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Israels Economic Development: The Role of InstitutionalizedTechnology1Transfer

Arnold Reisman, PhD, PE.Reisman and Associates, Shaker Heights, OH. USA.

[email protected]

February 3, 2005

ABSTRACT2

Until 1948 the year Israel gained independence from Britain, its land was mostly barren,sparsely populated, and its agriculture performed by small communes of inexperiencedfarmers. Its manufacturing was cottage industry in format. Over the years, Israeliuniversities and institutes have researched various aspects of agriculture and agriculturalengineering needs for arid and semi arid zones of the globe. Like in the US suchdevelopments were immediately transferred to the agricultural communes and to privatefarmers on a gratis basis. As a matter of government policy it has shared much of itsagricultural knowledge with developing countries. Eight years after independence, thefirst University/Institute technology transfer (TT) unit (YEDA) was established by theWeizmann Institute of Science. This organization is still operational and has amassed along track record of successful TT to the private sector. Since early 1980s all otheruniversities, medical research institutions, and government laboratories have followedsuit with their own TT organizations. Israel has over a dozen each, of high tech businessincubators and technoparks. Israels per capita exports in 2002 were 16.58 greater thenin 1970 despite the fact that its population has more than doubled during that period.Today, Israel is an R&D pioneer in software, telecommunications, biotechnology andthe life sciences. t is an undeclared nuclear power, and the worlds 5th largest exporterof advanced weapons systems. Much of that was accomplished through institutionalizedTT from abroad and from indigenous innovations at its government and universitylaboratories using the US model as reviewed in Reisman and Cytraus, (2004).

The real-world facts assembled, and insights gained from results of fairly simplestatistical analysis of hard data are pregnant with meaning for socio-economic sciencepractitioners and researchers alike. Lastly, some analyses to support future policydecisions are suggested.

Key words: Technology transfer; History of Technology Transfer, Israeli technology transfer; Israel; Intellectual property;Diffusion of technology; Development; Agricultural extension; Incubators; Technoparks,Policy,

Acknowledgments: The author is indebted to Ora Meir,Israel Central Bureau of Statistics and to staff at theWorld Bank Group

3, for supplying many of the significant data.

1Technology is broadly defined to include all intellectual property. Technology Transfer (TT) is defined toinclude all possible modalities between all possible types of players, for all possible motivations as istaxonomically delineated in Reisman (2004a).2This paper is an extract from the forthcomingEncyclopedia of Technology Transfer: Legal and Illegal, coauthored

with Aldona Cytraus.

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1. INTRODUCTION

Prior to WWI the land now known as Israel was a small part of the Ottoman Empire4. Between the

two world wars it was governed under the British Mandate dictated by the League of Nations andIsrael gained its independence in 1948. At that time its land was mostly barren, sparsely populated,

and its fledgling agriculture was performed by small settler communes of inexperienced farmers. Its

manufacturing was at best a cottage industry. Just eight years after independence, YEDA5, Israels

first University/Institute based technology transfer (TT) unitwas established by the Weitzmann

Institute of Science in 1956. This organization is still operational and has amassed a long and rich

track record of succesful TT to the private sector. As will be shown, over the years all Israeli

universities and research institutes have followed suit with their own TT organizations.

Israeli universities and institutes have researched various aspects of agriculture and agricultural

engineering needs for arid and semi arid zones of the globe. Like in the US such developments were

immediately transferred to the agricutural communes and to private farmers on a gratis basis6. As a

matter of government policy it has shared much of its agricultural knowledge with other developing

countries. Today, Israel has the highest percentage in the world of home computers per capita and is

an R&D pioneer in software7, telecommunications8, biotech9 and the life sciences10. It is an

3The World Bank Group includes the World Bank; IBRD (International Bank for Reconstruction and Development);IDA (International Development Agency); IFC (International Finance Corporation); MIGA (Multilateral GuaranteeAgency); and ICSID (International Centre for Settlement of Investment Disputes).

4 For a historical review of TT to the Ottoman Empire and subsequently to the republic of Turkey see a companionpaper, Reisman, et. al., (2004a)5 Brigadier Eliahu Ben Hur, was YEDAs founding CEO, and the authors engineering school classmate.

6 In USA TT from Land Grant universities, federal laboratories and other institutions having federalresearch grants and contracts is mandated by a series of laws. The first of these laws was signed in 1862, byPresident Abraham Lincoln, Reisman and Cytraus (2004). In Israel on the other hand, the practice predatedthe State and continues as a matter of precedent.7Most of the Windows NT and XP operating systems were developed by Microsoft-Israel. And the Pentium MMX

Chip technology was designed in Israel at Intel. Both the Pentium-4 microprocessor and the Centrino processorwere entirely designed, developed and produced in Israel.

8 The cell phone was developed at the Israeli branch of Motorola.9 On a per capita basis, Israel has the largest number of biotechnology startups.10Israel's Givun Imaging developed the first ingestible video camera. It is so small it fits inside a pill. Used

to view the small intestine from the inside, the camera helps doctors diagnose cancer and digestive disorders.

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undeclared nuclear power, and the worlds 5th largest exporter of weapons sytems11. Its

entrepreneurial energy and highly-skilled labor force, combined with the availability of venture

capital financing, government support and a developed commercial infrastructure12, resulted in the

fact that more than a third of the Fortune 100 companies are already established in Israel --as a wholly

owned subsidiary; as part of a joint venture; in partnership with, or in technology exchange with

Israeli companies And, just after the United States and Canada, Israel heads the world's nations in

NASDAQ listings. Notwithstanding its security turbulernce, during the period 1997 2003 Israels

GDP grew by 13.3% in real terms (adjusted for inflation),International Monetary Fund, (2004). And

in 2004, Israel was ranked third among 25 emerging markets in an economic survey by theEconomist

magazine. http://www.economist.com./markets

Even with an exploding population due to mass in-migration of Jews first from war torn Europe, next

from hostile environments in Muslim lands of North Africa and Iran, thereafter from India, Ethiopia,

and more significantly from countries of the former Soviet Union and at all times for Zionist reasons.

Per capita in 2002, Israel exported significantly more goods and services then did its neighbors; 13.1

times that of Syria, 10.9 times more than Lebanon, 7.1 times that of Jordan and yes, 26.9 that of

Egypt. However with the exception of Egypt, the above neighboring countries are not oil producers.

When Israel, with its highly diversivied exporting mix, is comapared with that of neighboring oil

(basically, single commodity) exporting countries the corresponding figures are; Saudi Arabia 1.6;

Oman 1.29; Bahrain 0.65; Kuwait 0.80; Libya 3.49; and Iran 11.4913.

To get a perspective Israels population grew from 3,921,700 in 1980to 6,748,100 in 2003. Over the

years the country absorbed the following number of immigrants.

Immigrants by Year of Immigration

1948-1951 688,000

1952-1959 272,000

11With an arsenal ranging from the Uzi submachine gun to attack drones and airborne early warningsystems, Israel has quietly transformed itself into one of the world's top defense exporters. High-Tech &Investment ReportJuly 2003, http://www.ishitech.co.il/0703ar3.htm

12An Israeli company was the first to develop and install a large-scale solar-powered and fully functionalelectricity generating plant, in southern California's Mojave desert.13 The above metrics are based on data supplied by the The World Bank Group, in 2004.

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1960-1969 374,000

1970-1979 346,000

1980-1989 154,000

1990-2002 1,093,000

Source: Ministry of Foreign Affairs

Sgnfcantly, Israels per capita exports in 2002 are 1.68 times greater then the corresponding figure

for 1990, 3.0 times that for 1980 and yes, 16.58 that for 197014

, Meir (2004),

http://www1.cbs.gov.il/shnaton54/st16_01.pdf. Within half of one century, Israels economy has come a

long way in its development. Institutionalized technology transfer as will be shown, played a major

role in this development.

2. THE AGRICULTURAL SECTOR

At the outset, Israels economy was molded in the ideology of Socialism. The vast bulk of its

agriculture was run by two basic models of communes the kibbutzim15 and the moshavim. In the

kibbutzim there was no private ownership of anything and all decision-making was by committee. n

the moshavim each family owned and manged its own plot of land16 but all cental services and major

equipment was communal.

All processing needs for raw agricultural products was also communal and organized on a regional

basis. Agriculture prospered. Iit satisfied most if not all domestic needs while exporting an ever

increasing volume of fruit, flowers and value-added processed foods. In 2003 Israel exported US

$714.7 million of raw (not including processed foods or packaged goods) agricultural products,

Meir, (2004). These included :

Agricultural exports

Field crops and vegetables

Vegetables, potatoes and melons

Cotton and other field crops

14 It is significant to note that this development took place despite the fact that Israels population has more thandoubled between 1970 and 2002, e.g., 1970 - 3,022,000; 2002- 6,570,000, Meir (2004),http://www1.cbs.gov.il/shnaton54/st02_01.pdf15 im at the end makes the word plural16 According to law, only one son can inherit the farm so as to keep the farm intact.

