Transcript שקופית 1

State of Israel
Ministry of Industry, Trade & Labor - Foreign Trade Administration
Investment Promotion Center
Investment Climate in Israel
June, 2005
Contents
1. From Citrus to Software - An Economy Transformed
2. Foreign Investment & Venture Capital
3. Israel - a High-Tech Powerhouse
Main Indicators
2001
2002
2003
2004
2005F
Inflation (%)
1.4
6.5
-1.9
1.2
1-3
Unemployment (%)
9.3
10.5
10.9
10.0
9.1*
Imports ($ billion)
33.3
33.1
34.2
41.1
45.8
Exports ($ billion)
29.0
29.3
31.8
38.5
43.1
GDP ($ billions)
109.5
102.7
109.1
117.2
121
GDP/Cap ($)
17,180
15,468
16,312
17,200
17.7
* May 2005
From Citrus to Software –
An Economy Transformed
From Citrus to Software - An Economy Transformed
 Until the 1980s, the Israeli economy was mainly
focused on traditional industries
 Since the 1980’s, the economy has been transformed
by a high-tech explosion
 In the 1960s, agriculture represented 70% of Israeli
exports
 Today, agriculture comprises only 3%
Jaffa Oranges vs. Software
Exports
($ millions)
Citrus
Software
3500
3000
2500
2000
1500
1000
500
0
1992 1993 1994 1995 1996 1997
1998 1999 2000 2001 2002 2003
Source: Dept. Economic & Planning Admin.,
Ministry Industry, Trade and Labor
High-tech Exports
 During 2003, hi-tech exports comprised 36% of Israel’s
industrial exports
 2003: Hi-tech exports - $9 billion
 Over the last ten years, hi-tech exports have tripled
Source: Association of Electronics &
Information Industries (Israel) - 2003
High-Tech Exports
16
14
12
10
8
6
4
2
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003* 2004
Source: Economic & Planning Admin.,
Min. of Industry, Trade & Labor 2003
Case Study: The Software Industry
 Sales of Israeli software have increased by over 700%,
over the last 10 years
 Professional manpower has increased 250%
 Local sales amount to over $900 m per year
Where does Israel excel?
 Biotechnology
 Telecommunications
 Data security
 Medical equipment
 Software
 Optics
 Semiconductors
 Internet technologies
 Agrotechnology
 Computer aided education
 Safety & Security
Excellence
“ There are few places like Israel
where one can find leading technologies
”
in almost every field.
Y. Hasson – Senior Vice President Nokia Venture
Partners (London) September 2003
Foreign Investment & Venture Capital
Investment climate in Israel
Foreign Direct Investment in Israel
Millions USD
7,000
6,000
5,000
4,000
3,000
2,000
1,000
-
91'
92'
93'
94'
95'
96'
97'
98'
99'
00'
01'
Source: Bank of Israel
02'
03'
04'
05'
(F)
Not including traded securities
Sources of Foreign Investment - 2003
Europe
27%
North
America
49%
Other
18%
Asia
6%
Source: Israel Venture Association , March 2003
Happy Investors
“ Outside the US, we invest in only one
other country. That’s Israel. ”
Julien Nguyen, Managing Partner,
Applied Materials Ventures September 2003
Major Acquisitions of Israeli companies
 Perrigo bought Agis for $900 million
 Intel bought DSP Communications for $1.6 billion
 Lucent bought Chromatis for $4.5 billion
 Marvell bought Galileo for $2.7 billion
 Marvell bought Radlan for $195 million
 Broadcom bought VisionTech for $1 billion
 HP bought Indigo for $629 million
 Veritas bought Precise software for $609 million
 Guidant bought X-Technologies for $160miliion
Recent trends and developments
Recent M&A
Israeli Company
Technology
Acquirer
Sum
Time
Impulse Dynamics
