Silicon Wadi
Encyclopedia
Silicon Wadi is an area with a high concentration of high-tech industries in the coastal plain
in Israel
, similar to Silicon Valley
in California
, in the United States
. Silicon Wadi is considered second in importance only to its Californian counterpart. The area covers much of the country, although especially high concentrations of hi-tech industry can be found in the area around Tel Aviv
including small clusters around the cities of Ra'anana
, Petah Tikva
, Herzliya
, Caesarea, Haifa
, the academic city of Rehovot
and its neighbour Rishon Le Zion. More recently, clusters have been established around Jerusalem, as well as towns such as Yokneam Illit
and Israel's first "private city", Airport City, near Tel Aviv
.
n region of Silicon Valley
. "Wadi
" is the Arabic word for a dry river bed.
was founded, followed in 1962 by Tadiran
and Elron Electronic Industries
regarded by many to be the "Fairchild of Israel." The number internationally successful firms grew slowly, with only one or two new successful firms each year until the early 1990s. Motorola was the first US corporation to set up an R&D unit in Israel, in 1964. The center initially developed wireless products including remote irrigation systems and later developed leading chips such as the 68030. Following the 1967 French arms embargo, Israel was forced to develop a domestic military industry, focusing on developing a technological edge over its neighbors. Some of these military firms started to seek and develop civilian applications of military technology. In the 1970s more commercial innovations began, many of which were based on military R&D, including: Scitex digital printing systems which were based on fast rotation drums from fast-rotation electronic warfare systems., Elscint
, which developed innovative medical imaging
and became a leading force in its market.
, the Israeli computer corps, established by the IDF
in the 1960s.
Hi-tech firms continued to struggle throughout this period with marketing and many products, such as a mini-computer developed in the 1970s by Elbit, who were unable to successfully commercialise the product.
The 1990s saw the real takeoff of hi-tech industries in Israel, with international media attention increasing awareness of innovation in the country. Growth increased, whilst new immigrants from the Soviet Union increased the available hi-tech workforce. Peace agreements including the 1993 Oslo Peace Accord increased the investment environment and Silicon Wadi began to develop into a noticeable hi-tech cluster.
and research and development. Cultural factors contributing to the expansion includes chutzpah
and openness to immigration. The government also assists industrial growth by providing low-rate loans from its development budget. The main limitations experienced by industry are the scarcity of domestic raw materials and sources of energy and the restricted size of the local market. One certain advantage is that many Israeli university graduates are likely to become IT entrepreneurs or join startups, about twice as much as US university graduates, who are also attracted to traditional corporate executive positions, according to Charles Holloway
, co-director of the Center for Entrepreneurial Studies and a professor at the Stanford Graduate School of Business
of Stanford University
. ICQ
, for instance, is one of the world's most famous Israeli software products, developed by 4 young entrepreneurs . IBM has its IBM Content Discovery Engineering Team in Jerusalem, which is part of a number of IBM R&D Labs in Israel.
Due to the small size of Israel, the concentration of hi-tech firms across much of the country is enough for it to be recognised as one large cluster. Most activity is located in the densely populated areas of metropolitan Tel Aviv
, Haifa
(Matam
), and Jerusalem (Technology Park, Malha
, Har Hotzvim
and JVP Media Quarter
in Talpiot
) although some secondary with additional activity include the corridor to Beer Sheba, including Kiryat Gat, and the Western Galilee, including Yokneam Illit
. In all, this is an area no larger than 6000 square kilometers, half of the extended Silicon Valley’s geographical coverage.
facilities in this region including the likes of Intel, IBM
, Google
, Hewlett-Packard
, Philips
, Cisco Systems
, Oracle Corporation
, SAP
, BMC Software
, Microsoft
, Motorola
and CA. Many Israeli high-tech companies are based in the region, including Zoran Corporation, CEVA, Inc., Aladdin Knowledge Systems
, NICE Systems
, Horizon Semiconductors
, RAD Data Communications
, Radware
, Tadiran Telecom
, Radvision
, Check Point Software Technologies
, Amdocs
, Babylon Ltd.