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Fruit

Citrus fruit

Avocado and other fruits

Flowers

Animals

Other agricultural exports

http://www.cbs.gov.il/fr_trade/tc3.xls ...

During the same year Israel exported $983.7 worth of value-added (processed) foods distributed as

follows:

Manufactured exports

Food products 494.7

Meat and poultry 41.7Fruit and vegetables 151.5

Dairy products and ice cream 12.2

Grain mill products 52.1

Bakeries 6.5

Manufacture of cakes, cookies & biscuits 17.7

Matzos (unleavened bread) 7.6

Chocolate, cocoa and sugar confectionery 11.2

Prepared food 11.5

Manufacture of food products n.e.c.& n.s. 177.0http://www.cbs.gov.il/fr_trade/tc3.xls...

The combined exports of value-added and raw agricultural exports add up to $1,698.4. This figure

does not include the following:

Soft and alcoholic beverages, tobacco 14.8

Wines and other alcoholic beverages 11.8

Beer and malt 0.6

Soft drinks 2.0

Food products n.e.c. 6.1


Nor does it include textiles and textile products which may or may not be based on indigenously

grown fibers.

Textiles, wearing apparel and leather 993.3

Textiles 805.6

Spinning, winding and interweaving of yarns 20.7

Weaving of fabrics; terry towels 257.1

Bedclothes and bedspreads 65.8

Other textile products 111.9

Carpets and rugs 20.3

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Knitted fabrics 7.5

Knitted wearing apparel 322.3

Wearing apparel (excl. knitted) 157.5


The same source shows that during 2003 Israels Gross Exports amounted to $31,783.3 million. Thus,

raw agricutural exports (US $714.7 million) contributed 2.24% to Gross Exports and with the value-

added products ($1,698.4 million) the contribution amounted to 5.34%. To be noted is the fact that

between 1998 and 2002 Israel exported 58% less raw cotton (down to US$27,970,000). However for

the same period its exports of pharmaceuticals shot up 72% (up to US$92,541,000) and other

medicaments shot up 143% (up to US$834,859,000). UNCTAD/WTO (2004)

2.1 Agrcultural processng

Israeli agricutural communes joined forces by consolidating purchasing of all needed inputs and

processing as well as marketing of their produce in several regional centers. Of these GRANOT LTD.

Is Israel's largest industrial agricultrural cooperative. Founded over 50 years ago, GRANOT serves as

a central purchasing and marketing agency for the Granot Group -- 41 Kibbutzim (agricultural

settlements) located along Israel's coast and central region. Thus under one roof, GRANOT

maximizes purchasing power by lowering farmers input costs, financing necessary capital and

enabling all members to profit from the use ofadvanced agricultural technology. The members

engage in the following joint activities: packaging and marketing of agricultural produce, joint

purchase of all inputs, and establishment of new factories and corporations. The end result is

maximum productivity coupled with top-quality. As an agricultural cooperative, all working

decisions are made in joint assemblies in which 41 members participate.

http://www.granot.co.il/eng/welcome.htm

2.2 The role of government and universities in agricultural extensionFrom the outset, Israel has followed the American model , [Reisman and Cytraus, (2004)], of

providing public funding to government and university laboratories for agricultural research the results

of which are quickly and feely disseminated to the private sector - to the agricutural communes and to

private farmers.

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Israels Agricultural Extension Service, (AES)17, an arm of its Ministry of Agriculture and Rural

Development (MARD), played, a vital role in the early days of agricultural development in Israel. It

provided training to theinexperienced farmers, mostly new immigrants, enabling them to attain

advanced agriculture using the limited resources at their disposal. Over the years, agriculture was

developed through a rapid transfer of practical information from research to the field and the farmer.

Work teams were set up around the country, providing a skilled and competent nationwide training

system. This training system became a central factor in agricultures professional advancement for

competitive market conditions. It promotes production of quality agricultural output both for export

and local markets and increases the ability to exploit the relative advantages of the countrys different

regions. As a result, agricultural extension and research have become an integral part of Israels

agricultural infrastructure. The AES serves public and private interests. Its primary function is to

provide professional advisory services to Israeli farmers. It also provides advisory services to the

various departments in the MARD anddetermines agro-technological norms,

http://www.agri.gov.il/.

As indicated above, Israeli universities and institutes have researched various aspects of agriculture

and agricultural engineering needs for arid and semi arid zones of the globe. Like in the US as a matter

of public policy such developments were immediately transferred on a gratis basis. Israels national

priorities for agricultural research are set every year by the Chief Scientists National Steering

Committee.

Israel is among the worlds leaders in allocation of financial resources to agricultural R&D. Some $90

million are invested annually, representing 3% of the agricultural GNP. As a result of this research

effort, Israeli agriculture has become a model for efficient use of water, land and human labor,

accompanied by record yields of high-quality products, http://www.agri.gov.il/.

Approximately 50-60% of agricultural research is carried out by AROs Volcani Center,18 - the

research arm of MARD. The ARO consists of seven professional research and support institutes:

17A form of agricultural extension transferring best practices worldwide as well as research results from itsuniversities to the Israeli farming communes. It predates the establishment of the State of Israel by at leasttwo decades.

18The Israeli counterpart of the US Department of Agriculture chief scientific research agency- theAgricultural Research Service.

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Horticulture; Field Crops; Livestock; Soil, Water and Environmental Sciences; Plant Protection;

Storage and Post-Harvest Technology; and Agricultural Engineering.

Research is also conducted at academic institutions, such as the Hebrew University of

Jerusalems Faculty of Agricultural, Food and Environmental Quality Sciences, the Weizmann

Institute of Science, the Technions Department of Agricultural Engineering, Ben-Gurion

University in the Negev, and Tel Aviv University.

Additional activities in applied research are carried out at regional R&D centers. These

were established in order to meet the unique climate, soil conditions, and other needs

of each particular region. The regional R&D centers, reflecting government policy for

developing the nations agriculture in peripheral areas of national priority, are located

mainly in the north and south of the country, in the Jordan Valley, and in the Negev and

Arava deserts, http://www.agri.gov.il/..

Most of the research is funded by public sources, and its results are open to the agricultural

community. The government and other public sources contribute approximately $50 million

annually to the ARO and the Chief Scientists Fund, whose establishment resulted in a

significant increase in agricultural R&D investment. Other international public sources contribute

some $12 million annually, including binational research funds with the USA and the Netherlands, as

well as the research funds of the EU, after Israel joined this framework.

Farmers organizations on national and regional levels contribute about $8 million

annually, collected through a levy on their production. The private business sector invests an

estimated $20 million annually. The investment is directed to products in which investors can assure

their ownership of the intellectual property rights. Most of this research is conducted by companies

that produce pesticides, fertilizers, seeds, plastics, irrigation equipment, and related products. This

agricultural input industry is also applying the results of the aforementioned public research. Private-

sector investment has increased in recent years, and its share in national research efforts has grown, for

the benefit of Israeli agriculture and expansion in export of inputs.

Israel has a total land area of 21,000 km2, of which around 20% is arable. Over half of

Israel has an arid to semi-arid climate. In Israel, where water availability is a limiting factor

for crop production, micro-irrigation (mostly drip irrigation) supplies over 75% of the

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total irrigated area. The fertigation method, of simultaneous irrigation and fertilization, is applied on

about 80% of the irrigated land. The main advantages of fertigation over irrigation combined with

broadcast or banding fertilization can be summarized as follows: remarkable increase in the efficiency

of the fertilizer application; precise application of the nutrients according to crop requirements;

convenient use of compound and ready-mix nutrient solutions, including minor elements that are

otherwise very difficult to apply accurately to the field; easier regulation and monitoring of nutrient

supply. An essential prerequisite for use of solid fertilizers in fertigation is its solubility in irrigation

water. Effective fertigation requires an understanding of the plant nutrient curve, soil and fertilizer

chemistry, and water quality. There are many fertilizer programs for each crop.19

Fertigation allows for

the adjustment of nutrient requirement during the various stages of the plants growth: rooting,

vegetative, flowering, fruit set, and maturation. Fertigation programs are developed on the basis of

laboratory analysis of soil, leaf, or other plant tissue. These are followed up by field trials conducted

by agronomists from the AES and the research institutes and passed on to the private growers.

http://www.agri.gov.il/

Israel is involved in the development, production and marketing of new varieties, which

are resistant to disease and able to meet farmers requirements, including long shelf-life,

durability under storage, high yield and adaptation to a variety of climatic conditions.

