The keys to Israel retaining a competitive edge in the world's hi-tech market include addressing the country's approach to technology, education and finance, revealed speakers at the first Ra'anana Conference for National High Tech Policy on Tuesday. The inspiration for the conference came more than three years ago out of a realization that despite the country's success in the technology sector, Israel's market was going to be in trouble within a decade as other countries build their hi-tech sectors. "I realized that many countries around the world were doing things to become hi-tech empires and these countries have resources that Israel does not - both in terms of money and manpower - and if something wasn't done soon, we were going to be in big trouble," conference chairman Shlomo Gradman told The Jerusalem Post on Tuesday. "There was an inherent contradiction in my thinking," added Gradman. "On the one hand, Israel's hi-tech sector was doing very well when I first conceived the conference idea, however, I also knew that this was the time to start planning for the next 10 - 20 years." Gradman explained that leading up to the conference the organizers identified three areas in need of immediate addressing by the country's hi-tech leaders and built the conference around the themes of technology, education and hi-tech financing. "In order for Israel to remain ahead in the technology market and to compete with other larger nations, we don't need to be the best in every area, but rather we need to concentrate our efforts on certain sectors - this will give us the competitive advantage." According to Gradman, the fact that Intel, the world's leader in the manufacture of microprocessers, chose Israel as the center of its microprocessing operation is no accident. "We specialize in this field," said Gradman, "and in order to remain successful and to attract more large companies like Intel, we need to increase the sectors in which we specialize in." While Israel may boast some of the best specialists and sharpest minds in the hi-tech field, each year fewer engineering graduates are coming out of Israel's universities. According to Gradman, China and India graduate a combined 800,000 engineering students a year, while Israeli universities produce less than 1,000. "A more glaring problem, however," said Gradman, "is that Israel's education system is currently producing 50 percent less than the average of the western world in terms of high school graduates who have completed courses in math and physics. This needs to change in order for us to remain at the top of the hi-tech market," said Gradman. The third issue which speakers at the conference addressed was that of financing hi-tech companies. "Today in Israel, we have two major sources of funding for hi-tech companies - the chief scientist's office, which has allocated NIS 250 million per year for the development of hi-tech and $1.6 billion in venture capital funds - 90% of which comes from abroad," explained Gradman. According Gradman's figures, the country invested some $21b. abroad in 2006. "If only 10% of this was allocated to local companies, that would make a big difference in the economy, however, part of the problem is that government does not offer any incentives for local investing," he said. Communications Minister Ariel Attias, speaking at the conference, said that the government's approach to hi-tech needs to be one of "hi-give." "Today, the government only gives 5% of the total amount spent on hi-tech research and development - this number needs to grow and by doing so, the entire country will reap the benefits." Also present at the conference was Education Minister Yuli Tamir, MK Binyamin Netanyahu and President Shimon Peres. "The fact that personalities such as these came to the conference shows that this is an important issue," said Gradman. "We hope that this conference becomes the major platform in which the country focuses and furthers its approach to hi-tech. Just like the Herzliya Conference is the chief platform for the prime minister to announce his policy plans, we hope this becomes the leading conference for the Israel's hi-tech development," he added.