International giants 'threatening' local hi-tech, study says

Another alarming issue is the paucity of manpower in Israel's hi-tech sector when compared to larger countries.

By MATTHEW KRIEGER
May 30, 2007 07:39
1 minute read.

 
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As increasing numbers of the world's more populous countries develop their hi-tech sectors, pressure is mounting on Israel to maintain its status as a world technology leader.

"Countries around the world realize hi-tech is a good investment and a good source of income for an economy and many are therefore pushing in this direction, posing a real and direct threat to Israel," said Shlomo Gradman, director of ASG and chairman of the forum of hi-tech CEOs in Israel. "We seem to be less attractive to foreign investors than in the past."

A poll of potential hi-tech investors conducted by Deloitte found that 30% intended to invest in Chinese hi-tech companies, while 25% said they planned on investing in India - Israel was not on the list.

"Even more than this," noted Gradman, "over the last four-and-a-half years, investments in China's hi-tech sector have grown from $500 million a year to $2.2 billion, while investments in Israel's hi-tech companies have hovered consistently around $1.5b., without displaying signs that they will rise above this mark."

Another alarming issue is the paucity of manpower in Israel's hi-tech sector when compared to larger countries.

"Only 8,500 university graduates in Israel joined hi-tech companies in 2006, as opposed to 350,000 new graduates in India and 500,000 in China," Gradman reported.

In response to the rising international threats to Israel's hi-tech market, Gradman has organized the Ra'anana Conference, a one-day seminar to be held in June that will explore how Israel can maintain its competitive edge and forge ahead new pathways in the hi-tech world.

"Nobody is doing anything to actually address these threats to the Israeli hi-tech industry," he said. The conference will include heads of the country's technology sector, as well as education and financial resource leaders, who were expected to seek solutions to advance Israel's hi-tech program while making it more appeasing to foreign and more importantly, domestic, investors.

"Israelis invested $21b. abroad last year, and those that invested at home practically ignored the hi-tech sector investing only 10% of the total $1.6b in hi-tech investments, choosing to put their money towards real estate instead," Gradman said. "Part of our goal is appealing towards industry leaders here to realize the potential the hi-tech sector can provide."

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