Israel will be the first end-to-end digital nation, Cisco CEO John Chambers said on Wednesday in Jerusalem. Prime Minister Binyamin Netanyahu and Chambers agreed earlier in the day to establish a working group to explore how Cisco can help upgrade Israel’s digital infrastructure.

Whereas most countries upgrade one area at a time, Israel is moving to connect homes with fiber-optic networks and infrastructure in businesses, education, healthcare and security all at once – with cooperation from the networking giant, of course.

“It’s a risk that Cisco is very much committed to and proud to do,” Chambers said. “This is going to be the first digital nation, if we’re successful.”

The importance of having strong technological infrastructure in place is necessary to achieve the stunning growth potential expected in the coming years. Over the course of the next decade, private companies will be able to generate $14 trillion in profits from the ever-increasing connectivity of devices known as “The Internet of Everything.”

According to Chambers, the next wave of network technology that connects not only computers but appliances, objects, processes and data will integrate fields as far-flung as healthcare and education. Based on Cisco’s estimates, in 2013 alone the “Internet of Everything” profits will reach $613 billion.

“If I were a start-up in Israel that’s the direction I would go,” he said.

Cisco announced three initiatives in Israel: a research and development lab on cyber security; building security consulting services; and launching a pilot training program on information security. The focus on security is paramount to the future of business, he noted.

“There’s not a company I’m aware of that hasn’t been attacked with complexity,” he said.

Cisco is to invest $15 million in Venture Capital funds in Israel.

Chambers said he was impressed that despite some sharp difference in political parties, the various ministers with whom he met all supported pushing technological infrastructure forward.

“When your country decides to move, you move together,” he said.

“It’s unusual that you get that kind of alignment across multiple political parties,” he said.

Asked about potential risks of tinkering with Israel’s capital investment policy, Chambers advised not to drive investment away.

“I’d be very careful in tax policy not to kill your golden goose in the process.” While fiscal responsibility were very important, he said, “the best way to get tax policy up is growth.”

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