healthcare
Johnson &
Johnson
$80M
05/2005
Siliquent
semiconductors fabless
Broadcom
~$85M
05/2005
Tecnomatix
software
UGS Corp
$228M
04/2005
Kagoor
Voiceover Internet
$68M
03/2005
Savient
biopharmaceutical
$80M
03/2005
OREX Radiography
Medical equipment
Kodak
$51M
03/2005
Native Networks
Communication
Alcatel
~$50M
03/2005
Oplus Technologies
processors for digital
display devices
Intel
$100M
03/2005
Modem-Art
semiconductors fabless
Agere
Systems
$150M
02/2005
Juniper
Networks
Ferring
Holding SA
Recent trends and developments
Recent M&A
Israeli Company
Technology
Acquirer
Sum
Time
Agis
Pharmaceutical
Perrigo
$900M
11/2004
ART Technologies &
Phonetic Systems
Speech Applications
Scansoft
$100M
11/2004
P-CUBE
Traffic Management
CISCO
$200M
8/2004
ENVARA
Wireless infrastructure
INTEL
$40M
3/2004
EMBLAZE
Chips for Mobile-device
applications
ZORAN
$54M
6/2004
ACTONA
TECHNOLOGIES
Enterprise software
CISCO
$100M
6/2004
A2I
Content management
software
SAP
$10M
7/2004
SANCTUME
Web security
WATCHFIRE
$45M
7/2004
Israel in the global investment market
 Over 70 Israeli companies are traded on the Nasdaq
(the biggest outside N. America)
 Over 30 Israeli companies traded on European
exchanges
 21 Israeli companies dual-listed on the Tel Aviv Stock
Exchange and Nasdaq
Venture Capital
 Investments by venture capital funds constitute an
added value above financial contributions - in
management, world market familiarity, strategic
guidance and economic credibility.
 Capital raised by Israeli VCs Surges to $724m in
2004
 Capital available for investment now at $1 billion
 $1.5 billion projected to be raised by VCs in 2005
Source: IVC Research Center (2004)
High-tech Capital Raised 1995-2003
6000
5000
4000
3000
2000
1000
0
91'
92'
93'
94'
95'
96'
97'
98'
99'
00'
01'
02'
03'
Source: Israel Venture Association, March 2003
VC Investments (by quarter)
600
500
400
300
200
100
0
Q2
Q3
Q4
Q1
2002
Q2
Q3
Q4
Q1
2003
Q2
Q3
Q4
Q1
2004
Q2
Q3
Source: IVC Online
VC Investments in Israel & Europe
2001
2002
1800
1600
1400
1200
1000
800
600
400
200
0
Spain
Holland
Sweden
Italy
France
Germany
Britain
Israel
Source: Price Waterhouse Cooper, May 2003
Good Things – Small Packages
“ Israel is a small country with a tiny
population, and yet it has many significant
”
high-tech success stories.
Sven Lingjaerarde – Co-Founder & General Partner
Vision Capital – September 2003
VC Investments by Sector - 2003
Life Sciences
15%
Other Technology
11%
Software
27%
Semiconductors
8%
Internet
4%
Communications
35%
Source:Israel Venture Assoc. January, 2004
Multinationals
 Microsoft built their first R&D facility outside the US in Israel
 Cisco built their only 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
 Sequoia Capital (Israel) is the company’s first VC fund to be
set up outside of Silicon Valley
Foreign Companies Invested in Israel- Some Examples
US
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Microsoft
Pratt & Whitney
AOL Time Warner
Intel
IBM
Boeing Enterprises
Cisco Systems
GE
Lucent
3Com
Hewlett Packard
Merrill Lynch
Motorola
Sun Microsystems
Europe
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Philips
Alcatel
Siemens
DaimlerChrysler
Volvo
Cable & Wireless
Baan
Volkswagen
Deutsche Telecom
L’Oreal
British Telecom
Danone
Ares Sereno
Unilever
Asia
•
•
•
•
•
•
•
•
•
•
•
•
Samsung Electronics
Daewoo
Nomura
Hutchison Telecomm.
