Israel's high-tech industry is on a boom, but has become the victim of its own success, with a drain of capital and brains toward the United States and a labour shortage at home that is pushing salaries through the roof.
In the past few years, Israel has become a high-tech
superpower, with the sector's exports enjoying an annual
growth rate of 13 per cent since 1997, compared with four per cent for industry as a whole.
The country saw $ 1.35 billion in start-up investment during the first half of the year, which should rise to three billion dollars by the end of it.
Software exports shot up 40 per cent in the first half of
the year to reach a level of $ 1.3 billion. Total
high-tech exports will amount to nine billion dollars for the year.
But with the boom, foreigners, particularly from the
United States, have been buying up more Israeli businesses. In three years, these buy-up operations have totalled six billion dollars.
All records were broken recently when the US firm Lucent took control of Chromatis, a company started by an Israeli,
for $ 4.8 billion - or five per cent of Israel's GDP.
A total of 110 Israeli firms are listed on Wall Street,
making Israel second only to Canada in the number of
businesses represented on US stock exchanges.
Bureau Report