, Elbit, Israel Aerospace Industries and the solar thermal equipment designer and manufacturer Solel
, with most of them being listed on the NASDAQ
, which even has an Israel Index. Because of this, Israel is often referred to as the Silicon Wadi and is known to be second only to Silicon Valley
in the level of its innovation and ingenuity. In fact, Newsweek Magazine recently named Tel Aviv
as one of the world's top ten "Hot High-Tech Cities" . Intel developed its new dual-core Core Duo
processor at its Israel Development Center located at the Merkaz Ta'asiya ve'Meida (Matam - Scientific Industries Center) in the city of Haifa
. In 2006, more than 3,000 start-ups
were created in Israel, a number that is only second to the US.
industry in Israel can be traced to a government initiative in 1993 named the Yozma program (“Initiative” in Hebrew); which offered attractive tax incentives to any foreign venture-capital investments in Israel and offered to double any investment with funds from the government. As a result Between 1991 and 2000, Israel’s annual venture-capital outlays, nearly all private, rose nearly 60-fold, from $58 million to $3.3 billion; companies launched by Israeli venture funds rose from 100 to 800; and Israel’s information-technology revenues rose from $1.6 billion to $12.5 billion. By 1999, Israel ranked second only to the United States in invested private-equity capital as a share of GDP. And it led the world in the share of its growth attributable to high-tech ventures: 70 percent.
Though Israel's thriving venture capital industry played an important role in the booming high-tech sector, the financial crisis of 2007-2010 also affected the availability of venture capital locally. In 2009, there were 63 mergers and acquisitions
in the Israeli market worth a total of $2.54 billion; 7% below 2008 levels ($2.74 billion), when 82 Israeli companies were merged or acquired, and 33% lower than 2007 proceeds ($3.79 billion) when 87 Israeli companies were merged or acquired.
Israel’s venture capital industry has about 70 active venture capital funds, of which 14 international VCs with Israeli offices. Additionally, there are some 220 international funds, including Polaris Venture Partners
, Accel Partners
and Greylock Partners, that do not have branches in Israel, but actively invest in Israel through an in-house specialist.
In 2009, the Life Sciences
Sector led the market with $272 million or 24% of total capital raised, followed by the Software Sector with $258 million or 23%, the Communications sector with $219 million or 20%, and the Internet
sector with 13% of capital raised in 2009.
Israeli Coastal Plain
The Israeli coastal plain is the narrow coastal plain along Israel's Mediterranean Sea coast which houses 70% of the country's population. The plain extends north to south and is divided into a number of areas; the Plain of Zebulun , Hof HaCarmel , the Sharon plain , and the Plain of Judea The...
in Israel
Israel
The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...
, similar to Silicon Valley
Silicon Valley
Silicon Valley is a term which refers to the southern part of the San Francisco Bay Area in Northern California in the United States. The region is home to many of the world's largest technology corporations...
in California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
, in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. Silicon Wadi is considered second in importance only to its Californian counterpart. The area covers much of the country, although especially high concentrations of hi-tech industry can be found in the area around Tel Aviv
Tel Aviv
Tel Aviv , officially Tel Aviv-Yafo , is the second most populous city in Israel, with a population of 404,400 on a land area of . The city is located on the Israeli Mediterranean coastline in west-central Israel. It is the largest and most populous city in the metropolitan area of Gush Dan, with...
including small clusters around the cities of Ra'anana
Ra'anana
Ra'anana is a city in the heart of the southern Sharon Plain of the Central District of Israel with a population of 68,300, . Ra'anana is bordered by Kfar Sava on the east and Herzliya on the southwest...
, Petah Tikva
Petah Tikva
Petah Tikva known as Em HaMoshavot , is a city in the Center District of Israel, east of Tel Aviv.According to the Central Bureau of Statistics, at the end of 2009, the city's population stood at 209,600. The population density is approximately...
, Herzliya
Herzliya
Herzliya is a city in the central coast of Israel, at the western part of the Tel Aviv District. It has a population of 87,000 residents. Named after Theodor Herzl, the founder of modern Zionism, Herzliya covers an area of 26 km²...
