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High-Tech Project “Engineers from the Periphery”

High-Tech Project “Engineers from the Periphery”. Proposal for a national undertaking in Israel. Presented by: Yehuda Zisapel. Contribution of High-Tech to the Israeli Economy. Over 50% of Israel’s Exports, i.e. $16 B 21,300 engineers from a total of 60,000 workers Sales per worker: $300K

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High-Tech Project “Engineers from the Periphery”

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  1. High-Tech Project“Engineers from the Periphery” Proposal for a national undertaking in Israel Presented by: Yehuda Zisapel

  2. Contribution of High-Tech to the Israeli Economy • Over 50% of Israel’s Exports, i.e. $16 B • 21,300 engineers from a total of 60,000 workers • Sales per worker: $300K • High-Tech activity primarily in the center of the country Result: The country center becomes more wealthy and the socio-economic gap widens

  3. 20,000 18,700 M$ 18,000 16,700 15,800 15,500 16,000 14,750 13,170 13,040 14,000 11,530 12,000 10,380 9,980 10,000 7,800 8000 6,840 6,000 5,310 6000 4,596 4000 2000 0 Sales of Electronics and Software Products in Israel, 2007 Domestic Export

  4. Market Human Capital Money Capital High-Tech is the country’s Growth Engine

  5. US-based Information Technology as a Percentage of Nominal Business Capital Equipment Spending Source: Bureau of Economic Analysis, Morgan Stanley Technology Research Technological Markets on an upward trend • Israel now has a 1% market share of the worldwide technological market Conclusion: No market constraint regarding growth potential

  6. US$ Billion USA vs. Israel: Total Capital Invested in Venture-Backed Companies Source: Ernst & Young; VentureOne

  7. Summary: Conditions enabling the development of High-Tech Conditions: • Market – unlimited • Investment Capital – searches for qualitative technological ideas; also unlimited Bottleneck: • Human Capital – shortage of quality manpower and quality education Quality Human Resources to generate ideas and create investment opportunities is the Engine of High-Tech

  8. Developing Human Capital • Manpower increase from country center – growth potential: 5% • Manpower increase from the periphery – growth potential: 100% Conclusion: Development of High-Tech in the periphery using the Atidim Project as a model

  9. Atidim Model • Participants are high school graduates, pre-Army, from the periphery • Target Population: • Minimum personal attribute qualifications • “Bagrut” certificate – poor or none • No chance of acceptance to a college or university • Project Track: • Preparatory course (“mechina”) of one year • Conclusion of “mechina” and university entrance exams • Study in normal university courses • Track Record: • Student success rate: top 15% • IDF “Atudah” academic program

  10. Objective: to adopt “Atidim” model which has proved itself • Participants: • From the periphery • IDF veterans • Preference to combat unit veterans • Target number of participants: 1500 per year • University Partnering – Universities which have expressed their willingness to participate: • Technion • Hebrew University in Jerusalem • Tel Aviv University • Ben-Gurion University of the Negev • Bar Ilan University

  11. High Tech Project in the Periphery • Training & qualification of 1500 engineers from the periphery each year • Immediate budget of $16,500,000 per year to $82,500,000 fixed, after 5 years • Increase of High-Tech by $10B within 10 years Critical mass of quality manpower is the Engine of our economy:

  12. Contribution of a High Tech Engineer to the Employment Market № of Workplaces 5 4 3 2 1 № of Years in Employment 1 2 3 4

  13. Effect of High-Tech on Production & Employment Growth Additional Workers in High Tech Additional Production, Dollars, $M 18000 4500 Number of Engineers Additional Production, Dollars, $M 15000 3750 12000 3000 9000 2250 6000 1500 3000 750 № Years of Program (№ Years in Industry) 6 (1) 7 (2) 8 (3) 9 (4) 10 (5)

  14. Effect of the Program on Export Growth Accumulated Production Increase, $M № Years in Program

  15. Total Additional Workers in Economy 105600 78800 46200 19800 6600 1200 № Years in Program Effect of the Program on Employment Growth

  16. Return on Investment Income Tax Payments, $M 1200 1000 800 600 400 200 № of Years in the Program 6 7 8 9 10

  17. Periphery Center Socio-Economic Gap in Israel • Present Growth of High-Tech Industry – center of the country • Effect on Socio-Economic Gap – it widens

  18. Periphery Center Solution to Socio-Economic GapEngineers from the Periphery • Development of High-Tech in the periphery will aid in decreasing the socio-economic gap in Israel

  19. Implementation of “High-Tech in the Periphery” • Execution • Technion Alumni Association & Technion 100 Club • Financing • Philanthropists/Contributors: First year “mechinah” • 4 years of study: Bank Loans (Bank Leumi agreement)

  20. thank you for your attention

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