ISRAEL'S PERFECT TECH STORM

Israel has come out of nowhere to become one of the world's preeminent high-tech centers. While about 26 percent of Europe's exports are high-tech, Israel's high-tech exports have reached an astounding 55 percent of its foreign sales. Israel boasts many world-class high-tech companies, Saifun, Amdocs, Check Point and Comverse among them.

In fact, Israel has more high-tech companies listed on the NASDAQ than any country other than the U.S. and Canada. More than France, Germany and Italy, which seem far more preoccupied with exporting subsidized cotton, sugar and wheat to poor countries. Big American companies like IBM, Motorola and Cisco have major research centers in Israel, which has been dubbed "the second Silicon Valley."

All this seems hard to believe because Israel is so tiny, boasting fewer than seven million people on a good day.

How did the Israeli miracle happen?

There was a perfect high-tech storm created by the intersection of six smaller storms:

• Storm 1 was high-tech pump priming in the 1970s by the Israeli government and the private BYRD foundation, along with the encouragement of Russia's high-tech stars to emigrate to Israel after the Soviet Empire fell. Israel simply copied the Americans and Soviets -- who grabbed up as many German scientists as they could after the demise of Nazi Germany in World War II.
• Storm 2 is the powerful high-tech talent sort conducted by Israel's army, which gets everyone in its clutches at age 18. The army gives potential engineers and scientists projects to run and encourages them to keep the rights to the intellectual property they develop. As these talented draftees leave the army and enter the university system, they already are equipped with both desire and experience. This gives them a big leg up on American students who enter college based on grade point averages, SATs and after-school activities.

Can you imagine Harvard or Oxford using the U.S. and British armies to draft 18 year-olds and sort them into potential scientists and engineers? All those ultra-liberal professors would have hissy fits.

• Storm 3 is the small size of Israel's home market, which forces high-tech students into the mentality of global thinking. All know that if they are going to make it, they must be able to compete against the world, especially America. It's a discipline that can't be found in Europe, where large home markets and protectionist governments tend to severely restrict global thinking.
• Storm 4 is Israel's lack of land and resources, which keeps ambitious young people from developing "Australian Syndrome" -- a disease that pushes young people into farming, ranching and mining. Instead, young Israelis are channeled toward high-tech careers. Besides, if you ever worked in a hot, dry kibbutz, you too would leap at the chance to design systems in a nice, air-conditioned office.
• Storm 5 is Israel's perpetual risk of attack by the Arabs. This is a risk that deals with threats against life itself. Compared with that, business risks seem pretty tame to the average Israeli. As a result, Israel's young are driven by a culture of risk-taking, resulting in a number of business start-ups that's completely out of proportion to the employed population. Although the Singapore government has launched major efforts to make its island a biotech center, the effort has stalled under the heavy weight of a conformist culture which frowns on risk-taking. Deviate from society's norms and you lose face. Deviate too much and you might be in for a public caning.
• Storm 6 is Israel's cultural drive for success, which is defined more by achievement and less by money. As a result, 30 percent of Israel's start-ups are made by repeat entrepreneurs. This contrasts with America, where success is defined as "making a pile" and moving to Naples, Florida, which results in too many crowded golf courses and too few new enterprises. Only five percent of U.S. start-ups are made by repeat entrepreneurs.

The result of this perfect high-tech storm is a huge pool of engineers. On an proportional employed population basis, Israel boasts more than twice the engineers found in the U.S., more than four times the engineers found in Britain, and more than six times the engineers found in Singapore.

While the Israeli government is busy creating a increasingly formidable high-tech base, what are other people doing? Well, France's Chirac is spending his time defending socialism and agricultural subsides. England's Blair is scurrying about protecting the billions in special common market rebates Britain enjoys. The USA's Bush is busy running up huge deficits and defending the lies he told getting us into Iraq. Harvard's Sommers is engaged in telling women they have no talent for science and math, thus discouraging half of America's workforce. And Singapore's .... Oh, well, you get the idea.

When Israel was developing the electric scout and combat drones which now fly over Iraq and Afghanistan, the USA was developing the Cheney drone which floats over the public airwaves.