovation Nation. The challenge for us, as an industry, and for the new government, is to continue to foster the growth of this vital part of our innovation ecosystem.”

As outlined by the presentations at the event, several major technology corporations have established a deep-seated presence in Israel. The first of these, Intel, has an Israeli branch that has produced many of the parent company’s most impressive achievements. According to Gadi Singer, General Manager of Intel Israel Development Centers, these include the development of the first PC processor, the 8088 (used by IBM for its machines) in 1979 by Intel’s Haifa technology team; the Pentium MMX processor, introduced in 1997, which ended up becoming the most widely distributed processor of the 20th century, and was also developed in Haifa; development of the various generations of the Pentium laptop processors (Dothan, Banias, etc.), as well as the Centrino processor, the first laptop processor to include wi-fi; and the development (in Haifa) and production (in Kiryat Gat) of the latest Intel tech, including Thunderbolt, Sandy Bridge and Ivy Bridge.

Intel Israel has had a substantial effect on the Israeli economy – in 2012, Intel alone generated 20% of the country’s high-tech exports and 10 % of Israel’s total exports for that year. Moreover, Intel by itself generated one third of all of Israel’s exports to China. Intel Israel directly employs nearly 8,000 workers, and is indirectly responsible, through its numerous suppliers and subsidiaries, for the employment of 23,000 heads of households. In sum total, Intel employs 10% of all workers in Israel’s electronics and software industry. “And for the fifth year in a row, we have been voted the best place to work in Israel,” Singer proudly stated.

As noted by Yossi Matias, Managing Director of Google Israel’s research and development facility, Google is quite entrepreneurial, with interests that go well beyond search engine capacity. “We’re responsible for innovations like Google Suggest, Google In-Page Analytics, Youtube Annotations, and much more,” Matias related at the event. Suggest, as the name implies, offers to autocomplete the search terms as the user types in Google’s search box, for example displaying the term “Israel” after the user has typed in the i and s (saving time and providing faster results); In-Page Analytics allows the user to quantify data about their web site; and Annotations lets the user add interactive comments and text to videos.

In Matias’ view, all of these innovations may be dwarfed by Google Israel’s work in digitizing text a project that started with putting the Dead Sea Scrolls online, thus transforming it into a searchable text that enables one to see the actual scroll when conducting a search. The project, begun by a single engineer in Google’s Haifa office, has become the standard for more advanced Google digitizing projects. In fact, Google’s Paris office is implementing the system developed in Israel to digitize what is expected to eventually be thousands of historic archives and documents.

While Raffi Margaliot, General Manager of HP Software Israel, admits that Intel Israel is the Jewish state’s biggest multinational employer, HP is catching up to that status. The high-tech company has 6,000-plus employees in Israel, and it is the biggest software development group in HP’s international empire. “When I tell people I work for HP they usually tell me about their printer problems,” Margaliot said humorously.

“But HP is a lot more than printing,” especially in Israel, Margaliot took pains to note. Possibly the most prolific multinational in the country, HP maintains eight major facilities in Israel one dedicated to the country’s local business (which is quite substantial), together with seven R&D centers, which are the results of buyouts by HP of Indigo (2001), Scitex (2005), Mercury (2006), Nur (2007), and others.

“Much of HP’s business is actually driven from Israel,” said Margaliot, meaning that HP Israel is heavily involved in the technology for the “four pillars” of HP’s activities infrastructure, software, services, and solutions. “Not only were we responsible for 55% of all HP software releases last year, but we are also ‘innovation exporters.’ Groups from other HP locations around the world come to see what we have done and how we have done it. We export not only products, but innovation.”’

Marvell Technologies Group has a distinctive status as an Israel-based multinational company. Established in 1995, Marvell is a good deal younger than other semiconductor companies like Intel, but it has grown to encompass 7,500 employees 1,200 of whom, or nearly 20%, are in Israel.

Such a situation presents unique challenges for the Israeli team, explained local CEO Yossi Meyouhas. “Marvell has more than 16 international design centers located outside the U.S., and we are the biggest one,” he disclosed. “We need to keep up and on top of things going on in Canada, Europe, India, Singapore and China, with our people traveling the world to collaborate on projects and designs.”

In particular, Marvell stands out due to the “exotic” origin of its founders and directors. “The three founders and top executives of Marvell are from Indonesia,” said Meyouhas. They were raised in the world’s biggest Muslim nation and obtained their advanced education in the United States. “But their background has never affected their relationship with the Israeli operation. They are very loyal to us and very committed to what we have built in Israel,” Meyouhas stated. In fact, Marvell has been so taken with Israel that five of the nine companies the high-tech firm has acquired since 2000 have been Israeli.

According to IATI’s Rubinstein, this shows the centrality of Israel to technology. “In honor of Independence Day, I can proudly say that Israel has truly achieved tech ‘independence,’ and that we have been recognized as a center of excellence by a record number of multinational corporations, who specifically sought out Israel as a location for their R&D operations,” declared Rubinstein. “It’s a great honor for us that tens of millions of people around the world daily use the technology developed here for Intel, Google, and many other multinationals.”

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