Start-up Nation Story of Israel s Economic Miracle Authored

Start-up Nation Story of Israel’s Economic Miracle Authored by Dan Senor & Saul Sanger By Dr T. H. Chowdary Director: Center for Telecom Management and Studies Chairman: Pragna Bharati (intellect India ) Former: Chairman & Managing Director Videsh Sanchar Nigam Limited & Information Technology Advisor, Government of Andhra Pradesh T: +91(40) 6667 -1191(O) 2784 -3121® F: +91 (40) 6667 -1111 hanuman. chowdary@tcs. com Talk @ TCS : Hyderabad , 24 June 2010

Israel • Israel refounded on May 1948 after about 2000 years of expulsion of its people by Imperial Rome. • UN Partition Resolution of Nov 1947 to create 2 -States Israel & Palestine on surrender of League of nations Mandate by Britain unable to cope with 3 -sided battles- Jews X Arabs X British Soldiers THC_CTMS S 446_June 2010 2

Israel Arab territory • Arab nations attack in 1948, soon after Israel declares independence, spawning the Palestinian refuge crisis. Israel wins both the war and territory . Source: Timeasia, 25 March 2002 1949 1948 -49 War

Israel Occupied territories • Egypt, Jordan and Syria mobilize against Israel, which thwarts the attack, taking over the West Bank, Sinia, Gaza and the Golan Heights. . Source: Timeasia, 25 March 2002 1967 The Six-Day War

Eretz Israel • Israel is home to about 4 million immigrant Jews from over 100 countries & 75 nationalities , most former USSR after collapse of communism • Revived Hebrew, the common language Hebrew, Arabic, Russian, English, German, Marathi & 15 other languages for a population of 7 mln (up from 0. 8 mln ion 1948) • Greatest Asset : Brain Power • Will to survive, thrive & triumph victory or death: NO DEFEET • About 10 political parties for 7 mln (i. e 1500 parties in India – Actually 740 are Regd. In India) • Israel’s population 808 K in ‘ 48 2. 4 m in ’ 51 • 1990 -2 k Russian Jews 800 K came • 150 K Iraqi Jews • 500 K Jews in Arab world • 49 K Yemeni Jews • 41 K Romanian Jews paid $ 112. 5 mln, $ 2800/per sec THC_CTMS S 446_June 2010 6

The Start-up Saga • 3850 start-ups, one for 1844 Israelis (India should have 6, 16, 000 start-ups) • More Israeli companies listed on NASDAQ than all companies from the European continent ( 7 ml pop Vs 600 mln) • In 2008 per capita venture capital in Israel was – 2. 5 times USA; 30 times Europe; 80 times China; 350 times India! THC_CTMS S 446_June 2010 7

$ US Venture Capital Investments per Capita Source: The book, Start-up Nation- The Story of Israel’s Economic Miracle by Dan Senor and Saul Singer (Source: Dow Jones, Venture Source: Thomson Reuters; U. S. Central Intelligence Agency, World Fact Book, 2007, 2008 THC_CTMS S 446_June 2010 8 )

Percentage(%) of GDP Civilian R&D Expenditure (2000 -2005) Source: The book, Start-up Nation- The Story of Israel’s Economic Miracle by Dan Senor and Saul Singer Source: UNDO (United Nations Development Programme) Report, 2007/2008 THC_CTMS S 446_June 2010 9

Number of companies Companies on NASDAQ (2009) Source: The book, Start-up Nation- The Story of Israel’s Economic Miracle by Dan Senor and Saul Singer THC_CTMSSource: NASDAQ, http: www. nasdaq. com/asp; non. Us. Outpur. asp. may 2009 and S 446_June 2010 10

% change on previous year GDP Growth Rates Source: The book, Start-up Nation- The Story of Israel’s Economic Miracle by Dan Senor and Saul Singer (Source: “Miracles and Mirages, ” Economist, April 13, 2008; “GDP Growth Rates by Country and Region, THC_CTMS S 446_June 2010 1970 -2007, ” Swivel, http: //www. Swivel. com/data_columns/spreadsheet/2085677 11

Some Brilliant Ideas for Start-ups (1) • Oil-less world; co: Better place (All) Electric cars; Charging grid • A million parking place grid • Agassi raised $200 mln; 5 th largest start-up in the world. • Agassi’s Top-Tier start-up sold for $ 400 mln to SAP for Better place. THC_CTMS S 446_June 2010 12

Some Brilliant Ideas for Start-ups (2) • Pay Pal, the largest Internet payment system in the world • Fraud sciences co invented the Pay Paul • e-Bay $18 bln sales, 16, 000 employees around the world • Check- point: Israel start-up is $ 5 bln worth • Intel’s largest R&D unit located in Israel, headed by Israelis. • Google: Founder –Sergey Brin Russian Jew in US THC_CTMS S 446_June 2010 13

Some Brilliant Ideas & Start-ups (3) • • • CISCO’s R&D centuries in 1997 - 1 st outside US Fastest Router CRS#1 Library of Congress download in 4. 6 secs (a dial-up modem will take 82 years) CISCO spent $ 1. 2 bln to buy & invest in Israel ISCAR: Israel’s machine tool company Warren Buffet, 2 nd richest in world 52 hrs in Israel, bought ISCAR for $ 4. 5 bln – supplier to 67 countries Intel: Froman (Jew) left new design center in Haifa in Y 1974 with 5 chip design – Invest $ 3. 5 bln – 30 mn Xtors on a pin-head (Y 2006 Lebanon fired 4228 rockets in 60 days; 70/day) • Venture caps: BIRD, GEMINI : – Invested $ 250 mln in 780 projects – Sold: $ 8 bln ( 32 fold gain) • Israel venture Assn. – 45 venture capital funds – 240 venture companies investing in Israel THC_CTMS S 446_June 2010 14

