A worrying look at the future of Israeli hi-tech

Israel should be wary of competition from hundreds of thousands of Chinese and Indian engineers.

hi tech biz 88 224 (photo credit: Ariel Jerozolimski)
hi tech biz 88 224
(photo credit: Ariel Jerozolimski)
Obsolescence, planned or otherwise, is a part of the computer industry. The minute a new processor or program is created (and certainly by the time you get to use it), it's already "old hat," since they've already started working on a new, improved version. The same holds true for the computer industry; today's hi-tech darling could be tomorrow's old news, says Shlomo Gradman, organizer of the second annual Ra'anana Conference for National High Tech Policy, taking place this Tuesday in Ra'anana (http://raanana-conference.org.il). Israel is a premier location for hi-tech development today, second (if not first) to Silicon Valley. But where many see clear skies for Israel's hi-tech future, Gradman sees a huge typhoon heading in from the east - courtesy of China and India - that may relegate Israel to a distant fourth banana status in terms of hi-tech development, a situation that would wreak havoc with the economy. "It's all in the numbers," Gradman says. "Israel produces about 10,000 new engineers annually, while China and India graduate 850,000 between the two of them - half a million in China, and the rest in India. Add to that the newly revived economies in Eastern Europe, and Israel is looking at a lot of competition in the coming years for investment money for innovative development." In a sense, Gradman says, it's Israel that is responsible for this new competition; developing countries looking at our predominance in hi-tech have come to realize that with education, infrastructure, and a little bit of luck, they, too, can develop a major export industry that brings first world wealth to a second or third world society - and they want in on a good thing. "We can't afford to fall behind," Gradman says. "Half of this country's exports are in the area of hi-tech. Imagine what would happen to the economy if we lost that number of exports," he says. Preventing such a catastrophe is one of the major themes of the Ra'anana Conference, says Gradman; workshops will discuss issues such as setting strategic goals for Israel's high tech industry and developing new plans to improve education in science and technology for Israeli students - to ensure that we're using our human resources as efficiently as possible. Both countries are known for their cheap back-office programming sweatshops, where underpaid and undereducated workers build databases and write programs for Web applications - the kind of drudge stuff nobody really wants to do anyway, and certainly far from the world- and Web-changing innovation done here in Israel! But that was then; now, India and China are ready to spread their hi-tech wings. What's stopped them in the past has been a lack of infrastructure, but as they get wealthier, they can afford more labs and development centers, making it more likely that investors will see them as development centers for innovative technology, and not just dumping grounds for back-office work. Like Gradman says, it's all in the numbers; Between the two of them, India and China are producing 100 times the engineers Israel is. "The odds are that out of such a large pool, some major innovations that attract available investment dollars and jobs are inevitable," he says, pointing to studies at several US universities which showed that students from Asia thrive and innovate when given the kind of labs and development centers available in the US and Israel. "Now is the time to set proper policies and strategies to prevent a calamity," Gradman says - and that's what the Ra'anana Conference is all about. Among the speakers at the conference will be heavyweights in the world of education, science, technology and politics - areas where officials will need to roll up their sleeves and get to work if we're to stay on top of the hi-tech game. Scheduled speakers include Minister of Industry, Trade & Labor Eli Yishai, Education Minister Yuli Tamir, Finance Minister Roni Bar-on, Chief Scientist Dr. Eli Opper, representatives of some of the biggest hi-tech companies and venture capital firms active in Israel, Mayor of Ra'anana Nachum Hofri (whose city is a partial sponsor of the conference) and President Shimon Peres.