, Caesarea, Haifa
Haifa
Haifa is the largest city in northern Israel, and the third-largest city in the country, with a population of over 268,000. Another 300,000 people live in towns directly adjacent to the city including the cities of the Krayot, as well as, Tirat Carmel, Daliyat al-Karmel and Nesher...
, the academic city of Rehovot
Rehovot
Rehovot is a city in the Center District of Israel, about south of Tel Aviv. According to the Israel Central Bureau of Statistics , at the end of 2009 the city had a total population of 112,700. Rehovot's official website estimates the population at 114,000.Rehovot was built on the site of Doron,...
and its neighbour Rishon Le Zion. More recently, clusters have been established around Jerusalem, as well as towns such as Yokneam Illit
Yokneam Illit
Yokneam Illit , also Yoqne'am Illit and Jokneam Illit is a city southeast of Haifa in northern Israel. It is located in a hilly region of the lower Galilee, bordered by Highway 70 and Mount Carmel. Yokneam Illit is at the base of the Carmel Mountains and overlooks the Jezreel Valley, from Haifa...
and Israel's first "private city", Airport City, near Tel Aviv
Tel Aviv
Tel Aviv , officially Tel Aviv-Yafo , is the second most populous city in Israel, with a population of 404,400 on a land area of . The city is located on the Israeli Mediterranean coastline in west-central Israel. It is the largest and most populous city in the metropolitan area of Gush Dan, with...
.
Origin of the term
Silicon Wadi is a pun based on the CaliforniaCalifornia
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
n region of Silicon Valley
Silicon Valley
Silicon Valley is a term which refers to the southern part of the San Francisco Bay Area in Northern California in the United States. The region is home to many of the world's largest technology corporations...
. "Wadi
Wadi
Wadi is the Arabic term traditionally referring to a valley. In some cases, it may refer to a dry riverbed that contains water only during times of heavy rain or simply an intermittent stream.-Variant names:...
" is the Arabic word for a dry river bed.
History
Israeli hi-tech firms originally began to form in the 1960s. In 1961 ECI TelecomECI Telecom
ECI Telecom Ltd is a global telecom networking infrastructure provider headquartered in Petah Tikva, Israel. It provides communications platforms and solutions to carriers and service providers, cable/multiple system operators, wireless/cellular service providers, utilities and carrier of carriers,...
was founded, followed in 1962 by Tadiran
Tadiran
Tadiran refers to a former Israeli conglomerate, which was founded in 1962 by the merger of two companies, Tadir and Ran...
and Elron Electronic Industries
Elron Electronic Industries
Elron Electronic Industries is a technology holding company based in Haifa Israel; since 1962 the company has been involved in setting-up, funding and developing over 30 companies and is considered one of the foundation stones of the high-tech industry in Israel...
regarded by many to be the "Fairchild of Israel." The number internationally successful firms grew slowly, with only one or two new successful firms each year until the early 1990s. Motorola was the first US corporation to set up an R&D unit in Israel, in 1964. The center initially developed wireless products including remote irrigation systems and later developed leading chips such as the 68030. Following the 1967 French arms embargo, Israel was forced to develop a domestic military industry, focusing on developing a technological edge over its neighbors. Some of these military firms started to seek and develop civilian applications of military technology. In the 1970s more commercial innovations began, many of which were based on military R&D, including: Scitex digital printing systems which were based on fast rotation drums from fast-rotation electronic warfare systems., Elscint
Elscint
Elscint Ltd. was an Israeli technology company that development, manufacture and sold medical imaging solutions, including: Nuclear medicine, computed tomography magnetic resonance imaging and X-ray scanners. Elscint's shares traded on the NASDAQ as well as on the Tel Aviv Stock Exchange. At its...
, which developed innovative medical imaging
Medical imaging
Medical imaging is the technique and process used to create images of the human body for clinical purposes or medical science...
and became a leading force in its market.
World software market takes off
Slowly, the international computing industry shifted the emphasis from hardware (in which Israel had no comparative advantage) to software products (in which human capital plays a larger role). The country became one of the first nations to compete in global software markets. By the 1980s a diverse set of software firms had developed. Each found niches which were not dominated by US firms and between 1984 and 1991 "pure" software exports increased from $5 million to $110 million. Many of the important ideas here were developed by graduates of MamramMAMRAM
Mamram , abbreviation for Center of Computing and Information Systems , originally Center of Computing and Mechanized Registration is the Israel Defense Forces' central computing system unit, providing data processing services for all arms and the general staff of the IDF...