Some Brilliant Ideas for Start-ups (4) The price of dependence – Charles Degave after 1967 war The Merkava Tank – 1978 Roll-out now 4 th Gen Nesher- Israel’s version of Mirage KFIR first flown in 1973 (bombed Iraq) Lavi fighter Jet Implantable, artificial pancreas to treat diabetes Pil. CAM: 18 photos/sec, for hours from deep within the intestines ( gastro-intestinal tract) Olympus makes cameras in a pill • Compugen – Human genome sequencing - Merck bought this co • • THC_CTMS S 446_June 2010 15

Some Brilliant Ideas for Start-ups (5) • Aespironics : Inhaler, credit card-sixe includes a breath powered wind turbine • Beta : 0: implantable “bio-reator” to replace the defective pancreas in diabetes patients • Trans. Pharma Medical: Drug delivery thr’ skin w/o injection • Pixar: Animation THC_CTMS S 446_June 2010 16

Arab Wars on Israel - Yet • • • Wars: 1948, 56, 67, 73, 82 & 2006 1967: Israel captured 3 times its area in Palestine Syria & Iran want to wipe out Israel off the face of eth world! Terrorists’ all the while 1948 -’ 70: GDP quadrupled population Tripled 1800 Jews joined allies in WWII (1939 -’ 45) Kibbutz 80 K people in 250 Kibbutz 2% Kibbutz produced 12% of exports 1981 Israel bombed & destroyed Iraq’s Nuclear facility & vous to do like-wise to Iran (Saudi’s, Egypt, Jordan, Bahrain etc agree!) THC_CTMS S 446_June 2010 17

Specialisations • • • Israel Aircraft Industries Drip irrigation in 1965 Netafim the global drip irrigation company 95% arid or hyper arid 70% of waste water is recycled ( 3 times the 2 nd place Spain with 23%) Negev – dugh half a mile, deep bore; came warm, sultry water. Prof Samuel Applebeum –Praise warm water Fish! 98 o water in ponds -Tilapia, barramuudi, sea-bas Mark Twain called it “ Barren Waste land” now there are 240 mln trees; 35/person; 4 mln trees in Negev Only country where desert is receding because of trees Forests on 12% of world’s arid lands will reduce carbon by 1 giga ton/year=1000, 500 MW coal plants Israeli economy grew – PCI 25% of US in 1950 60% of US in 1970 THC_CTMS S 446_June 2010 18

Remarkable Achievements (1) • Av. Standard of living in Israel in 1948 was equal to USA in Y 1800 Increased 50 fold in 60 years! (India 18 times) Unmatched in the history of the world despite fighting 5 wars and continuous terrorism • In 25 y, Israel increased Agri yields 17 times – 95% science; 5% work • As of Y 2005, israel is the 10 th largest producer of nuclear patents THC_CTMS S 446_June 2010 19

Remarkable Achievements (2) • Cell phone density 125% (India 60%) • Y 2002 -’ 05: Number of books xlated into Arabic in all Arab countries combined was 1/5 the number xlated into Greek in Greece • 1980 -2000 patents regd. • Israel- 7652; S. Arabia- 171; Egypt-77; Kuwait-52; UAE-32; Syria-21; Jordan-15 • Arabs have 200 varsities; Israel -12 • Exports $ 18. 1 bln I India $ 190 bln should be $ 2700 bln) • Publications: Economics: UK-2; Israel-I • Jews were 2% of Russia’s population, but 30% of doctors & 20% of engineers were Jews. • Israel has highest number of doctors/1000 population in the world. • Nation of Immigrants • Not brain-drain, but brain circulation THC_CTMS S 446_June 2010 20

Nobel Prizes • Jews around the world -167 • Jews in Israel (since 1948) -9 • USA*-320; UK*-117; France*-57; Russia- 23; Italy-20; Japan-16; Indians+-9; China-6 • 3000 Israeli Professors abroad * includes Jews with that country’s nationality + 2 are Indian citizens, 6 Indians outside India THC_CTMS S 446_June 2010 21

Source of Venture Israel Defence Forces: Failure is not sigma Bernard Shaw : If you have an apple and I have an apple and we exchange apples, then you and I will still each have one apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas • Talpiot- Pinnacle of Achievement comes from Bible’s Song of Songs • IDF elite Intelligence Unit- 8200 • • THC_CTMS S 446_June 2010 22

Talpiot- Pinnacle of achievement (From Bible’s Song of Songs) • Trigger: Debacle of the 1973 Yom Kippur War • Most intensive technology Trg, that varsities & Military can offer. • Each year top 2% (2000) of Israel’s High School tried • 10% (200 pass; put thro’ 2 days of personality and aptitude test • Accelerate varsity degree in Maths & Physics while introduced to tech needs of all branches of IDF. • Tested to penetrate a telecom network of a live terrorist cell THC_CTMS S 446_June 2010 23

Talpiot- Pinnacle of achievement (From Bible’s Song of Songs) • “Talpions” (like our IITians and more) • Only 650 in 30 years! • Are some of Israel’s top academics & founders of Israel’s most successful cos. • Eg: NICE- global corp. behind call monitoring sued by 85 of top 100 of Forbes’. • COMPUGEN – Human Genome decoding • 45% of Israelis are varsity educated- highest in the world • 109 scientific papers/ 10, 000 people • $ 6. 0 bln education/scholarship fund. • Has the largest number of scientists & engineers/ mln Pop. THC_CTMS S 446_June 2010 24

Dhanyawad: Thank You THC_CTMS S 446_June 2010 25