US Firms Eye Israel's 'Silicon Wadis' for Tech Investments

US Firms Eye Israel's 'Silicon Wadis' for Tech Investments - top government contractors - best government contracting event
Image: Melanie Gamarra

Fueled by venture-capital investment in industries like  communications, IT and green technology, Israel’s high-tech industry has in recent years become a worldwide leader, and more U.S. companies are eyeing the Middle Eastern nation for prospective investments.

Israel’s technology sector, which has been expanding at a 10-20 percent clip since 2003, has played an important part in the longest period of rapid economic growth in Israel’s 60 years of existence, according to Bloomberg.

The increasing prevalence of high-tech industrial parks, dubbed “Silicon Wadis” (from the Hebrew word for “canyon”), has contributed to that boom. Today, those parks host hundreds of foreign companies and long-standing Israel success stories such as Teva Pharmaceutical and defense technologies maker Elbit Systems.

Those parks—considered by many to be the world’s second-most important tech cluster—are also home to Intel, Microsoft, IBM and Google, which have all set up large local research and development facilities aimed at tapping the Israeli talent pool, Bloomberg said.

And just like its U.S. counterpart, Silicon Valley, there are plenty of well-funded venture-capital firms providing cash, The Economist pointed out. In 2007, VC firms invested $1.76 billion in Israel, which is less than one-fifth of the $10 billion or so invested in Silicon Valley. Although local funds make up more than 50 percent of the deals, nearly all the money comes from the United States, The Economist said.

Seeing potential profits in the Israeli high-tech market, Cisco Systems Inc. several years ago bought P-Cube Inc., a Tel Aviv developer of network-traffic-management hardware. But Cisco’s  love affair with Israeli high tech had begun much earlier when in the late 1990s it purchased Class Data Systems, a maker of quality-control software. Shortly thereafter, Cisco also spent nearly $1 billion for seven Israeli startups.

“[The Israelis] have a strong tradition of innovation in engineering and a strong technical tradition. It’s similar to what we see in Silicon Valley,” Ned Hooper, senior director for corporate development for Cisco, told Bloomberg in an interview.

With the buzz surrounding cybersecurity, Israel has also positioned itself as a leader in Internet defenses. Earlier this month, Deputy Prime Minister Dan Meridor said “the cyber world … becomes more important in the conflict between nations. It is a new battleground, if you like, not with guns but with something else.”

Although there are reportedly tens of thousands of attempted cyber attacks on Israeli systems each week, experts say Israel is “well equipped“ to fight off an assault of viruses. Tal Hanan, CEO of Israeli security firm Demoman, told Israel National News the country has funneled large amount of  money and effort into avoiding these kinds of attacks, and its cybersecurity is “among the best in the world. We’ve become very good at cyber defense ““ and offense.“

Ernst & Young is one firm that has taken note of those claims. In January 2011, Kost, Forer, Gabbay & Kassierer, the organization’s member firm in Israel, acquired the professional services arm of Hacktics Ltd., an Israel-based cybersecurity company.

And with the worldwide attention on Silicon Wadis and investment opportunities in the Promised Land, it shouldn’t take long for other U.S. firms to follow.

You may also be interested in...

GSA Eyes “˜On-Ramp' Solicitation for OASIS Small Business IDIQ's Six Subpools - top government contractors - best government contracting event

GSA Eyes “˜On-Ramp' Solicitation for OASIS Small Business IDIQ's Six Subpools

The General Services Administration has announced plans to issue a solicitation as an on-ramp for the six subpools of the One Acquisition Solution for Integrated Services Small Business contract vehicle. GSA's Federal Acquisition Service said in a presolicitation notice published Friday that it expects to award 30 contracts for subpool 1, 20 contracts for subpool 3 and eight each for subpools 2, 4, 5B and 6 of the OASIS SB indefinite-delivery/indefinite-quantity contract.

SSL to Design Methane Emission Detection Satellite; Richard White Quoted - top government contractors - best government contracting event

SSL to Design Methane Emission Detection Satellite; Richard White Quoted

Maxar Technologies' SSL subsidiary has received a contract from Environmental Defense Fund to design and define requirements for a small satellite designed to detect and monitor methane emissions from oil and gas facilities worldwide. MethaneSAT is a small form-factor satellite that will work to provide high-resolution images to help detect and measure low- and high-emission sources in regions that constitute more than 80 percent of global production of oil and gas per week, Maxar said Thursday

Booz Allen's Sarah St. Clair on Lessons Learned From HR Tech Upgrade Project - top government contractors - best government contracting event

Booz Allen's Sarah St. Clair on Lessons Learned From HR Tech Upgrade Project

Sarah St. Clair, vice president responsible for human resource services at Booz Allen Hamilton, told Diginomica in an interview published Tuesday about the company's experiences and efforts to address challenges associated with upgrading its HR technology system. St. Clair discussed Booz Allen's move to execute the Workday project to manage recruitment operations and mentioned some of the actions the company made to mitigate negative impacts associated with project implementation.