, the Israeli computer corps, established by the IDF
Israel Defense Forces
The Israel Defense Forces , commonly known in Israel by the Hebrew acronym Tzahal , are the military forces of the State of Israel. They consist of the ground forces, air force and navy. It is the sole military wing of the Israeli security forces, and has no civilian jurisdiction within Israel...
in the 1960s.
Hi-tech firms continued to struggle throughout this period with marketing and many products, such as a mini-computer developed in the 1970s by Elbit, who were unable to successfully commercialise the product.
The 1990s saw the real takeoff of hi-tech industries in Israel, with international media attention increasing awareness of innovation in the country. Growth increased, whilst new immigrants from the Soviet Union increased the available hi-tech workforce. Peace agreements including the 1993 Oslo Peace Accord increased the investment environment and Silicon Wadi began to develop into a noticeable hi-tech cluster.
Silicon Wadi today
For more than 40 years local demand fueled Israeli industrial expansion, as the country's population grew rapidly and the standard of living rose. More recently, world demand for Israeli advanced technologies, software, electronics, and other sophisticated equipment has stimulated industrial growth. Israel's high status in new technologies is the result of its emphasis on higher educationHigher education
Higher, post-secondary, tertiary, or third level education refers to the stage of learning that occurs at universities, academies, colleges, seminaries, and institutes of technology...
and research and development. Cultural factors contributing to the expansion includes chutzpah
Chutzpah
Chutzpah is the quality of audacity, for good or for bad, but it is generally used negatively. The Yiddish word derives from the Hebrew word , meaning "insolence", "audacity". The modern English usage of the word has taken on a broader meaning, having been popularized through vernacular use in...
and openness to immigration. The government also assists industrial growth by providing low-rate loans from its development budget. The main limitations experienced by industry are the scarcity of domestic raw materials and sources of energy and the restricted size of the local market. One certain advantage is that many Israeli university graduates are likely to become IT entrepreneurs or join startups, about twice as much as US university graduates, who are also attracted to traditional corporate executive positions, according to Charles Holloway
Charles Holloway
Charles Holloway was an English professional cricketer who played first-class cricket from 1816 to 1822. He played for Hampshire and made 13 known appearances in first-class matches...
, co-director of the Center for Entrepreneurial Studies and a professor at the Stanford Graduate School of Business
Stanford Graduate School of Business
The Stanford Graduate School of Business is one of the professional schools of Stanford University, in Stanford, California and is broadly regarded as one of the best business schools in the world.The Stanford GSB offers a general management Master of Business Administration degree, the Sloan...
of Stanford University
Stanford University
The Leland Stanford Junior University, commonly referred to as Stanford University or Stanford, is a private research university on an campus located near Palo Alto, California. It is situated in the northwestern Santa Clara Valley on the San Francisco Peninsula, approximately northwest of San...
. ICQ
ICQ
ICQ is an instant messaging computer program, which was first developed and popularized by the Israeli company Mirabilis, then bought by America Online, and since April 2010 owned by Mail.ru Group. The name ICQ is a homophone for the phrase "I seek you"...
, for instance, is one of the world's most famous Israeli software products, developed by 4 young entrepreneurs . IBM has its IBM Content Discovery Engineering Team in Jerusalem, which is part of a number of IBM R&D Labs in Israel.
Location
Tel Aviv
Tel Aviv , officially Tel Aviv-Yafo , is the second most populous city in Israel, with a population of 404,400 on a land area of . The city is located on the Israeli Mediterranean coastline in west-central Israel. It is the largest and most populous city in the metropolitan area of Gush Dan, with...
, Haifa
Haifa
Haifa is the largest city in northern Israel, and the third-largest city in the country, with a population of over 268,000. Another 300,000 people live in towns directly adjacent to the city including the cities of the Krayot, as well as, Tirat Carmel, Daliyat al-Karmel and Nesher...
(Matam
Matam, Haifa
Matam , located at the southern entrance to Haifa, is the largest and oldest dedicated hi-tech parks in Israel...
