Startup Nation
Where Breakthroughs Happen
1
May 2012
Source: State of Israel Ministry of Industry, Trade & Labor
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.
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� 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
Haifa Region
Tel Aviv Region Jerusalem
Northern Region
R&D Centers In Israel
3
Tel Aviv Region Jerusalem Region
Southern Region
Maps: Wikipedia
Intel Success Story
� Over 7,000 employees
� 4 active R&D Facilities
� 2 Manufacturing Centers
Developments Include:
1st R&D Acquired DSPC –
AcquiredEnvara –
P. Tikva R&D
4
200820052004200119991974 1985
1st R&D Center outside USA opened in Haifa
Fab 18 manufacturing center opened in Kiryat-Gat – $1.6 Bill
1st Manufacturing center outside USA opened in Jerusalem
YakumR&DCenter
JerusalemR&DCenter
YokneamR&DCenter
Acquired Oplus –$100 Mil
DSPC –$1.6 Bil
Fab28 m. plant Opened in Kiryat Gat – $3.5 Bill
AcquiredMobilian
Envara –40 Mil
R&D Center
IBM’s Success Story
� Over 2000 employees in Haifa, Rehovot, and Jerusalem
� From 2001-2009:IBM made 23 acquisitions
� GTU - Global Technology Unit
Acquired Ubique$15 million
Opens 1st BranchIn 1950
Acquired Unicorn Solutions$7.5 million
5
2009200820072006200519981950 1972
$15 million
Opens Haifa Development Lab, an IBM scientific center
Acquired WatchfireConverts it to R&D Software center
$7.5 million
Acquired FilesX$80 million
Acquired Diligent Technologies$165 million
Acquired Guardium$225 million
Acquired XIV$300 million
AcquiredIphrase Technology
2010
Acquired Storwize$140 million
EMC’s Success Story
� Over 800 employees
� Center of Excellence in 2 active R&D sites
EMC starts operation in Israel
RSA acquires Cayota
EMC acquires Kashya.
EMC acquires Illuminator.
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1996 2011200720061997
Israel
EMC established its R&D center in Kibbutz Nirim IL
EMC Israel’s Sales Operation is formally established
EMC acquires Zetta Point
1991
EMC Israel development center is established
EMC acquires nLayers
EMC acquires Proactivity
EIDC and RSA consolidate to the new Israel COE in Herzelia
EMC established Beer-Shevasite
• Innovate everywhere
• Operational excellence
• Expand geographic presence
• International investments
• New partnership models
Centers Of Exellence Guiding Principles
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• Operational excellence
• World class talent
• Product localization
• Grow government/academic
relationships
• Community involvement
• Go-to-market
Israel Hi-Tech Cluster
GlobalHi-tech
Companies
Availability ofTechnical People &
Management
Existing
Technology Infrastructure
Experienced2nd time
entrepreneurs
University ComputerScience Students
Government Support Incubators
Defense
CorporateR&D
“Solid” Infrastructure
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CompaniesManagementExpertise
Infrastructure Students
Multi National Corp.
Seasoned VC CommunityEntrepreneurial
Culture
LeadingAcademicInstitutions & Research
CorporateSpin-Offs
Immigration“Soft” Infrastructure
Source: IVA
NASDAQ Non-US Listed Companies: Selected Countries
40
50
60
70
80
90
9
0
10
20
30
Source: NASDAQ (10/2011). Analysis: Invest in Israel
V. Capital Raised by Israeli Hi-Tech Companies ($USD Millions)
1500
2000
2500
10
0
500
1000
02' 03' 04' 05` 06' 07' 08' 09' 10'
Israeli Foreign
Source: IVC-ONLINE
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
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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
The Global Competitiveness Report 2010-2011 (World Economic Forum)
“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
Utility Patents per Million
Company spending on R&D
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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.”
World Economic ForumThe Global Competitiveness Report 2010-2011
Quality of scientific research institutions
Capacity for Innovation
Leading the national effort of
bolstering the Negev by
transferring IDF bases, utililizing
The IDF Ascends to the Negev: A Vision
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transferring IDF bases, utililizing
elite units, and assigning quality
manpower to the Negev.
Israel – Current Status
The State of IsraelPopulation Density by Region
The majority of Israel’s
population is located in the
centre of the country.
This is also the case in terms of
1.2 Million Residents 16% of the Population
3 Million Residents 40% of the Population
Source: Central Bureau of Statistics. Data from 2008.
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 is an obstacle
to sustainable growth.
1 Million Residents 14% of the Population
Legend
Israel – Current Status
12% of Factories and 17% of
Israeli Jobs.
57% of Factories and 50% of Israeli Jobs
The majority of Israel’s
population is located in the
centre of the country.
This is also the case in terms
Source: Central Bureau of Statistics. Data from 2008.
9% of Factories and 13% 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
is an obstacle to sustainable
growth.
Israel – Objective in 2030
A more uniform distribution of
Israel’s population and
economic activity – 45% of
residents and jobs are
concentrated in the Negev and
2.4 Million Residents Constitute 25% of the Population
Legend
concentrated in the Negev and
in the Galilee.
Per capita income would be at
least that of central Israel.
2 Million Residents Constitute 20% of the Population
Cycle of Output and Outcomes
The IDF
Upgrading National
InfrastructuresIn the Negev Moving
High qualityPopulation
To the Negev
ContinuousSettlement
AreaAlongside southern
Har-Hevron
Expanding The scope of
Economicactivity
ReinforcingThe IDF Ascends
to the Negev
Shift of Security
Purchases andProjects
To the Negev
Handling Of the
EnvironmentInfrastructures
ReinforcingEducation &
Health systemsIn the Negev
PrivatizationOf
services
Employmentgrowth
Capital Investment
In the NegevDuring
Constructionperiod
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
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the market
� Foreign companies can cost-effectively conduct cutting-edge research in Israel
� Israel’s government and policies strongly support investment and economic growth
Thank You!
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You!