Israeli innovation cluster and its place in the global economy

“Never say it was not covered in the class , rather say it was mentioned” this was Dr Ariav’s advice to Gladiators; “mentioned” does not carry the burden of “covered in the class” nor does it carry the negativity of “not covered in the class”. Dr. Gadi Ariav, Associate Professor, Management of Technology and Information Systems, Faculty of Management, the Leon Recanati Graduate School of Business Administration, Tel Aviv University and academic advisor to Great Lakes talked about “Israeli innovation cluster and its place in the global economy (especially viz. India)”. 

Cluster is a hub of specific economic activity and lowers the risk of innovation. Bangalore, Gurgaon and Hyderabad would qualify as software clusters. Israel has emerged as a significant ICT(Information and Communication Technology)  innovation cluster with exceptional depth and breadth and remarkable resilience. Unlike U.S.A , India  and China which are condition setter economies , Israel is a condition taker economy. 

Israel with a population of 7.4 million and less than 500sq km area is a single ICT cluster (Silicon wadi) and is strategically managing global arbitrage. Some of the prominent features of silicon wadi are

  • 3000+ companies
  • 500 companies have annual revenue greater than $20 million
  • 200 new start-ups every year
  • 60 VC funds, about $10B raised since inception
  • 120 IL-based companies listed at NASDAQ
  • 80 Fortune 500 MNCs conduct R&D in IL
  • Areas of activity: software – 24%,telecom – 23%,industrial equipment – 18% defense systems – 13%,components – 13%,medical systems – 9%

Silicon wadi emerged as a ICT cluster because of some drivers which can be categorised as 

    a)      Necessity of military computing
    b)      Immigration culture
    c)      Higher Education
    d)      Government support programs
    e)      Active and sophisticated VC industry

Dr Ariav taught us to look at the world differently through clusters. He illustrated the concept with a case study by the end of the session. Throughout the talk he always maintained a rapport with the students through humour or theories; cultural difference was not perceptible. We look forward to many such visits by Dr Ariav.

Aarti Pandey

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