), and Jerusalem (Technology Park, Malha
Jerusalem Technology Park
Jerusalem Technology Park , also Malha Technology Park is a high-tech industrial park located in Malha neighborhood in southhwest Jerusalem, Israel....
, Har Hotzvim
Har Hotzvim
Har Hotzvim , also Campus of Science-Rich Industries is a high-tech industrial park located in northwest Jerusalem, Israel. It is the city's main zone for science-based and technology industries, among them Intel, Teva, Amdocs, NDS, Ophir Optronics, Sandvine, Radware and IDT Global Israel...
and JVP Media Quarter
Jerusalem Venture Partners
Jerusalem Venture Partners is an Israeli-based venture capital firm, with offices in the JVP Media Quarter in Jerusalem and in New York City.-History:...
in Talpiot
Talpiot
Talpiot , is a neighborhood in southeast Jerusalem, Israel, established in 1922 by Zionist pioneers.-Etymology:The name Talpiot derives from a verse in Song of Songs 4:4 – "Thy neck is like the tower of David, built with turrets." According to rabbinic sources, Talpiot refers to the Temple...
) although some secondary with additional activity include the corridor to Beer Sheba, including Kiryat Gat, and the Western Galilee, including Yokneam Illit
Yokneam Illit
Yokneam Illit , also Yoqne'am Illit and Jokneam Illit is a city southeast of Haifa in northern Israel. It is located in a hilly region of the lower Galilee, bordered by Highway 70 and Mount Carmel. Yokneam Illit is at the base of the Carmel Mountains and overlooks the Jezreel Valley, from Haifa...
. In all, this is an area no larger than 6000 square kilometers, half of the extended Silicon Valley’s geographical coverage.
Economy
Many international technology companies have research and developmentResearch and development
The phrase research and development , according to the Organization for Economic Co-operation and Development, refers to "creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of...
facilities in this region including the likes of Intel, IBM
IBM
International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...
Google
Google Inc. is an American multinational public corporation invested in Internet search, cloud computing, and advertising technologies. Google hosts and develops a number of Internet-based services and products, and generates profit primarily from advertising through its AdWords program...
, Hewlett-Packard
Hewlett-Packard
Hewlett-Packard Company or HP is an American multinational information technology corporation headquartered in Palo Alto, California, USA that provides products, technologies, softwares, solutions and services to consumers, small- and medium-sized businesses and large enterprises, including...
, Philips
Philips
Koninklijke Philips Electronics N.V. , more commonly known as Philips, is a multinational Dutch electronics company....
, Cisco Systems
Cisco Systems
Cisco Systems, Inc. is an American multinational corporation headquartered in San Jose, California, United States, that designs and sells consumer electronics, networking, voice, and communications technology and services. Cisco has more than 70,000 employees and annual revenue of US$...
, Oracle Corporation
Oracle Corporation
Oracle Corporation is an American multinational computer technology corporation that specializes in developing and marketing hardware systems and enterprise software products – particularly database management systems...
, SAP
SAP AG
SAP AG is a German software corporation that makes enterprise software to manage business operations and customer relations. Headquartered in Walldorf, Baden-Württemberg, with regional offices around the world, SAP is the market leader in enterprise application software...
, BMC Software
BMC Software
BMC Software, Inc. is a multinational corporation specializing in Business Service Management software, with record annual revenue in fiscal 2009 of $1.87 billion...
, Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
, Motorola
Motorola
Motorola, Inc. was an American multinational telecommunications company based in Schaumburg, Illinois, which was eventually divided into two independent public companies, Motorola Mobility and Motorola Solutions on January 4, 2011, after losing $4.3 billion from 2007 to 2009...
and CA. Many Israeli high-tech companies are based in the region, including Zoran Corporation, CEVA, Inc., Aladdin Knowledge Systems
Aladdin Knowledge Systems
Aladdin Knowledge Systems was a company that produced software for digital rights management and Internet security. The company was by SafeNet Inc, in 2009. Its corporate headquarters are located in Belcamp...
