BUSINESS I-m-1
Home Security
From The Battlefield
To The Marketplace
JOEL BAINERMAN
Special to The Jewish News
I
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48
FRIDAY, JULY 26, 1991
Israeli electronics corn-
panies have earned a
position at the cutting
edge of the world's electronics
industry. Companies- like
Scitex (computerized printing
graphics) and Optrotech
(visual inspection of PCBs)
pioneered technologies and
still remain the undisputed
technological leader in their
fields.
Of the 18 Israeli companies
whose shares are traded on
the Over The Counter ex-
change, 10 are in the field of
electronics.
The roots of these com-
panies and their founders lie
in the Israel Defense Forces
(IDF), probably - the tightest
and most efficient fighting
force the modern battlefield
has ever seen. For industry,
the Israeli army serves as an
anchor, drawing together the
best people from industry,
academia and the R&D
institutions.
The IDF is also responsible
for much of the entrepreneu-
rial and high-tech develop-
ment in Israel. For instance,
the "systems approach" the
Israel Defense Forces instills
in its recruits is responsible
for much of the innovative
R&D.
Meir Liesar, managing
editor of ECI Telecom Ltd., a
Tel-Aviv-based telecom-
munications manufacturer,
observes that when new elec-
tronics equipment is received
from the :U.S., it is immediate-
ly incorporated into existing
systems.
It's possible added-value is
always on the engineers'
minds. By thinking in terms
of "systems" in civilian pro-
ducts, such as in ECI
Telecom's own digital loop
communications systems, dif-
ferent technological
disciplines blend in well
together, such as software, op-
tics and hardware.
Dr. Shlomo Burak, CEO of
Optrotech Ltd., a leading
developer and manufacturer
for optical-inspection systems
for the computer industry,
reveals that the training
systems of the Israeli army
place a great deal of emphasis
on flexibility and
improvision.
To grasp the situation in a
very wide context and to look
for. a unique way to solve the
problem, he says that smart
engineering is the key.
"By smart engineering I
mean to accurately define a
problem and to devise a solu-
tion," Dr. Burak says. "Then
the key is to take known
technologies and well-
developed products and to
build a smart system. In the
army, engineers are given the
necessary building blocks,
sophisticated equipment from
the U.S., and told to incor-
porate that equipment into a
different configuration, to add
value to it. That is smart
engineering and it is
something of a trademark in
Israeli high technology com-
panies."
Jay Peter Sprague, Na-
tional SemiConductor's chair-
man of the board, has another
view. One of the reasons Na-
tured to think in terms of in-
novation and to the opening
of the mind," he says. "The
sparking of curiosity to ex-
plore new technologies could
be considered the IDF's major
contribution to entrepreneu-
rial development in the
civilian sector!'
While smart engineering is
certainly a factor in the
development of Israel's high-
tech industries, the country's
academic environment is also
an important pillar.
For instance, Israel boasts
one of the largest per-capita
researching bases in the
world. Israeli scientists
receive more second and third
degrees in the natural
sciences and write more first-
authored scientific articles
than in any other country in
the world.
Probably one of the most
important institutions con-
tributing to Israel's high-tech
development is the Bina-
tional Industrial Research
and Development Foundation
(BIRD) which was establish-
ed in 1977 with a $60 million
endowment by the two
governments. It cost-shares
50-50 with each company in a
U.S. company-Israel company
team that seeks to develop
and to commercialize any in-
novative technological pro-
duct. Direct sales of BIRD
projects are more than $500
million. The typical scenario
is the Israeli company perfor-
ming most of the R&D and
the American firm handling
the marketing.
Although BIRD doesn't
fund projects in the defense
field, Ed Malvsky, its ex-
ecutive director, says that
because every Israeli youth
serves in the army, the
younger generation put the
three years from 18-21 to
much better use than their
counterparts in the U.S. At
age 21 they are more mature,
serious, .and determined to
succeed. They don't enter col-
lege with a care-free, "what
am I going to do with my life
attitude. They oftentimes
know exactly what they want
to do and are mentally and
physicallyprepared for years
of hard work to achieve it. For
this reason, new graduates in
technical fields will usually
become contributing mem-
bers to R&D teams quicker in
Israel than elsewhere.
To a well-trained Israeli
soldier, next to a tank battle
with the Syrian army on the
Golan Heights, establishing
and managing a high-tech
start-up is a piece of cake.
.
.
"The sparking of
curiosity to
explore new
technologies could
be considered the
IDF's major
contribution."
Dan Tolkowsky
tional established a design -
center in Israel to design the
30532 chip is because Israeli
engineers are highly goal-
directed, and becauS'e of their
military training, says
Sprague, "extremely project
focused."
The IDF also influences the
managerial capabilities of its
recruits.
General (reserves) Ben-
jamin Peled, a former CEO of
Elscint and the driving force
behind Elbit Computers' suc-
cess, says that most successful
Israeli managers reached
high ranks in the Israel
Defense Forces.
"The IDF teaches one how
to employ middle manage-
ment, to delegate respon-
sibility to lower echelons," he
says. "This becomes crucial to
building a successful high-
tech enterprise, especially in
a country not known for its
great depth of managerial ex-
pertise."
Dan Tolkowsky is one of the
founding fathers of Israeli
high technology and is a
former Israel Air Force com-
mander. He says that one of
the reasons Israelis have been
so successful in high-tech is
that they like to take risks,
and aren't stigmatized when
they fail. Risk-taking, or 'try-
ing it a different way' Is
"routine" in Israel's armed
forces.
"In the army the personali-
ty of the population is nur-