88 / 114
88 The US-Israel Legal Review 2019
ISRAEL: HI-TECH
I
srael’s hi-tech ecosystem is known worldwide.
With a growing number of investment, exits,
start-ups and more NASDAQ listed companies than
any country in the world (except for US and China),
we thought it would make sense to analyze the key
reasons Israel is a global innovation powerhouse.
The first reason can be attributed to the Israeli
Defense Forces (the “IDF”). The IDF is known
for producing cutting-edge technologies for its
security needs, such as algorithms, electronic
devices, big data, cybersecurity, image processing
and others. In Israel, military service is compulsory
so most young Israeli men and women serve in the
military between the ages of 18-21, and during
their military service many are trained to develop
and use these technologies. When discharged from
themilitary, they look for non-military use for these
technologies, which leads to the establishment of
new start-ups or the joining of such skilledminds to
existing ones. The second reason can be attributed
to the Israeli academic institutions, which are
renowned for their advanced academic research
in various fields of medicine and technology and
their close collaboration with tech companies in
Israel, which leads to the creation of skilled and
expert Israeli engineers graduating from such
academic institutions. The third reason which is
worth mentioning is the contribution of the Israeli
government to the start-up ecosystem. For example,
in 1993 the Israeli government established the
Yozmaprogram–a successful government initiative
that helped establish the Israeli venture capital
industry through government support granted to
VC funds. Another example is the Israeli Innovation
Authority (the “IIA”, formerly known as the Office
of the Chief Scientist) which is a governmental
authority that provides funding for R&D to Israeli
companies. This surely explains why
ISRAELI HI-TECH IN NUMBERS –
SUMMARY OF 2018
The Israeli hi-tech industry has grown andmatured
in recent years, showing a steady growth in almost
every aspect. 2018 was no exception in this regard,
and we can safely say that the past year has been
another successful one, with some impressive
numbers in both terms of investments and exits.
As for investments, we continued to see a
consistent growth following previous years.
According to IVC Research Center report, a total
The Israeli Hi-Tech Industry
in2018
Israel is a global innovation powerhouse with a world-
renowned hi-tech industry. Shibolet analyzes the reasons for
this remarkable rise.
S H I BOL E T
WITH
RAVED, MAGRISO, BENKEL & CO.
The Israeli government has
helped establish the country’s
venture capital industry by
supporting VC funds.