, NICE Systems
NICE Systems
NICE Systems Ltd. , together with its subsidiaries, provides solutions that enable enterprises and security organizations to extract insight from interactions, transactions and surveillance....
, Horizon Semiconductors
Horizon Semiconductors
Horizon Semiconductors is a provider of integrated silicon solutions that enable the secured delivery of voice, video, data and multimedia to and throughout the home, the office and the mobile environment, serving the Consumer Electronics, Broadcast, Broadband Communication and home entertainment...
, RAD Data Communications
RAD Data Communications
RAD Data Communications is a privately held corporation, based in Tel Aviv, Israel, that designs and manufacturers specialized networking equipment.RAD Data Communications is a member of the RAD Group of companies.-History:...
, Radware
Radware
Radware , is a provider of integrated Application delivery, Network Security and Load balancing solutions based in Tel Aviv, Israel. Radware, which is a member of the Rad Group of companies, is a public company and its shares are traded on NASDAQ.- History :...
, Tadiran Telecom
Tadiran Telecom
Tadiran Telecom Ltd is a telecommunications company which offers enterprises complete converged communications solutions that support voice, data, video and advanced applications. It is represented by a global network of more than 200 distributors and affiliates in 40 countries.The corporate...
, Radvision
Radvision Ltd.
RADVISION., founded in 1992, is a Nasdaq and Tel Aviv Stock Exchange-traded company, which is a component of the TA-100 Index of the largest 100 companies traded on the Tel Aviv Stock Exchange by market cap, it provides products and technologies for videoconferencing, video telephony, and the...
, Check Point Software Technologies
Check Point
Check Point Software Technologies Ltd. is a global provider of IT security solutions. Best known for its firewall and VPN products, Check Point first pioneered the industry with FireWall-1 and its patented stateful inspection technology...
, Amdocs
Amdocs
Amdocs Limited is a provider of software and services for billing, customer relationship management , operations support systems...
, Babylon Ltd.
Babylon (program)
Babylon is a computer dictionary and translation program for Microsoft Windows, developed by Babylon Ltd., an Israeli public company .-History:...
, Elbit, Israel Aerospace Industries and the solar thermal equipment designer and manufacturer Solel
Solel
Solel Solar Systems Ltd. is an Israeli solar thermal equipment designer and manufacturer based in Beit Shemesh, Israel. Solel makes equipment for solar thermal power plants, facilities that use the sun's heat to create steam and turn an electricity generator....
, with most of them being listed on the NASDAQ
NASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
, which even has an Israel Index. Because of this, Israel is often referred to as the Silicon Wadi and is known to be second only to Silicon Valley
Silicon Valley
Silicon Valley is a term which refers to the southern part of the San Francisco Bay Area in Northern California in the United States. The region is home to many of the world's largest technology corporations...
in the level of its innovation and ingenuity. In fact, Newsweek Magazine recently named Tel Aviv
Tel Aviv
Tel Aviv , officially Tel Aviv-Yafo , is the second most populous city in Israel, with a population of 404,400 on a land area of . The city is located on the Israeli Mediterranean coastline in west-central Israel. It is the largest and most populous city in the metropolitan area of Gush Dan, with...
as one of the world's top ten "Hot High-Tech Cities" . Intel developed its new dual-core Core Duo
Intel Core 2
Core 2 is a brand encompassing a range of Intel's consumer 64-bit x86-64 single-, dual-, and quad-core microprocessors based on the Core microarchitecture. The single- and dual-core models are single-die, whereas the quad-core models comprise two dies, each containing two cores, packaged in a...
processor at its Israel Development Center located at the Merkaz Ta'asiya ve'Meida (Matam - Scientific Industries Center) in the city of Haifa
Haifa
Haifa is the largest city in northern Israel, and the third-largest city in the country, with a population of over 268,000. Another 300,000 people live in towns directly adjacent to the city including the cities of the Krayot, as well as, Tirat Carmel, Daliyat al-Karmel and Nesher...
. In 2006, more than 3,000 start-ups
Startup company
A startup company or startup is a company with a limited operating history. These companies, generally newly created, are in a phase of development and research for markets...
were created in Israel, a number that is only second to the US.
