Israel's strength in tech. development

By P. Vikram Reddy

HYDERABAD, JAN. 10. With over 4,000 start-ups in the information technology sector and 120 listed on the Nasdaq, can any country hope to escape the IT meltdown or not feel the ripples of the U.S. economic slowdown?

Israel hopes to do so, because ``We are going into areas where big players are not. Because of this uniqueness, demand for and business for Israeli IT companies will still be there'', asserts, Mr. Amiram Shore, Chairman of the Israeli Software Association, Tel Aviv, who is here to attend the Partnership Summit organised by the Confederation of Indian Industry (CII), with the State Government as the partner.

He is also Chairman of MLL Software Industries, part of the Formula Group - the largest IT Group in Israel. He is also credited with taking the first bold step in setting up the first software company in Israel in the private sector in 1963.

In a chat with The Hindu here, he emphatically stated ``Recession (in the U.S.) will not touch these areas (of specialisation of Israeli companies)''. There is no doubt that the U.S. is going through tough times, but there is also no doubt that the new economy (Internet) will emerge, he says confidently.

The flow of money to Israel, which he insists is the second Silicon Valley of the world, is still continuing and all companies are able to market their products in the U.S. The Israeli hi-tech industry is not facing any problem. The fact that 50 countries budgeted $2.3 trillion in 1999 for IT, which is expected to touch $3 trillion by 2004 is an unbelievable phenomenon. And in the process they will be using the services of over two million programmers.

Israel's strength emerges from the fact that it encourages technology development and incubation. For example, there are as many as 30 such hitec parks in an area as small as the Jubilee Hills in Hyderabad, he says, referring to the place where he spoke to this correspondent.

On niche areas of technology and solutions development, he said Israel was leading in quality assurance (checking) of products and tools, security systems for Internet and all kinds of devices for the telecom sector. In education (distance), there were over 50 companies developing software. So was the case in satellite technology. There are over 100 companies in telecommunications developing technology. And 90 per cent of technology developed by Israel is purchased by the U.S. Equally important, 100 of the 120 Nasdaq listed companies are technology companies, he says.

The Association of Software Houses, is a strong body representing 500 software houses employing about 14,000 software engineers. In the hitech electronics field there are another 47,000 engineers. The software export houses' combined turnover in 1999 was around $2.6 billion. Including domestic software business it would be $3.5 billion. Software exports were 57 per cent of all industrial exports. In the coming years, he was confident this would amount to 70 per cent of exports.

It was only second to Canada in terms of the large number of Nasdaq listings, and behind only the U.S. in the number of start- ups. And what is the driving force behind this, besides the Government policy? It is the 6.4 million people, of whom about 1.6 million Arabs are not taking part in this, he says.

A striking aspect of IT was that 75 per cent of jet fighters in Israel army end up as leaders of start-up companies. The army happens to be the best technology school, for these youngsters who join at 20 years and leave by 28 years, he says. And the country has more than 200 multi-millionaires, he says with pride.

And by 2005 information, communication and technology (ICT) will be the most important areas of the future. Going by the trends, he says, there is the emergence of another industry. ``We believe that will be the industry of selling of companies and technologies''.

And what are these three the world is talking of? They are India, Israel and Ireland, which are leading the world in IT. An observation that should be heartening to India.

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