Israel is considered to be one of the leading countries in seed research. Each year, Israel

exports over $80 million worth of seeds, mainly hybrid vegetable seeds, to markets

dependent on improved yields and on quality. http://www.agri.gov.il/

Most of Israels agricultural production is highly intensive, based on small farm units which

need close advisory work and regular technical updates. Production is export-oriented

and has to comply with the severe quality requirements of the western marketplace.

2.3 Developing New Varieties

New seed varieties are developed mostly by Israels private sector seed companies and

agricultural research institutes. Research is conducted at various sites, including seed

19Israel is among the worlds largest manufacturers of potassium nitrate, a highly soluble fertilizer

that is suitable for a wide variety of plants and crops.

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companies research stations, MARDs Agricultural Research Organization (ARO), the Weizmann

Institute of Science, the Faculty of Agricultural, Food and Environmental Quality Sciences of the

Hebrew University of Jerusalem, Ben-Gurion University of the Negev, and by Bar-Ilan University.

Market demands also influence research and development. One example is interspecific

hybrid cotton which combines the advantages of two cotton species, Gossypium hirsutum

and Gossypium barbadense, and is characterized by longer and stronger fibers. This is

typically a high yield-per-area crop, requiring less water. It has been grown with excellent

results in the USA, Europe and other regions. These hybrid cotton varieties have improved

lint quality, and need 40% less irrigation when grown in marginal fields. Another example

is the introduction of a mini seedless watermelon that fits easily into the refrigerator, as

well as mini-cucumbers suitable for snacking. Agricultural research has contributed to the

development of high added-value products, such as cherry tomatoes, lycopene-rich tomatoes,

greenhouse tomatoes, a new generation of Galia type melons, greenhouse peppers, and hybrid cotton.

The Israeli seed industry is recognized for its development of hybrid seeds for fresh produce,

particularly tomatoes. A tomato hybrid renowned for its long shelf-life has been developed. The fruits

of the new varieties are attractive, solid, and enjoy a long shelf-life. A substantial number of tomato

greenhouses in Europe utilize seeds developed and produced in Israel. Recently, after the tomato

yellow leaf curl virus (TYLCV) started spreading in many regions in the world, the Israeli seed

industry was called upon to carry out extensive research on the subject, and as a result a TYLCV-

resistant tomato seed for greenhouse and open field production has been released.

Seed scientists have also developed special varieties of peppers, short-day onions, melons

and wheat, allowing the farmer to grow high quality produce. New varieties of cucumbers

produced in greenhouses have the advantage of obtaining high yields and high quality,

even during the off-season. http://www.agri.gov.il/

2.4 Production under protected conditions

Production under protected conditions has become the principle way for Israeli growers

to ensure a constant, year-round supply of high quality products, while minimizing chemical

use. This method helps to overcome obstacles imposed by adverse climatic conditions,

and a shortage of water and land. The total area covered with greenhouses, nethouses

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and walk-in tunnels increased 7.6 fold between the 1980s and 2002, , The average farm size is 4

hactares (ha) for vegetable production and 1.2 ha for flower production Greenhouses, which are capital

intensive both in construction and maintenance, are largely used for high added-value crops such as

flowers and vegetables. Due to the high investment, growers are constantly seeking methods to

streamline their operations and make them more cost-effective. The greenhouse allows the farmer to

control most production parameters including climate, fertigation, and biological control of plant

disease and insects optimizing land use and yield distribution during the growing season.

Israeli farmers successfully grow between 3.5 and 4.5 million roses per hectare in season.

An average of 400 tons of tomatoes are grown per hectare, four times the amount

harvested in open fields. In addition, plastic greenhouse structures have recently been

introduced for housing livestock, poultry, and fish. In addition to traditional greenhouse crops such as

flowers and vegetables, experiments have recently been conducted to investigate the feasibility of

growing fruit such as nectarines, peaches, loquats, grapes, and bananas under protected conditions.


2.5 The Institute for Technology and Storage of Agricultural Products

There is a growing requirement in agricultural markets for high quality produce, which

is free of pests, pathogens and pesticides. The main objective of the Institute for Technology

and Storage of Agricultural Products in the Agricultural Research Organization (ARO)

is to solve current and anticipated problems of post-harvest agriculture in Israel, in order

to enable the marketing of such high quality produce.

Many post-harvest developments are the result of requests by the local food industry

and related bodies. Others are the result of anticipated industry needs. Some of the

developments are related to the protection of both locally-produced and imported dry

agricultural products, and the preservation of fodder for livestock.

Post-harvest research concentrates on protection, preservation, treatment, processing,

storage and transportation of fresh, dried and processed foods. This research is conducted

under disciplines that include physiology, physics, chemistry and biochemistry, molecular

biology, microbiology, and entomology. http://www.agri.gov.il/

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2.6 Regional Cooperation in Pest Management

Israel carries out pest management projects with its neighbors to resolve

and alleviate regional pest control problems. A regional pest management program brings together

Egypt, Jordan, the Palestinian Authority and Israel, with USAID assistance. In recent years, a regional

Sterile Insect Technique (SIT) project for the eradication of the Mediterranean fruit fly has been

implemented in the southern part of the country. The project is coordinated by the UN Atomic Energy

Commission, and it will be expanded soon under the EASTMED program.

2.7 Agricultural Engineering

Agriculture today is largely based on research and development (R&D). Modern agriculture faces

many challenges, such as market competition, declining water availability and quality, environmental

concerns, and availability and cost of human labor. All these require ongoing innovation and close

cooperation with the scientific community. The particular challenges facing agriculture in Israel, such

as limited availability of arable land and water resources, as well as high labor costs, also act as

stimulants for increased research and development. Israel is among the worlds leaders in allocation of

financial resources to research and development. As indicated 3% of the agricultural GNP is invested

annually in R&D. As a result of this research effort, Israeli agriculture has become a model for

efficient use of water, land and human labor, accompanied by record yields of high-quality products.

Israels agricultural engineering industry is well-known for its irrigation systems. This industry also

produces specially-designed machinery for the specific conditions of Israeli agriculture, including

sophisticated sensors, greenhouse equipment, cladding materials, packaging systems, and management

software. Agricultural engineering research is mostly application oriented and maintains close

relationships with the industry for the benefit of Israeli farmers. Special sensors have been developed

to record plant growth-rate and determine growing needs. The use of these sensors results in

significant saving in water and fertilizers, while improving production and quality. Special equipment

and machinery for vineyards, which enable management of large vineyards with minimal labor, have

been developed and commercialized. These include systems for pruning, windowing, trimming,

sweeping, and spraying.

Harvesting systems for crops such as flower bulbs, potatoes and sweet potatoes, watermelons, dates,

jojoba, peanuts, and chili peppers are designed and manufactured according to the special needs of

Israeli agriculture. Special systems and methods for post-harvest operations such as separation of clods

and stones from potatoes, weighing and sorting flower bulbs and corms according to size, hot-water

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washing systems for fresh produce, accurate vibrating sizers, flower bunching systems, and length

sorting are widely used to improve product quality and reduce labor. A variety of sprayers for

dedicated applications are manufactured in Israel, designed for low volume, precise pesticide

application. Solar soil disinfestation is widely practiced, using plastic films with special properties. An

innovative technology for spray application of polymers for soil mulch purposes was developed,

providing a feasible and cost-effective alternative to plastic mulch. The polymers may be applied by

spraying the desired quantity to form a membrane film through which seedlings can emerge and later

grow on the mulch. The membrane formed is flexible and porous, keeps its integrity on the soil

surface, increases soil temperature, and reduces evaporation. In addition, mulched soil prevents

the erosion and destruction of young seedlings by sandstorms. The membrane undergoes

photo- and bio-degradation, resulting in its complete elimination without environmental

pollution and hazards. http://www.agri.gov.il/

Automatically Guided Vehicles (AGVs), which follow an electric wire carrying a signal,

are used in greenhouses for transporting crops to the packing house and returning empty

containers to the pickers. A multi-purpose transportation system, which travels along

a monorail mounted on the greenhouse structure, is used where conditions permit. Both

systems are labor saving.

2.8 Agricultural Extension Service

The AES uses computer technologies to develop training for farmers. Extension personnel receive

information and provide recommendations using digital cameras and other computer controlled

equipment. The Service holds distance learning courses using special software, the Internet, and its

website (www.shaham.moag.gov.il), which includes extensive professional information.

