Stuff of fantasy springs to life in Israels high-tech firms

HAIFA, Israel — How would you like to be able to store every bit of information in the world on your computer's hard-drive?

Or what if doctors could use a device to see inside you and warn you before you had a heart attack?

Perhaps you'd like to remove blemishes from your skin, but instead of burning them off with a laser, you could use less-damaging sound waves.

These ideas aren't the stuff of fantasy. They're being brought to reality at this very moment. And what's more, they're being created not in the technological meccas of the United States or Japan but in a tiny Mideast country.

Israel, a young nation of just 6 million people, has fast become a world leader in high technology.

With 135 engineers per 100,000 people, the Jewish state has the highest number of engineers per capita in the world — a proportion double that of the United States.

Numerous American and Silicon Valley firms have chosen to set up research and development facilities in Israel — among them Intel, Hewlett-Packard, Sun Microsystems, Microsoft and IBM.

And the country — home to some 2,000 technology startup companies — has the world's greatest concentration of such firms outside of Silicon Valley.

At the small end of the spectrum are individuals such as Uri Sivan, a professor at the Technion-Israel Institute of Technology, and David Tamir, the top executive at an Israeli startup company.

Sivan is one of the brains behind the idea to use DNA to build computer-information storage devices.

Working with colleagues at the Technion, Israel's version of MIT, Sivan has learned how to use biological processes to craft electrical circuits out of DNA molecules. Such circuits are incredibly small, a level of miniaturization which would be impossible to reach with current engineering techniques.

Each cell in a human body contains three gigabytes of information encoded in the DNA, he said. And although there is still much work to be done, a possible outcome of his work could be that "basically, you would like to have all the information in the world on your hard disc."

Tamir is president and CEO of Nanomotion Ltd., a firm that makes motors capable of producing extremely fine movements.

Like many of his fellow entrepreneurs in Israel, he calls himself "a workaholic. By the time you see the money [from your idea]," he said, "you can't enjoy it."

What keeps him at work late at night and on weekends? "I think it's the curiosity and challenge and wanting to see something you believe in being done."

While Tamir and Sivan's work may herald in the technology of tomorrow, of more immediate importance to many is the medical research coming out of Israel today.

For example, the multimillion-dollar Elscint company has developed a CT Scan device which can detect calcification inside the heart and determine heart-attack risk. This technology received approval earlier this year from the U.S. Food and Drug Administration.

Another large company, ESC, produces laser devices for cosmetic applications such as hair removal, varicose vein treatment and skin resurfacing.

More than half of ESC's exports go to the United States. And, notes Zvi Ladon, vice president of clinical applications and regulatory affairs, "I would say most of those exports go to California."

Meanwhile, a separate startup is researching the effects of sound-waves on skin.

Of all Israel's high-tech companies, it should come as no surprise that the largest one is dedicated to the military.

Israel Aircraft Industries, which is in fact the largest employer in the country, has some 14,000 workers.

One look at the company's promotional video is enough to see where the big money is — weapons. With explosions and battle-simulation action galore, the tape could double as a trailer for a summer action flick.

The Arrow anti-ballistic missile is one of IAI's current high-profile projects. Being produced in conjunction with the United States, the Arrow is designed to knock enemy missiles from the sky.

Among its other projects, IAI produces electronic equipment for use in U.S.-supplied F-15s, has a line of executive jets, and developed Israel's Ofek spy satellite.

Mordechai Granot, one of IAI's directors of international marketing, has no qualms about using Israel's intellectual might to produce instruments of warfare.

"The highest priority is the existence of the state of Israel," he said. "As to the moral issue, we have 14,000 employees who need a good day's work."

Israel's status as a high-tech leader didn't come about by design. But the country's move into that arena is rooted in the origins of the state.

Immediately thrust into war upon its establishment, Israel had no choice but to find ways to fend for itself.

"The baby was born but there was no food," said retired Gen. Amos Horev, who fought during the War of Independence and now serves on the boards of many high-tech corporations in Israel. "We had to produce our own explosions, motors, weapons systems. For the first time in history, we assembled scientists."

In the following years, those scientists branched out into other fields. Additionally, institutions such as the Technion began churning out growing numbers of graduates. Now, Israel is a country with high-tech exports totaling nearly $5 billion last year.

"What we are witnessing today is an industrial revolution in Israel," Horev said.

If there is anything that is holding back Israel's high-tech boom, it's the country's weakness in marketing. Go to any firm in Israel, and its officials will admit that they simply aren't good at selling their products to outside markets.

"We have a lack of business experience," said Shlomo Maital, an economics professor at the Technion, which recently launched an entire institute of management designed to change this trend. "We have little understanding of foreign markets and insufficient marketing strategy."

Israel also has to fight against the fact that, as a small Mideast nation, its companies are not well-known juggernauts.

"We have to be better technologically and offer something they don't. If a purchaser at a U.S. hospital gets a G.E. product and it breaks, he won't get in trouble. But if he decides to buy from a little country in the Mideast and it breaks, he gets fired. He'd better have a good reason to buy it," said Dov Maor, vice president of technology and intellectual property at Elscint.

The good news for Israel is that its future as a high-tech leader appears brighter each day. Other countries continue to pour in venture capital, and the Technion — Israel's top engineering school — is in the midst of expanding from 11,000 to 13,500 students.

As pointed out by Technion's president, Zehev Tadmor, Israel has little choice but to exploit its brain power. It cannot rely on agriculture to sustain itself, nor can it rely solely on tourism or the service industry.

"If you look at where Israel is today and what its options are for the future," Tadmor said, "it becomes quite clear that it has no other alternative than to base its well-being on technology."