LG Group
Sony
Toyo Ink
Hyundai
Acer Computers
Sumitomo Trading
Fuji
Honda
Israel
a High-Tech Powerhouse
Excellent Human Resources
Dynamic Infrastructure
Excellent Human Resources
 Highly educated workforce
 A multilingual population with cultural, historic and
business ties to almost every other nation
 Over 1 million highly educated immigrants from the
former Soviet Union since 1989
 275 engineers per 10,000 employees
Scientists & Technicians per 10,000 Workers
140
140
120
100
83
80
80
60
60
55
55
45
43
33
40
33
32
25
20
0
Israel
US
Japan
Germany
Canada Switzerland Taiwan
UK
Ireland
Italy
Singapore
Spain
Excellent Human Resources II
 Well established and strong academic infrastructure
 An outstanding entrepreneurial spirit
 Success stories breed success. Everyone wants to
be an ICQ
Excellent Human Resources III
Highly trained graduates of the Israel Defense Forces have
turned cutting edge defense technology into civilian applications.
“ Israel leads in encryption software, a by-product
of it’s military industry, as are so many
technologies in which it excels.
“Forbes” June 2002
”
Entrepreneurship
9.11
8.42
7.53
6.47
6.51
UK
Korea
6.77
7.83
7.9
6.9
5.83
4.97
5.06
5.16
3.8
Japan
Mexico France GermanySingapore
Ireland Australia Taiwan Canada
Israel
HK
USA
Source: IMD World Competitiveness Yearbook, 2002
World Economic Forum 2002-3
 Technology Index Rank 7/ 82
 Innovation Sub Index 6/82
 Networked Readiness Index: 12/80
 Environment Component Index: 5/80
 Readiness Component Index 8/80
 Microeconomic Competitiveness: 18/80
Source: World Economic Forum,
Global Competitiveness Report; 2002-03
The OECD International Investment Declaration
 In 2002 Israel adhered to the OECD Declaration on
International Investment and Multinational Enterprises, and to
the OECD Guidelines for Multinational Enterprises.
 The declaration and guidelines create a framework of good
practices principles for the operation of enterprises and
Member States with regard to international investment.
‫דוגמאות למסרים לקידום ישראל‬
IMD World Report 2004
Country Rank 
1st
2nd
3rd
4th
Total expenditure on R&D as percentage of GDP
ISRAEL
SWEDEN
FINLAND
ILE-DE-FRANCE
Number of mobile telephone subscribers per 1000
inhabitants
ISRAEL
LUXEMBURG
HONG KONG
ITALY
Total public expenditure on education as percentage of
GDP
DENMARK
ISRAEL
CANADA
MALAYSIA
GDP & energy consumption - Real GDP growth minus
energy consumption growth
ZHEJIANG
ISRAEL
MAHARASHTRA
CHINA
University education meets the needs economy
FINLAND
ISRAEL
SINGAPORE
SWITZERLAND
Consumer price inflation - Average annual rate
HONG KONG
ISRAEL
TAIWAN
JAPAN
DENMARK
ICELAND
ISRAEL
AUSTRIA
LUXEMBURG
ILE-DE-FRANCE
ISRAEL
BAVARIA
INDIA
FINLAND
ISRAEL
MAHARASHTRA
ZHEJIANG
HONG KONG
U.S.A.
ISRAEL
SINGAPORE
FINLAND
CANADA
ISRAEL
Skilled labor availability
Total R&D personnel in business per capita, full time work
equivalent (FTE) per 1000 people
Qualified engineers available in labor market
Entrepreneurship of managers
Legal environment affecting R&D does not restrain
business development
Source: IMD World Competitiveness Yearbook- 2004
‫דוגמאות למסרים לקידום ישראל‬
WEF –Competitiveness Report 2004 – 2005
Country Rank 
1st
2nd
3rd
4th
Technological readiness
ISRAEL
U.S.A.
