Israel Japan | Business Guide | 2018

1962: Isfar,the company representing Sony in Israel,starts to import Sony’s products. Historical Moments 034 > High-Tech > 70 years of Israeli Innovation Israel-Japan > Business Guide > 2018 Growth of Israel’s High-Tech Industry In the early 1990s, the civilian high-tech industry began to take off with the entry of local and foreign venture capital funds and foreign investment in the then nascent sector. Major international technology companies like Intel, IBM,Motorola,and Microsoft set up large research and development operations taking advantage of the high level of technical expertise.They become the backbone of the local industry and have been joined in the past decade by hundreds of other foreign tech giants including the new technology titans:Google,Facebook,Apple and Amazon. Israeli entrepreneurs began producing an increasing number of home-grown winners including Check Point (Internet security), Comverse Technology (telecom services),Nice Systems (recording platforms), and Amdocs (telecom billing).They helped transform Israel into a tech powerhouse and a hunting ground for foreign giants who have spent over US$ 100 billion on buying up local high-tech firms.There have also been dozens of IPOs: over 100 Israeli firms ended up on NASDAQ and other foreign exchanges. Israel has an estimated 4000 startups, the highest per capita level in the world, 600 founded last year alone. R&D spending in Israel as a percentage of GDP is the highest in the world Israeli success has long derived from the high level of innovation of the local high-tech industry and the highest level in the world of national expenditure on R&D as a percent of GDP.Israel spent the equivalent of 4.3% of GDP on R&D. The next closest are Sweden and Finland with 3.7% and 3.5% respectively. By contrast, the US spends 2%. Startup companies remain a key element of the local high-tech scene and of its success over the years. Dubbed the “Silicon Wadi,” Israel has an estimated 4000 startups, the highest per capita level in the world, 600 founded last year alone. IVC reported that last year startups raised more than $5 billion, topping the previous year’s record figure. Israel’s strengths in the technology sector have changed over the past decade.“The emphasis has shifted from communications hardware and silicon to cyber-security,big data,analytics, automotive technology, life sciences and medical devices,”says Moshe Zviran,Dean of the Coller School of Management at the Tel Aviv University.Many of the acquisitions by big name technology companies in recent years have been of cutting-edge Israeli companies in the sectors.