The Future of the Israeli HighTech Industry The Educational Challenge

1
The Future of the Israeli High-Tech IndustryThe
Educational Challenge

• June 16th 2005

Elisha Yanay Senior Vice President, Motorola
Inc. General Manager, Motorola Israel
Ltd Chairman- Israel Association of Electronic
and Information Industries
2
The Global High -Tech Industry in numbers

• Computer Services and Software 100B
• Computer office equipment 400B
• Electronic,electrical equipment 850B
• Network communication equipt. 140B
• Semiconductors 80B
• Telecommunication 1000B
• Total over
  3,000Billion !

Compiled from Fortune global
3
(No Transcript)
4
The Economic Growth is Solid
Real GDP Growth (Year-Over-Year Change)
5
Bottom Line The High Tech Expansion will
Continues

• 2005 will be a good (but not great) year
• Growth will remain uneven
• U.S is still strong -
• The weaker dollar is not a big threat
• No recession expected despite 55 oil
• The Hi-tech recovery continues

6
GDP around the world

• Israel
• 66b
• 2004 121b
• 2010 est. 145b

Israel
13
21
16.5k
7
Technology adoption curve

• Faster and faster adoption curve

Radio
TV
US percentage of ownership
Electricity
Telephone
PC
Number of years
Internet
Cell Phone
Sources IEC Resources, Gartner, NetRatings,
Scarborough Group
8
Yes ! Everything is Digital
Digital Hot Dog
9
The Broadband Revolution
10
(No Transcript)
11
(No Transcript)
12
MOTOROLA Sales sorted by countries
(additional 400k export)
13
Israel Electronic and Information Industry sales
M
14
ISRAEL ELECTRONICS INFORMATION
INDUSTRIES EMPLOYMENT AND MANPOWER STRUCTURE
66,300
62,000
58,800
57,200
56,200
54,800
53,400
53,500
53,400
50,500
45,000
42,700
39500
62
15
ISRAEL ELECTRONICS INFORMATION
INDUSTRIES SALES BY INDUSTRY GROUP 2004-15,3M
Medical Systems
Civilian Comm. Telecomm.
7.3
20.1
Software
26.6
14.7
Components
11.9
19.4
Industrial Equipment
Defense Systems
16
Distribution of High Tech companies including
start-up in Israel

• in telecom/communication 460
• in IT Enterprise Software540
• in Internet120

17
The High-Tech challenge 1996 to 2004
3,305Bn
The High Tech world
X 2
1,776Bn
1996
1997
1998
1999
2000
13Bn
Israel High Tech
0.3
X 2
6.5Bn
1996
1997
1998
1999
2000
29,000
Manpower
X 2
25,000
14,200
1996
1997
1998
1999
2000
18
The new challenge to 2010
19
HIGHER EDUCATION IN
ISRAEL ELECTRICAL COMPUTER ENGINEERING
COMPUTER SCIENCES
46
54
7700
5,200
2003
20
The World Engineering Picture
WW annual revenue 3,000B 10 RD 300B If cost
of engineer 100K 3M engineers If cost of
engineer 40K 7.5M engineers Average 5M
engineers
New Engineers/year China 400K India 400K Eastern
EU 200K Total newcomers 1M per year
21
Israel is number one in RD with 4.7 of GDP
Total annual new bachelors degree or higher
BusinessWeek Oct 11 2004
22
US versus China
(John Chambers- CEO of Cisco)

• For every new engineering graduate in the U.S,
  there are five in China.
• In China and India, they understand that if
• they get the engineers,
• then they get the managers,
• then they get the companies,
• then they get the innovation."

23
US
In Israel you need 5 in mathematics
24
Based on a model of leading indicators Ireland
and Israel appear to be headed toward
prominence as technology developer and exporter
in the global market
-National Orientation -Socio Economic
Infrastructure -Technological Infrastructure -Prod
uctive Capacity
Dominant
Israel
Sciences and Engineering Indicators NSB 2004
25
CRAIG BART Intel CEO ( visiting Israel )

• Apart from the 6,000 jobs that we have provided
  here, in my opinion the contribution to Israel
  lies in the fact that Intel has attracted other
  companies to invest in Israel and to create an
  entrepreneurial environment. Globally speaking,
  Israel is in 3rd place in terms of IP and is a
  very good place for opening businesses. The level
  of education in Israel has helped us expand.
  Israels ability to supply very good scientists
  has helped us, and the governments positive
  attitude has helped us attract investments.

26
(No Transcript)
27
(No Transcript)
28
What do we need to continue our success?

• Excel in our education aspire to being the best
  in the world
• Keep raising the bar in education
• Teach innovation and creativity
• Strengthen partnerships between academia and
  industry
• Support sophisticated, small ( 20-50 M)
  industries if you want to be large, gather
  together many small
• Government support should match or even exceed
  other countries incentive plans
• Keep pushing!

29
???? ?? ??????!!!