Importance
The importance of Silicon Wadi was first recognised internationally by Wired magazine, who in 2000, ranked locations by the strength of cluster effects, giving the Israeli high-tech cluster the same rank as Boston, Helsinki, London, and Kista in Sweden, second only to the Silicon Valley. In 2007, the Economist considered Silicon Wadi to be second in importance only to its Californian counterpart.Israel venture capital industry
The origins of the now thriving Venture CapitalVenture capital
Venture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...
industry in Israel can be traced to a government initiative in 1993 named the Yozma program (“Initiative” in Hebrew); which offered attractive tax incentives to any foreign venture-capital investments in Israel and offered to double any investment with funds from the government. As a result Between 1991 and 2000, Israel’s annual venture-capital outlays, nearly all private, rose nearly 60-fold, from $58 million to $3.3 billion; companies launched by Israeli venture funds rose from 100 to 800; and Israel’s information-technology revenues rose from $1.6 billion to $12.5 billion. By 1999, Israel ranked second only to the United States in invested private-equity capital as a share of GDP. And it led the world in the share of its growth attributable to high-tech ventures: 70 percent.
Though Israel's thriving venture capital industry played an important role in the booming high-tech sector, the financial crisis of 2007-2010 also affected the availability of venture capital locally. In 2009, there were 63 mergers and acquisitions
Mergers and acquisitions
Mergers and acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or...
in the Israeli market worth a total of $2.54 billion; 7% below 2008 levels ($2.74 billion), when 82 Israeli companies were merged or acquired, and 33% lower than 2007 proceeds ($3.79 billion) when 87 Israeli companies were merged or acquired.
Israel’s venture capital industry has about 70 active venture capital funds, of which 14 international VCs with Israeli offices. Additionally, there are some 220 international funds, including Polaris Venture Partners
Polaris Venture Partners
Polaris Venture Partners is a venture capital firm specializing in seed and early stage investments particularly in companies engaged in the information technology and life sciences sectors....
, Accel Partners
Accel Partners
Accel Partners is a global venture and growth equity firm funding companies from inception through the growth stage.The firm is based in Palo Alto, California with major offices in Bangalore, Beijing, London, and Shanghai....
and Greylock Partners, that do not have branches in Israel, but actively invest in Israel through an in-house specialist.
In 2009, the Life Sciences
Life sciences
The life sciences comprise the fields of science that involve the scientific study of living organisms, like plants, animals, and human beings. While biology remains the centerpiece of the life sciences, technological advances in molecular biology and biotechnology have led to a burgeoning of...
Sector led the market with $272 million or 24% of total capital raised, followed by the Software Sector with $258 million or 23%, the Communications sector with $219 million or 20%, and the Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
sector with 13% of capital raised in 2009.
See also
- Economy of IsraelEconomy of IsraelThe economy of Israel is a technologically advanced market economy, including a rapidly-developing high-tech and service sectors. As of 2010, Israel has the 24th largest economy in the world, and ranks 15th among 169 world nations on the UN's Human Development Index, which places it in the category...
- Science and technology in IsraelScience and technology in IsraelScience and technology in Israel is one of the country's most developed sectors. The percentage of Israelis engaged in scientific and technological inquiry, and the amount spent on research and development in relation to gross domestic product , is amongst the highest in the world...
- List of Israeli companies quoted on the Nasdaq
- Start-up Nation: The Story of Israel's Economic Miracle
External links
- Israel’s Silicon Wadi: The forces behind cluster formation — by Catherine de Fontenay and Erran Carmel, June 2002
- Hi-Tech Opportunities in Israel — Israel Ministry of Foreign Affairs, May 2002
- Wireless Valley, Silicon Wadi and Digital Island – Helsinki, Tel Aviv and Dublin and the ICT global production network — by Stephen Roper and Seamus Grimes, March 2005. (Subsequently published in Geoforum)
- Alta Tecnologia nella Silicon Wadi Andrea Lawendel, LineaEDP
- Israel's new economic challenge. Dominic Casciani, BBC News
- American University: Israel: ICT Geographics
- Wadiwallah — Silicon Valley's community portal
- VC Cafe — A blog by Eze Vidra, dedicated to covering Israeli startups and venture capital investments in the Silicon Wadi