Posted on: Tuesday, December 2, 2003
Plugging away successful for Israel high-tech
By Josef Federman
Associated Press
TEL AVIV, Israel — During three years of political violence and a brutal global downturn, Israel's high-tech sector has been surprisingly resilient, churning out innovations such as Intel Corp.'s line of mobile-computing chips and systems that warn drivers they're falling asleep.
Now, after mass layoffs and recession, the industry is showing signs of returning to full health. Venture capital is returning to the country, companies are performing well and investor sentiment is improving.
Venture investment in Israeli high-tech companies has increased for three straight quarters, reaching $283 million in the most recent quarter, according to the IVC Research Center. However, that remains a far cry from the $1.1 billion raised in the same quarter three years earlier.
While activity slowed during the downturn, Israel's corporate research centers, obscure university labs, shadowy military tech units and scrappy startups still produced. Their high-tech work tends to focus in three areas: communications, software and life sciences.
Intel developed its new line of Centrino chips for wireless gadgets in Israel. Sphericon Ltd., a startup founded by an aeronautics expert, is developing a system that can alert drowsy drivers before they fall asleep by analyzing steering patterns.
Recently, scientists at the Technion-Israel Institute of Technology created a tiny self-assembling transistor using DNA. The project, touted as a crucial step in the development of nanoscale devices, could help build speedier computers.
A separate team of Technion students developed software that they say can identify computer users by their typing habits with 97 percent certainty. The system can be used to halt unauthorized users that get hold of a password, said Ran El-Yaniv, the Technion professor who helped supervise the project.
The technology might be used one day to prevent car thefts or airplane hijackings by monitoring drivers' and pilots' "signatures of behavior," he said.
How can Israel, with just 6 million people living in constant turmoil, produce many innovations? Among the reasons often cited: Many entrepreneurs come out of the military, which relies on a technological edge to outgun enemies.
Israel also has benefited from an influx of Russian scientists since the collapse of the Soviet Union. And Israel's tiny size forces companies to look beyond the local market.
GTek Technologies Ltd., whose software enables computers to fix themselves, uses its Israeli origins and the country's no-nonsense attitude as a selling point, said Arnon Catalan, vice president of business development.
"We have a different approach, much less focused on marketing and more focused on the product," he said.