The AES constitutes a hub of agricultural know-how gathered from different sources: agricultural

research conducted in academic institutions in Israel and abroad; know-how created by R&D, both in

the Service itself and in regional experiment stations; and collaboration with private agricultural input

suppliers. The Service converts all this know-how into recommendations for the farmers, with the aim

of improving their competence. It has recently experienced a revolution in computer technology,

which facilitates knowhow transfer to the farmers and improves inter-and extra organizational

communications. The Service focuses on subjects which are beneficial to the general public. Examples

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of these include: Water management: Promotion of watersaving technologies, recycling water and use

of poor-quality water Integrated Pest Management (IPM): Promotion of IPM with the aim of creating

environment-friendly agriculture. In Israel, about 100,000 ha of horticulture are under an IPM regime,

reducing pesticide use by thirty to forty percent Quality agricultural production: Adaptation of

agricultural production to comply with quality-management criteria, achieving high-standard produce

that meets consumer demands, including food-safety requirements. Labor-saving technologies:

Promotion of labor-saving technologies in all agricultural branches Environment-friendly issues:

Promotion of ecologically-oriented agriculture, by recycling marginal water for irrigation and adapting

the livestock branch to environmental requirements Diversifying varieties and species: Diversification

of varieties and species for agricultural production, using innovative extension methods Professional

support in peripheral areas: Support for farmers in peripheral areas where agriculture is a key

economic factor Since the inception of Israels international agricultural cooperation program about

fifty years ago, the Agricultural Extension Service has taken an active and key role in providing

trained and skilled human resources and expertise for these activities in and for developing countries.


On a historical note:

Joint U.S.-Israel agricultural research is a major success story, dating to1909, when Aaron Aaronsohn, the discoverer of the wild ancestor ofdomestic wheat, established an extensive cooperative program between thenew Israeli pioneers and the U.S. Department of Agriculture (USDA). It thuspre-dates the State of Israel by over 40 years. In the 1950's and 1960's,informal research ties blossomed into hundreds of joint U.S.-Israelagricultural research projects, supported by blocked foreign currencyaccounts made available for that purpose under U.S. Public Law 480. Thisevolved into the current U.S.-Israel Binational Agricultural Research andDevelopment Fund (BARD, Chapter 9), founded in 1977. Since then,agricultural and scientific developments in both countries have produced

increasingly sophisticated and efficient agricultural systems, withconsiderable economic impacts.

http://www.jewishvirtuallibrary.org/jsource/biotech/seventeen.html

3. RURAL INDUSTRIALIZATION

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In the late fifties it became apparent that the agricultural communes needed sources of income to

supplement what could be gained from tilling their limited land constrained by scarcity of water.

Moreover, it was recognized that the next generation of kibbutz sons and daughters

needed additional intellectual challenges. This gave impetus to a program of rural industrialization.

The legal prohibition against subdividing farm land owned by moshav families coupled by high

fertility rates especially among immigrants from North Africa further emphasized this impetus.

Both the kibbutzim and the moshavim20 sought (not necessarily secured) plants from non labor-

intensive industries, as these communities were ideologically against using hired labor. Hence the

plants had to be fairly automated. They could not require huge investments as capital was limited,

but had to provide a high value-added product. Their technology had to be ecologically friendly

because the plants were to be located on land owned by the communes, Yaron, et al., (1983). Most

of these plants, were bought on a turn-key basis from vendors in North America and Western

Europe. In almost all instances the purchase contracts included all process and managerial know-

how. Hence, a major infusion of industrial (manufacturing) technology into the agricultural sector

from abroad. Because the moshavim had a higher degree of private ownership, many of their

families opted for smaller cottage industries/workshops. In the early 70s the author actually

observed a home-built robot assembling plumbing faucets and valves in a (moshav) family-owned

converted cowshed, and plastic garbage bags being extruded on a 24-hour basis with only one

attendant, from polyurethane pellets in a kibbutz owned plant. These were success stories. There

were also significant failures as in the case of a kibbutz plant involving chemical milling of metal

parts. In that case, the socialist mindset of the kibbutz decision-making committee fixated on the

plant without giving sufficient consideration to the product and even less to its marketability. Most

of the failures were due to above reasons. By 1979 Israeli agricultural communes had 306

industrial plants in operation, Yaron, et al., (1983) and by the mid 1980s, 40 % of all plastics

manufacturing plants in Israel were owned by kibbutzim, Don, (1988). As of 2004,the kibbutz

movement still generates 40 percent of Israels agricultural produce (about half from livestock andhalf from crops) and 10 percent of its industrial output. Annually they generate an income of $5

20 The industrialization process has been in effect, too, in the "moshav shitufi" settlements. These aresettlements in which the farm and the industrial plant, if any, are managed and operated on a communalbasis, the income is equally distributed, but the consumption is organized on an individual family basis. The case ofindustrialization in moshavimshitufim is similar to that of kibbutzim, Yaron, et al., (1983).

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billion on which about one third is made on exports. Laing, 2004. However, for a multitude of

external as well as internal reasons studied by Honing and Sheaffer (2003), the kibbutz movement

started on a down spiral in the 80s from which it has yet to recover, Getz, (2001).

4. THE INDUSTRIAL SECTOR

4.1 Technology transfer companies of universities, medical institutions and governmentagencies:

As indicated above in 1956 the Weitzmann Institute of Science launched YEDA, Israels first

technology transfer unit. All other Israeli universities ,research institutes, and some hospitals followed

suit over time with their own TT organizations. These companies manage patents and commercial

applications that emanate from research done in universities, medical institutions and government

agencies and they are listed and described in the Appendix.

5. INCUBATORS

The concept of business incubation has been successfully applied throughout the world. It can offer

better returns on investment for successful business creation, job and revenue growth with measurabledirect and indirect economic impact. As the name implies business incubators assist newly created

companies to get off to a successful start. Toward that end they typically provide appropriate business

support needed to increase the chances of the new ventures survival and growth. Typically, incubators

house several businesses under one roof or in a campus setting, and offer resident companies reduced

rents, shared services and, in many instances, formal or informal access financing. They play a

nurturing role in helping young businesses survive and grow during the start-up period when they are

most financially vulnerable so that the eventual hand-off of new technology from an inventor to an

industry user is made in the shape of an operating business enterprise not just in the form of a license

or patent. The purpose of the business must be to create -- and eventually deliver to a larger

technology user -- a "prototype business" instead of merely producing and "transferring" an unproven

"prototype product." In order to be "transferred" in this manner, an enterprise has to have successfully

utilized the technology to produce and profitably market, on a small scale at least, the product or

service application that the technology has enabled. This kind of enterprise is typically a small firm

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that is flexible, entrepreneurially driven, market-sensitive and operated by industrious innovators who

are personally hungry for success. (Willax (2004)).

Incubators are most appropriate for Pre-revenue-stage companies to early-stage companies that are

selling products or services. Business incubators are a good path to capital from angel investors, state

governments, economic-development coalitions and other investors21

. These range from the state-

assistance funds often based on matching private sector investments, which could be inexpensive, to

straight equity investments from angel investors, which could be very expensive. Funds typically

available are $25,000 and greater. Getting into an incubator can be easy or challenging. Simply being

in an incubator offers value to investors. Incubator managers know this, and as a result, many carefully

screen would-be tenants to see that they match certain criteria. The good news is that once in an

incubator, the path to angels or other investors might be more direct since they tend to hover around

easily identified centers of entrepreneurial activity,National Business Incubation Association (2004).

In its post socialism evolution Israel has recognized that enabling entrepreneurs to start and grow

businesses can create jobs and income, stimulate innovation and provide more and lower-cost choices

for consumers. Moreover a dynamic private sector can also generate tax revenues that the government

can invest in public goods. One of these public goods Israel invested in were business incubators.

Functioning incubators span the length, as there isnt much breadth, of the country.

In Israel technological incubators give fledgling entrepreneurs - immigrants and non-immigrants -

an opportunity to develop their innovative technological ideas and set up new businesses in order to

commercialize them. The incubator program is applied in all parts of the country, under the

guidance and with the support of MARDs Office of the Chief Scientist. The program was first

implemented in 1991, when immigration from the former Soviet Union had reached its peak.

www.incubators.org.il. No fewer than 26 technological business incubators were operational circa

2004, http://www.science.co.il/Technology-Incubators.asp

According to its website (http://www.icn.co.il/ ) the Initiative Center of the Negev (ICN) is the

ideal launch pad for entrepreneurs and inventors looking to develop innovative products with

substantial export potential.

21On a per capita basis, Israel has the largest number of biotech startups.

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ICN specializes in business enterprise development, providing an instructive and supportive

framework to entrepreneurs at the start-up stage of business development. Working together with

ICN's staff, committee members, business mentors and consultants, ICN management provides the

tools and the know-how to help entrepreneurs progress from start-ups to stand alone companies.