FINLAND
SWEDEN
Availability of mobile or cellular telephones
ISRAEL
NORWAY
ICELAND
HONG KONG
Business costs of irregular payments (all countries hare
the same rank #1)
ISRAEL
DENMARK
ICELAND
HONG KONG
Venture capital availability
U.S.A.
ISRAEL
UK
HONG KONG
Quality of scientific research institutions
U.S.A.
SWEDEN
ISRAEL
FINLAND
Availability of scientists and engineers
INDIA
FINLAND
ISRAEL
JAPAN
Utility patents
U.S.A.
JAPAN
TAIWAN
ISRAEL
WEF – The Global Competitiveness Report 2004 – 2005
Innovation
“ Israel is important to our goal because it has
historically been a hotbed of new raw
technology and scientific developments
”
Matthew I. Growney, Managing Director
Motorola Ventures September 2003
Growth Competitiveness Ranking – World Economic Forum 2002-3
USA
Singapore
UK
Germany
Israel
Korea
France
China
2001
2
4
12
17
24
23
20
39
2002
1
4
11
14
19
21
30
33
Patents
Number of patents (per 10,000) registered in the U.S. during 2003
2.98
2.96
2.04
2.02
1.92
1.74
1.5
Japan
Taiwan
israel
Switzerland
Sweden
Finland
Germany
0.7
0.68
France
Britain
Israel - An annual increase of 20%
Source: BDI - Business Data Israel
Modern Infrastructure
 State of the art telecommunications
 World renowned research and educational institutions
 A highly advanced banking and financial sector
 A large volume of high-tech and science based industry
Government Support
 Competitive government assistance for R&D projects
 Tax holidays for up to 10 years for foreign investors
 The reform law for the Encouragement of Capital
Investment will simplify bureaucratic processes related to
the approval of investments through the establishment of
a "green lane". In addition a "Strategic Track" will offer
multinational companies significant benefits.
Supportive Business Environment
 Worldwide taxation and customs treaties
 Protection of trademarks, patents and intellectual
property of all kinds
 Comprehensive legal protection of foreign companies
Government Reforms
 Liberalization of foreign currency
 Deregulation of foreign trade
 Privatization of government companies
Privatization
 The privatization process began in 1986 and was
accelerated in 1997
 During this time 82 companies have ceased to be
state owned
 2003:National airline El-Al begins privatization
 From 1986- 2002 $8.6 billion was raised through
privatization
Trade Agreements
 Membership in world organizations: GATT (since 1962),
WTO (since 1995) and an active part in OECD
 Israel has free trade agreements with:
EU (25)
US
Canada
EFTA (4)
Mexico
Turkey
Romania
Bulgaria
Joint R&D Foundations










BIRDF – with the U.S.
USISTC – US-Israel Science and Technology Commission
BRITECH - with Britain
CIIRDF – with Canada
KORIL-RDF – with Korea
SIIRD – with Singapore
FRANCE
GERMANY
ITALY
SWEDEN
European Union 6th Framework Agreement
 An active participant in the European Union’s R&D
Framework program since 1996
 Israel continues to be active in the 6th Framework
Agreement that began in November 2002
Technological Incubator Projects
23
technological incubators operate
200
projects operate currently
735
projects have left the incubators in the last decade
54%
have received further private investment
So, Why Do Business in Israel?
 Outstanding human resources
 Modern infrastructure
 Supportive business environment
 Cutting edge technology and scientific breakthroughs
State of Israel
Ministry of Industry, Trade & Labor
Foreign Trade Administration
Investment Promotion Center
5 Bank Israel St., Kiryat Ben-Gurion Jerusalem, Israel
www.investinisrael.gov.il
[email protected]
Tel: +972-2-6662607 Fax:+972-2-6662983