Where Breakthroughs Happen

Startup Nation Where Breakthroughs Happen 1 May 2012 Source: State of Israel Ministry of Industry, Trade & Labor...

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Startup Nation Where Breakthroughs Happen

May 2012

Source: State of Israel Ministry of Industry, Trade & Labor 1

Multinationals  Microsoft built their first R&D facility outside the US in Israel.  Cisco built their first R&D facility outside the US in Israel.  Motorola’s Israel facility is the company’s largest development center worldwide.  IBM chose Israel for its first VC investment outside of the US  Intel has 4 R&D facilities and 2 manufacturing centers in Israel, employing 7,000 Israelis  Google opened two R&D centers in Israel  EMC built its Israel Development Centre of Excellence in two locations

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R&D Centers In Israel Haifa Region Northern Region

Tel Aviv Region

Jerusalem Region

Southern Region

Maps: Wikipedia 3

Intel Success Story Developments Include:

 Over 7,000 employees  4 active R&D Facilities  2 Manufacturing Centers P. Tikva R&D Center

1st R&D Center outside USA opened in Haifa

1974

Acquired DSPC – $1.6 Bil

Fab 18 manufacturing center opened in KiryatGat – $1.6 Bill 1985

1st Manufacturing center outside USA opened in Jerusalem

1999

2001 Yakum R&D Center

Jerusalem R&D Center

Acquired Envara – 40 Mil Acquired Mobilian

2004

Acquired Oplus – $100 Mil 2005 Yokneam R&D Center

2008 Fab28 m. plant Opened in Kiryat Gat – $3.5 Bill

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IBM’s Success Story  Over 2000 employees in  From 2001-2009:IBM Haifa, Rehovot, and made 23 acquisitions Jerusalem  GTU - Global Technology Unit Opens Acquired Ubique $15 million

1st Branch In 1950

Acquired Unicorn Solutions $7.5 million

Acquired XIV $300 million

Acquired Iphrase Technology

1950

1972

1998

2005

Opens Haifa Development Lab, an IBM scientific center

2006

2007

Acquired Watchfire Converts it to R&D Software center

Acquired FilesX $80 million

2008 Acquired Diligent Technologies $165 million

Acquired Guardium $225 million

2009

2010

Acquired Storwize $140 million

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EMC’s Success Story  Over 800 employees  Center of Excellence in 2 active R&D sites EMC starts operation in Israel

1991

1996

EMC Israel’s Sales Operation is formally established

RSA acquires Cayota

EMC acquires Kashya.

EMC acquires nLayers

EMC acquires Proactivity

1997

EMC established its R&D center in Kibbutz Nirim IL

2006

EMC acquires Illuminator.

EMC acquires Zetta Point

2007

EMC Israel development center is established

EMC established Beer-Sheva site

2011

EIDC and RSA consolidate to the new Israel COE in Herzelia

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Centers Of Exellence Guiding Principles • Expand geographic presence • International investments • New partnership models • Innovate everywhere • Operational excellence • World class talent • Product localization • Grow government/academic relationships • Community involvement • Go-to-market

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Israel Hi-Tech Cluster

“Solid” Infrastructure

Government Support

Incubators

Experienced 2nd time entrepreneurs Defense

University Computer Science Students

Availability of Technical People & Management Expertise

Global Hi-tech Companies

Existing Technology Infrastructure

Leading Academic Institutions & Research

Multi National Corp.

Entrepreneurial Culture

Corporate R&D

Corporate Spin-Offs

Seasoned VC Community

“Soft” Infrastructure

Immigration

Source: IVA 8

NASDAQ Non-US Listed Companies: Selected Countries 90 80 70 60 50 40 30 20 10 0

Source: NASDAQ (10/2011). Analysis: Invest in Israel 9

V. Capital Raised by Israeli Hi-Tech Companies ($USD Millions) 2500 2000 1500 1000 500 0 02'

03'

04'

05` Israeli

06'

07'

08'

09'

10'

Foreign

Source: IVC-ONLINE 10

Israeli Breakthroughs: Selected Examples Given Imaging’s first ingestible video camera used to view the small intestine and diagnose disorders Intel’s Sandy Bridge, Core 2 Duo, and Centrino M System’s Disk on Key and Disk on Chip flash memory GE Healthcare’s portable cardiac ultrasound system The Phillips Brilliance CT Scanner IP Telephony invented by founders of Vocal Tec Argo Medical – First commercially available upright walking technology enabling wheelchair users to walk and climb stairs

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The Global Competitiveness Report 2010-2011 (World Economic Forum) Company spending on R&D

“Israel ranks 24th in this year’s GCI, up three positions after having suffered losses in competitiveness over the past years. The country’s main strength remains the excellent—and improving— capacity for innovation (6th), which rests not only on highly innovative businesses but also on the availability of high-quality research institutions and is reflected in a high number of patents.”

Utility Patents per Million

Capacity for Innovation

Quality of scientific research institutions

World Economic Forum The Global Competitiveness Report 2010-2011 12

The IDF Ascends to the Negev: A Vision Leading the national effort of bolstering the Negev by transferring IDF bases, utililizing elite units, and assigning quality manpower to the Negev.

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Israel – Current Status The State of Israel Population Density by Region

The majority of Israel’s

1.2 Million Residents 16% of the Population

population is located in the centre of the country.

3 Million Residents 40% of the Population

This is also the case in terms of Israel’s economic activity. There are wide economic gaps between

Legend

the centre and the periphery.

1 Million Residents This consolidation is an obstacle 14% of the Population

to sustainable growth.

Source: Central Bureau of Statistics. Data from 2008.

Israel – Current Status

The majority of Israel’s

12% of Factories and 17% of Israeli Jobs.

population is located in the centre of the country.

57% of Factories and 50% of Israeli Jobs

This is also the case in terms of Israel’s economic activity. There are wide economic gaps between the centre and the periphery. This consolidation

9% of Factories and 13% of Israeli Jobs

is an obstacle to sustainable growth.

Source: Central Bureau of Statistics. Data from 2008.

Israel – Objective in 2030

A more uniform distribution of Israel’s population and

2.4 Million Residents Constitute 25% of the Population

economic activity – 45% of residents and jobs are concentrated in the Negev and in the Galilee. 2 Million Residents Constitute 20% of the Population

Per capita income would be at least that of central Israel.

Legend

Cycle of Output and Outcomes

Continuous Settlement Area Alongside southern Har-Hevron Reinforcing Education & Health systems In the Negev

Handling Of the Environment Infrastructures

Upgrading National Infrastructures In the Negev

Expanding The scope of Economic activity

The IDF Ascends to the Negev

Privatization Of services

Employment growth

Moving High quality Population To the Negev Shift of Security Purchases and Projects To the Negev Capital Investment In the Negev During Construction period

Summary  Israel is a center of innovation and technological excellence  Israel is a leading entrepreneurial society  Israel enjoys an excellent track record in breakthrough discoveries and innovations  Future results are expected to improve due to the maturity of the market  Foreign companies can cost-effectively conduct cutting-edge research in Israel  Israel’s government and policies strongly support investment and economic growth

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Thank You! 19