The incubation process considerably enhances the prospects of raising the financial investment

needed and finding strategic partners, aiding entrepreneurs to emerge from the incubator with a

freestanding, financially viable business. Incubators help reduce the failure rate of early stage

companies by providing essential training, support and assistance during its initial stages.

Like most of the others the Incubator is mainly supported by MARD. ICN is Israel's oldest and

most experienced technological incubator. ICN's success rate is testimony to the commitment of its

management and committee members: between 50 - 60 percent of ICN graduates have obtained

further investment. ICN is located in Beersheva, the capital of the Negev (desert) and Israel's fourth

largest city, some 100 km (65 miles) southeast of Tel Aviv.

ICN's relationships with Ben Gurion University and Soroka Medical Center provide entrepreneurs

with access to some of Israel's greatest minds and advanced laboratory facilities and libraries. In

turn, ICN provides the University's faculty, staff and students with a wonderful environment for

commercializing their ideas.

Moreover, an Incubator Partnership Agreement between ICN and University City Science Center in

Philadelphia, Pennsylvania, the largest university related science and technology research park in

the U.S., stimulates joint ventures, collaboration and technology exchanges between ICN

companies and the University City affiliates, providing resources and opportunities that help ICN

companies compete in global markets.

In order to become an Incubator tenant, the R&D project must be based on an innovative,

sophisticated, generic technological idea that aims to develop a product(s) with export marketing

potential. The majority of the product must be manufactured in Israel.

The Office of the Chief Scientist provides up to NIS 600,000 (approx. $150,000) per year, i.e., up

to NIS 1,200,000 (approx. $300,000) for two years. This amounts to 85 percent of the budget. In

order to receive the full grant, entrepreneurs must raise at least $50,000 over two years. However, it

is advisable to raise about $100,000, in order to avoid cash flow problems. The State must be

reimbursed for funds granted. This payback is accomplished through royalties on sales.

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MEYTAV Technological Enterprises Innovation Center Ltd., the northernmost Incubator is located

in Kiryat Shmona, just below the border with Lebanon. It was founded by the Municipality of

Kiryat Shmona and the Regional Council of Upper Galilee.

In July 2003, MEYTAV was one of a select group of incubators to be privatized. Some

of Israel's leading life science investors, including major VC funds (Pitango, Giza), Hadassah

Hospital's commercialization arm and Teva Pharmaceuticals - a world leader in generic

pharmaceuticals have together acquired 24% of the incubator. Other shareholders include private

investor groups and entities representing the municipality of Kiryat Shmona and other regional

interests. MEYTAV encourages and supports projects based on technological innovation,

http://www.incubators.org.il/h22000.htm.

6. TECHNOPARKS

The First Science Park in Israel, Kiryat Weizmann, was established on the initiative of the

Weizmann Institute just north of the Institute campus, in Nes Ziona. It is home to numerous

companies implementing Weizmann research. The Institute was later involved in the construction

of yet another park, Tamar Rabin Science Park in Rehovot, adjacent to Kiryat Weizmann. Fifteen

Hi-Tech Industry Parks were operational in Israel circa 2004,

http://www.science.co.il/Technology-Parks.asp.

6.1 Privately established technoparks

Steff Wertheimer a maverick entrepreneur22 and former member of the Knesset (Parliament) owns

seven industrial parks across Israel. One of these is in the Galilee and includes a permanent exhibition

of Israeli art in its sculpture gardens. http://www.gemsinisrael.com/e_article000047913.htm.

The mayor of Eilat, Israels southernmost city, asked Wertheimer to set up an industrial park in Eilat,

as part of a plan to diversify the citys job base beyond tourism and hotels, in order to attract educated

and wealthy residents. "Building an advanced industrial park will reverse Eilat's negative migration.

Many residents have left since the city's duty-free status was abolished." The industrial park will be

located near the Jordanian border, Globes (2004).

22 Starting with Iscar Metals he created and grew a major industrial conglomerate at a time when all ofIsraels heavy industry was government and or trade-union owned.

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Wertheimers global vision is demonstrated by the three way partnership between a regional

government body, a private university, and Wertheimer as investor and senior advisor, establishing a

technopark in vicinity of Istanbul, Turkey, http://www.gosb.com.tr/tr/news.aspx?news_id=346 (in

Turkish).

7. THE INDUSTRIAL HIGH TECH SECTOR

7.1 Defense sector

Fifty years after having to scrounge the worlds scrap yards, and facing a number of embargos by

France and the UK against it taking delivery of paid for weapons systems, starting in the mid

1980s, Israel has evolved to be a supplier of indigenously designed and produced high-tech systems

to the militaries of developed nations including that of the United States of America. They did this

by discarding country specific policies that result in constraints on work practices and on the

application of better production methods at the firm level, and by creat[ing] new ideas to increase

their standard of living spurred on by having to defend themselves Parente and Prescott (2000).

Over time some of its major R&D efforts though technologically successful had to be cancelled

because of political pressures from outside the United States. Case in point is the Lavi

fighter/bomber project designed and built by Israel Aircraft Industries (IAI) cancelled in 1987, andpotential sale of the Arrow anti ballistic weapons system to India in 2004. However knowledge

gained from the Lavi program was not lost. It is being incorporated in upgrading its purchased

aircraft and into the Chinese designed (point defensive warfare aircraft) J-10 Jian,with many of the

design elements emanating from the IAI and several Israeli subcontracting R&D firms.

http://www.supremeruler2010.com/srmil_equipment_jet.htm

IAI began in 1933 as a small machine shop, later catering to the maintenanceand upgrading of the motley collection of aircraft acquired during the War of

Independence. It continued to specialize in the overhaul and retrofitting ofthe whole range of aircraft in the air force inventory. Israel AircraftIndustries was established in 1953 as Bedek Aviation Company, five yearsafter the establishment of the State of Israel. Until the cancellation of theLavi project in 1987, IAI had been entrusted with the development of theadvanced fighter aircraft. Israel Aircraft Industries' scope has expanded toinclude technologically sophisticated solutions for battle in the air, at sea oron land.

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With 14,000 skilled workers, IAI is by far the country's biggest industrialemployer. A further 15,000 Israeli jobs are indirectly dependent on thecompany. And its $1.6 billion in military and commercial sales abroad makeit the biggest exporter. http://www.globalsecurity.org/military/world/israel/iai.htm

Moshe Ahrens, American born and educated aeronautical engineer rose from IAIs, R&D ranks to

become its CEO. After serving in that capacity during a period of the companys major expansion

in scope, he went on to be Israels ambassador to the US (1982, 1983), Defense Minister (1983-

1984, 1990-1992), and Foreign Minister (1988-1990). He served in Israels cabinet during its

Thacher revolution of industrial privatization and monetary liberalization.

[Ahrens] had also emphasized the development of weapons systems to givethe IDF [Israel Defence Forces] the quality edge it needed to overcome thenumerical superiority of its adversaries. Many of the IDF weapons wereacquired in the United States, but their advantage was rapidly disappearing as

the United States began to sell these same weapons to Arab countries. Israelnow had to rely on its own defense industry, which in a number of areas hadsucceeded in developing technology not available anywhere else.Ahrens(1995, 141)

Since 1999, Israeli arms sales have skyrocketed, particularly to Turkey, India and China.The

United States, which had blocked sales of Phalcon to both India and China, gave Israel the go-

ahead last month to sign the Airbourne Warning and Control System (AWACS) deal with New

Delhi. The Phalcon is an Israeli-developed long-range radar warning and control system carried in a

Russian Ilyushin-76 cargo plane. The deal is worth around a billion US dollars.http://www.mtholyoke.edu/org/cwp/projects/us_armscontrol/departments_lock_horns.htmand Clyde R. Mark,

"Israel: U.S. Foreign Assistance," Congressional Research Service, (October 3, 2003);

However, as indicated and the following quote shows, Israel does not have a free hand to sell its

indigenously designed and manufactured defense products to whomever it chooses. The

comments Wednesday by State Councilor Tang Jiaxuan, China's senior foreign policy official, were

the strongest indication to date of Chinese displeasure over American efforts to prevent China fromregaining possession of Harpy' unmanned drone aircraft. The Israeli-manufactured drones

sold to China in the early 1990s and returned to Israel earlier this [2004] year for technological

upgrading. The deal is reportedly worth tens of millions of dollars. The drones are designed to

destroy radar stations and anti-aircraft batteries. Last week, an Israeli military official said the

United States has demanded Israel confiscate the drones, fearing that they could upset the military

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balance between China and Taiwan. PETER ENAV (2004)China Official Slams U.S. on Weapons Deal The

Associated Press. 12/30/04

7.2 High-tech sector

Uzia Galil an Israeli innovator/entrepreneur and widely considered the founding father of Israels

high tech industry Blackburn (2004). With a B.Sc. from the Technion and an M.Sc. in Electrical

Engineering from Purdue he is currently, Chairman of the Board, President & CEO of Uzia

Initiatives and Management, Ltd. (Israel)- a company which he founded to provide management

support to entrepreneurs and growing technology companies by leveraging the experience and

global network of its management team and worldwide partners. Until November 1999, Mr. Galil

served as Chairman and Chief Executive Officer of Elron Electronic Industries Ltd., which he

founded in 1962, and was its President and CEO since its inception. http://www.isro-

press.net/Premii/uzia.engl.htm When Galil founded Elron in 1962 with $160,000 in financing,

there was virtually no high tech industry to speak of, instead Israels economy heavily relied on

oranges and defense. Galil however forged ahead, taking research from academia and turning it into

his own high tech empire, which now includes Elbit Systems, Given Imaging,23 Partner

Communications24, Zoran25, Orbotech26, Net Manage, and ChipX27. Blackburn (2004). What is

most impressive is that each of these companies can be found listed on the NASDAQ exchange.

