Israel.com: Key Characteristics of Israel's High-Tech Industry Why has Israel, a small country with a relatively young population of six million inhabitants, emerged as a dynamic force in high technology? For many experts and specialists in Israel, the success of this country in the high-tech field is mainly due to the influences of the Israeli Defence Forces, the country's military industries, its military intelligence units, its research institutes, and its universities. The success of the UAV is one such example that is linked to the Israeli model of development. Case Study: Unmanned Air Vehicles ” UAVs Originally, the idea behind developing UAVs, also called drones, was to cut the loss of pilots to a minimum in the event of war, and to track enemy territory. Currently, drones are used for reconnaisance purposes, but major technological advancements are required before they can be used for combat purposes (mainly because these are rapidly changing situations in which human intelligence is more efficient than computers). The main world producers of UAVs are Teledyne Ryan Aeronautical and Northrop Grumman in the U.S., Target Technologies and A rospatiale in Europe, I.A.I. in Israel, Kentron in Africa, and Fuji Heavy Industries in Asia. An analysis of the industry reveals the following key elements of Israeli strategy: -
Succeeding at all costs in the long term by using technological innovation as a priority and establishing technological partnerships with foreign industrialists in order to make the best of technological know-how. -
Assimilating all technology and know-how without becoming victims of the "not invented here" syndrome; Israeli industrialists and scientists have no difficulty in integrating foreign know-how in their product development and are capable of using reverse engineering in a quasi-scientific manner (dismantling competitors ' products to rebuild them). -
Using economic and technological intelligence as a management tool: given the highly competitive nature of the industry, Israelis are closely watching and analyzing the operational strategies of other players in the market in order to compete . -
Turning toward civilian or military authorities for direct or indirect support (R&D financing, testing orders, tax exemptions, free trade zones, etc.). These authorities, working on tight research budgets , usually scatter orders across at least 20 companies thriving around the market leader, Israel Aircraft Industries (IAI). An increasingly keen and organized competition According to experts, the world market for UAVs should jump from revenues of almost $2.3 billion in 1998 to more than $4.31 billion in 2004. Once technological and regulatory issues are overcome to the satisfaction of the potential market, revenues should increase dramatically. Moreover, the market is forecast to become increasingly competitive, which will reduce the number of participants . The increasing maturity of technology in the UAV industry would lead to a reduction in the number of manufacturers, which currently range in size from market leaders such as IAI Malat Division and larger manufacturers such as Lockheed Martin to smaller national companies. It is also important to note that the Israelis start with new markets. Thus, Singapore Technologies has signed a $14 million contract with Israel's Emit Aviation Consultancy for the new Blue Horizon UAV and is set to develop its own larger, more powerful variant called Firefly. Israeli drones also find applications in new fields, such as mine detection and radar jamming. | It can be argued that Israel's major competitor in terms of entrepreneurship, creativity, hunger for innovation, love for change, and danger is Silicon Valley. On the other hand, many nations surpass Israel in terms of technology, management, marketing, and production. The entrepreneurial class is highly educated , multilingual, and nonpoliticized. Their origins are European and North American. They have little contact with Orthodox Jews or Arabs and have a youthful, outward looking, and flexible approach combined with a desire for growth and change and willingness to take risks that is specific to their culture. Through its rich and turbulent history, the country's confidence has strengthened until today its economic success is built on firm foundations. Israel has managed to create and develop an economic model with its own characteristics and strengths. The discussion above identified the main components of this model and the key success factors that have directly or indirectly enabled the emergence of what is today one of the most dynamic and interesting areas in the industrial world. The next section will discuss the role of entrepreneurship in the succes of Israel's high-tech model. |