In 1965 an Israeli kibbutz established the Netafim company to manufacture and market its invention

for drip irrigation systems in Israel,

23 An example of their recent products is the Given Diagnostic System a first-line tool in the detection of abnormalitiesof the small bowel. To date over 145,000 patients worldwide have experienced the advantages of painless and effectivePillCam Capsule Endoscopy.24 NSC, one of its subsidiaries offers solutions enabling a wide range of voice activated applications. Its AutomaticSpeech Recognition (ASR) boards, enable application developers and system integrators to provide robust voice-driven

services to telecom operators and service providers at a low cost.25 Zoran is a leading provider of digital solutions for applications in the growing digital entertainment and digitalimaging markets.

26 Orbotech develops and produces the world's most advanced hi-tech equipment for inspecting and imaging circuitboards and display panels - the backbones of today's cutting-edge electronic products.Of Orbotech's approximately1,400 employees, more than a quarter are scientists and engineers, who integrate their multi-disciplinary knowledge,talents and skills in numerous disciplines including software, algorithms, physics, optics, electronics and precisionmechanics to develop and provide hi-tech solutions and technologies designed to meet customers' long-term needs.27ChipX is a leading manufacturer of late-stage programmable Structured ASICs (Application Specific Integrated

Circuits).

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where dry desert conditions and a limited water supply created theneed for an environmentally-friendly watering system to grow crops.Later the process spread to the U.S. where it proved crucial in the dry,desert southwest or in landscape areas where traditional sprinklershave not proven effective. Today Netafim USA dripperline is used for

on-surface or subsurface drip irrigation projects across America byhomeowners, landscapers, growers, architects, and contractors.http://www.netafimusa.com/

Moreover, drip irrigation systems are used worldwide including all of Israels neighbor countries.

With over 500 IAI designed and built executive jets in operation worldwide, on January 26, 2005,

IAI rolled out for the world to see the G150 model of the Gulfstream to be marketed by the

Gulfstream (Dallas, Texas) subsidiary of the General Dynamics Corporation.

Gulfstream Aerospace on Jan. 18 rolled out the first copy of its G150 businessjet from the Israel Aircraft Industries (IAI) manufacturing facility in Tel Aviv,Israel. Attending the ceremony were certifying authorities, supplierrepresentatives and members of the G150's development team. Firstannounced in September 2002, the G150 remains on schedule for customerdeliveries in the third quarter of 2006. As successive copies of the G150 arebuilt and certified by both the FAA and the Israel Civil Aviation Authority,examples will be flown to Gulfstream's Dallas facility for the final phase of itsmanufacturing. "Our Gulfstream team in Israel has done an excellent jobmanaging the design and build of the first G150," said Bryan Moss, presidentof Gulfstream. "They've sacrificed time away from their families to ensure

this project is on budget and on schedule." Moshe Keret, president and chiefexecutive officer of Israel Aircraft Industries, added, "Once again, we haveproven [IAI's] technological capabilities, both in engineering and inmanufacturing in this exclusive branch of our industry." The G150 is anentirely new cabin design for Gulfstream, with a cabin height three inchesshorter than the company's large-cabin G450 and G550 series aircraft. TheG150 can accommodate six to eight passengers in a choice of several cabinconfigurations and is powered by two Honeywell 731-40AR engines. TheG150's planned top speed is Mach .85, with a ceiling of FL450. At its long-range cruise speed of Mach .75, the G150 should fly four passengers nonstopup to 2700 nautical miles, the equivalent of Los Angeles to New York,

London to Moscow, or Rio de Janeiro to Santiago. Gulfstream has developeda full-size replica of the G150 cabin and cockpit to take on the road to citiesthroughout the United States.

Also:

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Check Point's Gil Shwed Named a Top Technology Innovator byCMP's VARBusiness Magazine

Internal and Web Security Solutions Lauded as One of This Year's HottestTechnologies

REDWOOD CITY, Calif., Dec. 22, 2004 - Check Point SoftwareTechnologies (NASDAQ: CHKP), the worldwide leader in securing theInternet, today announced that its chairman and CEO, Gil Shwed, has beenrecognized by the editors of CMP Media's VARBusiness as one of NorthAmerica's "Top 50 Technology Innovators," a list of leaders in theinformation-technology field who exemplify technological creativity coupledwith keen business acumen. Shwed was honored in the special Dec. 13, 2004"State of Technology" issue of the biweekly magazine that provides strategicinsight to technology integratorsWe started Check Point in 1993 with thevision of creating the industry's most secure, powerful and easy-to-use networksecurity solutions, and I am very honored to be named one of VARBusiness'

Top 50 Technology Innovators," said Gil Shwed, chairman and CEO for CheckPoint Software Technologies. "As a company that is solely focused on ITsecurity, we are constantly developing new technologies to combat the latestsecurity threats. Customers all over the world have come to rely on CheckPoint's leading security solutions over the last decade, and we now secure 100percent of Fortune 100 companies."

http://www.checkpoint.com/press/2004/var_gil_shwed122204.html

The cofounder, CEO and chairman of Check Point Software Technologies isone of network security's most successful, influential and enigmatic leaders, a

casually dressed billionaire who ranks among Israel's richest men. He runs apublicly traded company that managed a decade of exceptional profit marginsdespite producing only two core products: FireWall-1 and VPN-1. Thatsoftware has been installed at more than 300,000 sites globally, includingalmost every Fortune 500 company--a feat done with a mere 1,200 employeesworldwide. Shwed is very bright, the son of a systems analyst father and aschoolteacher mother. He attended high school and college simultaneously inJerusalem, but joined the Israeli army before earning a degree.

http://infosecuritymag.techtarget.com/2003/may/profile.shtml

And:

Intel, the worlds largest maker of computer chips, unveiled its latesttechnology last Wednesday, an upgraded version of its Centrino chipsetthatlike its predecessor, was conceived in Intels development center in Haifa.The product which was code-named Sonoma prior to the launch, features newgraphics and audio capabilities, faster processing and greater security features.Intel forecasts that the chipset would be available on more than 150 different

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computer models by years end. Computer maker Dell has already begunadvertising new laptops equipped with the new technology.Intel has sold more than $ 5 billion worth of its Centrino chipsets since theywere introduced in March 2003. The technology designed, for laptopcomputers, came with enhanced wireless Internet connectivity that helped push

the WiFi standard to the top of the industry agenda, as well as longer batterylife. Anonymous (2005)

Clearly much more can be said about Israels high tech sector.

8. INTERNATIONAL TT ACTIVITIES:

At all times Israeli academics and other TT professionals work with their international counterparts

on matters of TT. For instance on June 13-14, 2004, a workshop titled From Research to

Technology Transfer: Models and Best Practices was held at the Tel Aviv University campus. The

workshop was organized jointly by Tel Aviv University, its technology transfer company, Ramot,

and the Embassies of France and Germany. Experts from France, Germany and Israel reviewed

various measures for innovation policy, and presented successful case-studies of current practices

of technology transfer in their respective countries. The workshop offered a platform for discussing

the efficiency of various measures and procedures initiated by governments, academia and industry

in order to enhance technology transfer in various fields (e.g. Biotechnology, Optics,

Microelectronics, Nanotechnology, among others. The speakers included representatives from

governmental institutions, academia and industry from each of the three countries,

http://www2.tau.ac.il/EU/Technology%20Transfert%20Workshop.pdf

Since the late 1950s, Israel has been sharing its agricultural expertise with scores of

countries. A little more than a decade ago, in the midst of one of the periodic cycles

of drought and famine that bring Africa to the headlines, researchers of the Institute for

Agriculture and Applied Biology, a unit of Ben-Gurion University of the Negev, asked

themselves how to promote the approach they had used in efforts to green the desert

in Israel. This approach centers on the wide-scale introduction, domestication and

evaluation of plant species from around the world, in order to determine which, if any,

could play a role given Israel's agroecological situation. The concrete result of the brain-storming

session was the initiation of the International

Program for Arid Land Crops, more commonly known as IPALAC. The programs goal

is to share this approach with nations who might benefit from it. IPALAC was officially

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recognized by UNESCO, which began funding its activities in 1996. During the early

stages, activities were divided essentially into two: the organization of workshops in Israel,

where the impact of the introduction and domestication work could be viewed firsthand,

and regional workshops in Africa, where specific ideas for new crop-based development

might be undertaken. http://www.agri.gov.il/

Alongside those in the USA, several Israeli institutions are prominent members of the International

Arid Lands Consortium (IALC). The IALC is an independent nonprofit organization dedicated to

exploring the problems and solutions unique to arid and semiarid regions. IALC promotes

cooperative research and practical application of new knowledge to develop sustainable ecological

practices. The IALC member institutions28

share a mission to enable people of arid lands to improve

the quality of life for future generations, http://ag.arizona.edu/OALS/IALC/Home.html.

In the past ten years, with major funding from the Forest Service of USDA, (Hoekstra (2004)),

IALC addressed some of the most important issues related to development and conservation of

natural resources under the different climatic conditions of the southwestern United States, the

Middle East, and Chile. Scientists from these countries have collaborated in research and

development and demonstration projects and exchanged views and scientific visits with the ultimate

objective of making needed information available for better management of resources. To further

enhance dissemination of information and data generated for research and demonstration activities toall stakeholders, the IALC supported outreach activities through publications, conferences, and

training courses, http://ag.arizona.edu/OALS/IALC/review.html. Thus technology transfer is the very

essence of IALC, and the Israeli contributions to this mission are well documented in Hoekstra and

Shachak (1999).

8.1 The Israel Export & International Cooperation Institute (IEICI)

The IEICI plays a key role in promoting cooperation between foreign and Israeli agrobusiness

executives and companies. The Institute organizes participation of Israeli companies in exhibitions in

28The University of Arizona, Desert Research Institute - Nevada, Higher Council for Science & Technology -Jordan, The University of Illinois, Jewish National Fund, Ministry of Agriculture and Land Reclamation - EgyptNew Mexico State University, South Dakota State University, Texas A&M University-Kingsville

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other countries, arranges business delegations to foreign markets, and distributes a wide range of

information and publications on business-scene, investment and trade opportunities.

Israeli long-term expert assignments at the project site and short-term consultancies, have

been established in different countries, including China, Costa Rica, Ecuador, Egypt, El Salvador,

Eritrea, Ethiopia, Hungary, India, Jordan, Kazakhstan, Kenya, Kyrgyzstan, Malawi, the Philippines,

Poland, Romania, Senegal, Swaziland, Thailand, Uzbekistan, and others.

The demonstration farm that has been established in China utilizes Israeli agritechnologies,

combined with know-how and inputs to enhance production quality and market-driven development.

The farm also serves as a center where host-country nationals can be trained and experience practical

and professional aspects of the farm operations. In Africa, demonstration-cum-training farms have

been established in arid areas in Kenya, Eritrea, Senegal and Zimbabwe to demonstrate the

advantages of appropriate technologies, focusing on irrigation, crop diversification, improved

production practices and agribusiness development at field level. In Latin America, projects include

livestock and dairy development, as well as special projects to assist in the rehabilitation of rural

areas devastated by natural disasters such as hurricanes and earthquakes. The main effort is centered

on the transfer of advanced technology for water conservation and efficiency, introduction of new

crops and varieties, and enhancement of public and private development initiatives. Israel has also

initiated projects to combat desertification and develop arid-zone agriculture in West Africa, Indias

Rajasthan desert area, Chinas Gansu and Xianjiang provinces, northern Chile and neighboring

Middle East countries. Israel is involved in agro-ecological projects at reducing the use of chemicals

through Integrated Pest Management (IPM) systems, and controlling depletion of the ozone layer by

developing methyl-bromide alternatives. http://www.agri.gov.il/

Courses and seminars have been held on this subject in several countries in Africa, Latin America,

Russia, CIS and Asia. Israels international cooperation in agriculture is conducted in conjunction and

co-financing with other donor countries, and CINADCO is seeking

to expand networking with other international organizations to overcome world development

problems. http://www.agri.gov.il/

The Research Division in CINADCO is engaged in coordination of research cooperation programs

with developing countries. The activities are carried out with the participation of experts and

scientists from the host countries. Desert Agriculture in Israel

More than sixty per cent of Israel is subject to semi-arid and arid conditions and may

be classified as desert. Nevertheless, since the establishment of the State in 1948, these

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areas have played an important role in the country's agricultural and economic growth

due to the developing of innovative farming methods and techniques suitable for arid

zone agriculture. At present, more than forty per cent of the country's greenhouse- and

open field-grown vegetables and field crops and ninety per cent of the exported melons

come from the Arava and Negev desert. In the arid south, fruits, including dates, and

citrus are also among the leading crops, cover 12,600 hectares (2001 figures) . In addition,

recent advances have been made with greenhouse and open-field flowers, grapes for wine, olives for

oil, beef cattle, ostriches for meat, and aquaculture.

As elsewhere in Israel, close cooperation exists between the farming and research communities in the

south. The fruits of this cooperation may be seen in the resulting yields. Some examples: New citrus

varieties produce between 50-100% higher yields than traditional ones; olive trees drip irrigated with

brackish water achieve per-hectare oil yields which are six times higher than in the traditional rain fed

groves in other parts of the country; fish farmers in the Arava and Negev expect to produce 2,000

tons annually in the coming years; and beef cattle are fed fodder and ostriches consume alfalfa

grown with recycled brackish water obtained from fish cultivation, http://www.agri.gov.il/

Ben A. Wilcox, in a June 30, 1998 Reported to his employer the US Office of Naval Research on:

Materials Research in Israel (Haifa, Rehovot, Tel Aviv)

This newsletter summarizes research in structural and functional materialsat five Israeli institutions as determined by site visits over the period March15-19, 1998. I had discussions with scientists from universities, a defenseindustry and the Ministry of Defence (MOD). The overall quality of bothbasic and applied research was very high, the laboratories were wellequipped and the researchers were talented and energetic. They havenumerous collaborators in the U.S. and Europe. I saw a number of veryinteresting research efforts: quasicrystalline alloy coatings with promisingtribological properties at the Technion, cathodic electrosynthesis ofnanostructure ceramics at the Israel Institute of Metals, and polymer-matrixcomposites reinforced with carbon nanotubes at the Weizmann Institute.

RAFAEL, a defense industry, produces a variety of products fromadvanced materials: composites (PMC) for aerostructures, radomes,ceramic armor, thermal batteries. The MOD plays a significant role insupporting materials research at universities, institutes and industriallaboratories.

He concludes by saying:

I was very impressed with the quality of materials research at thelaboratories that I visited. It ranges all the way from product oriented

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research in industry to excellent basic and applied research in universitiesand institutes. I was especially impressed by the attention being given tofinding applications for "new" materials, e.g. quasicrystals as wear resistantcoatings, carbon nanotube reinforced polymers for high strengthcomposites and hollow nanoparticles of tungsten disulfide as a solid

lubricant The scientists have many collaborations in the U.S. and Europe,and I think that this will continue and even increase. MOD materialspersonnel interact with USAF materials researchers, but not much withthose from the U.S. Navy. I would urge Navy materials scientists who visitIsrael to contact the MOD and exchange information about pertinentresearch activities.

Wilcox, (1998)

9. CROSS-NATIONAL COMPARISONS

The prestigious World Economic Forum (Geneva) and theInstitute for Management Development

(Lausanne) have jointly developed, and continue to periodically update a competitiveness ranking

for selected countries, the World Competitiveness Index (WCI). Israel ranked 16th in 2001,

ahead of Belgium (17), Taiwan (18) UK(19) and Norway (20), and, for 2002-2003, Israel was

listed as 7th on its Technology Index Rank and 18th on its Quality of National Business

Environment rating. In its 2003-2004 report Israel was ranked 20th

on the Growth

Competitiveness Index ahead of Spain (23), France (26), Belgium (27), Greece (35), and Italy

(41), www.weforum.org.gcp. Using 32 (objective) published socio-economic, demographic

metrics, and parametric (statistical) methods Ulengin et al, (2002), duplicated the more

subjectively derived WCI. She then grouped countries according to rankings received. Israel fell in

the second group along with Denmark, Spain, Sweden, Austria, Germany, Belgium, and France.

When compared to Israels bordering countries the following World Bank Group, (2004)statistics

speak for themselves:

GDP per capita for 2002 (in 1995 constant dollars)Israel 16,676Turkey 2,760

Jordan 1,660Egypt 1,250Lebanon 2,868Syria 832

Exports of goods and services for 2002 (in current US $)Turkey 54,607,998,976Israel 38,572,965,888

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Jordan 4,282,284,288Egypt 14,514,258,944Lebanon 2,399,460,352Syria 7,635,838,464West Bank and Gaza 417, 695,232

Exports of goods and services per capita for 2002 (in current US $)29Israel 5,874.6Jordan 828.1Lebanon 540.2Syria 449.5Egypt 218.0West Bank and Gaza 129.3Turkey 78.4

Comparing the above exports of goods and services per capita with those of developed countries we

find for: Japan 3500; United States 3520; Korea 4003; Spain 4646; Italy 5531; France 6,512; UK

6823; Germany 8,536 Thus on aper capita basis, Israels export of goods and services have

surpassed that of Japan, the US, Korea, Spain, and Italy and are not significantly below that of

France. In fact, when the 158 countries for which the World Bankhas a complete set of data are rank

ordered on the basis ofper-capitaexports of goods and services Israel ranked 22nd is only one

removed from the 20th place held by France. For rank ordering of all 158 countries see the

Appendix30.

The recent growth of its industrial exports notwithstanding, Israel is still in the major leagues when it

comes to exports of raw agricultural products. As shown in the Appendix it ranks 25th among the

above 158 nations not far behind that of USA 21st , and that of France 22nd . More specifically,

per capita dollar-wise, Israel exports 0.81 that of the US and 0.84 that of France. As the Appendix

shows the distribution of this metric across the 84 countries with full data, is very highly skewed.

The mean of $63.7 per person falls between the 17th

which is Germany and 18th

which is Slovenia.

Israel's $100 billion economy is larger than all of its immediate neighbors combined. Much of the fuel

for its economic development comes from the R&D performed at Israels universities and research

29 Based on data supplied by The World Bank Group, in 2004.30These findings are pregnant with meaning. 20 countries fall below 100 $ worth of exports per capita and73 or 46% fall below $500. Among the latter are; Philippines, Peru, Brazil, Pakistan and India as well as oilexporting Nigeria.

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laboratories and effectively transferred to the private sector. The http://www.science.co.il/website is

a good single source for current information on all technology and TT related resources in Israel. With

three years of Intifada 2 notwithstanding, Israels economic competitiveness growth in 2004 is rated

by the World Economic Forum (WEF)31 at 5.09 or 19th among 104 nations so rated. For comparative

purposes, France is 27th with a score of 4.92, Korea 29th with a score of 4.90 and Turkey scoring 3.82

is ranked 66th

.

http://www.weforum.org/site/homepublic.nsf/Content/Global+Competitiveness+Programme%5CGlobal+Comp..Ac

cording to UN data (Human Development Report2003), Israel is amongthe nations credited with

reaching high human development according to itsHuman Development Index (HDI) which ranks

countries according to life expectancy, levels of education, and standards of living. Using figures from

2002, Israel placed 22nd

with an HDI value of 0.90832

. Its Gross Domestic Product (GDP) in 2002 was

$19,530 per person as compared to $26,150 for the UK. UNIDO, considers Israel among the 25

countries with developed market economies33

,

http://www.unido.org/data/UNIDO/Stats/StaCountry, and, its Democratic institutions rating (on

a scale ranging from (+10) to (10), is right in there with other Western democracies a score of (+10).

Significantly, with the exception of Lebanon (+5) none of its Arab neighboring countries appear

within the positive half of the scale - Saudi Arabia being the only country in the world receiving (-10),

Nationmaster34 (2004). http://www.nationmaster.com/

Based on a study commissioned by the North Carolina Biotechnology Center, Asher (1995), makes the

case that the time has come for American industry and venture capital firms to shop in Israel for

innovative biotechnology products emanating from that countrys research laboratories. In other

words it is time for technology transfer to go north and west from what was not so long ago a

developing country.

31The WEF's GCI involves the evaluation of three main sub indexes (each with multiple dimensions/attributes): theoverall quality of a country's economy at the macro level (e.g., budget surpluses good, deficits bad); the state of itspublic institutions, which includes such measures as the independence of the judiciary and the level of public sectorcorruption; and the level of its technological innovation.32 The highest-ranked Arab country was Bahrain at 40th place, while the Palestinian Authority (PA) wasranked 102. The survey included 175 UN members, the PA and Hong Kong. It is an interesting coincidencethat Israel ranked 22nd among the nations both on HDI and theper-capitaexports of goods and services.33 In juxtaposition, none of its neighbors (in fact all Arab states) are listed among the transition economies.They are all within the developing regions category.34 A vast compilation of data from such sources as the CIA World Factbook, United Nations, World HealthOrganization, World Bank, World Resources Institute, UNESCO, UNICEF and OECD.

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According to the World Bank:Knowledge, and its application, is now acknowledged to be one of the keysources of growth in the global economy. The increasing importance ofknowledge has created both challenges and opportunities for developingcountries. In terms of challenges, it is clear that to be competitiveinternationally, countries must be able to participate effectively in theknowledge-driven supply chains and markets that now dominate the globaleconomy. However, if properly adapted to circumstances and effectivelyaddressed, the knowledge and information revolution presents significantopportunities for reducing poverty and promoting sustainable development.

http://www.worldbank.org/wbi/knowledgefordevelopment/

Clearly, Israel is positioned to use its indigenous knowledge-driven supply chains for

sustainable development and the significant opportunities for reducing poverty which

unfortunately still do exist.

10. SUGGESTED FUTURE WORK

Israel now stands at a major shift of direction in its development paradigm. The Palestinian state is

afait accompli. There are a number of alternative scenarios regarding Palestinian development and

its interaction with Israel. The Palestinian authority has become completely dependent on foreign

technology and foreign aid for most of it. Foreign funding for development of the Palestinian state

will continue into the foreseeable future. The Palestinians do have an educated elite. They were

educated at Palestinian universities such as Beer Zeit, various Israeli universities and abroad. Most

are fluent in English. However most have emigrated out.

The two extreme scenarios are that within some finite time frame the new state will put its house in

order, will forsake terrorism of any kind and will concentrate on development and cooperation with

Israel. At the other extreme into the foreseeable future, is more of what has been up to the start of

2005, with the added convenience of state sanctioned terrorism dedicated to Israels completedestruction, but short of an open war which they are sure to lose.

Neither of these extremums is likely. However in between there is a large spectrum of possibilities

each having a major impact on Israels future development. Several of these need to be identified

and defined so that they are as mutually independent as possible and the set of such is exhaustive

for all practical purposes. Under these conditions it is possible to assign subjective probabilities for

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the outcome of each using any one of the group decision methodologies widely available in the

literature. The results at the end of this exercise can then be used by Israels policy makers in

planning the further evolution of its economy or in minimizing its devolution. Methodologies for

doing the necessary analyses abound - they are within the spectrum of those published in this

journal since its founding in 1966.

11. CONCLUDING REMARKS

In land size Israel, is ranked 100th country, with less than 1/1000th of the world's population. In

slightly over half of one century, it has transformed from a mostly barren and under-populated land,

having a fledgling agriculture performed by inexperienced members of small settler communes and

cottage industry manufacturing to a high-tech35

world-class industrial powerhouse, and a world leader

in arid zone agriculture. Israeli universities and institutes have created innovations in agriculture and

agricultural engineering needs for arid and semi arid zones of the globe and like in the US such

developments were immediately transferred to the agricultural communes and to private farmers on a

gratis basis and offered to all takers from developing nations around the globe. Today, Israel is among

the world leading R&D countries in software, telecommunications, security systems, biotechnology,

pharmaceuticals, and the life sciences. It is an undeclared nuclear power, and the worlds 5th largest

exporter of indigenously designed advanced (high tech) weapons systems.

The above developments, took place while the State was absorbing waves of massive immigrations,

engaged in regular wars with an implacable enemy seeking its destruction, and an economy

continuously under strain by having to spend more per capita on its own protection than any other

country on earth. Above accomplishments would not have been possible without the

institutionalized technology transfer from abroad36

and that from indigenous innovations at

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