Technology Development Is Heating Up Again

Malcolm Gladwell's Tipping Point tells the story of how messages travel in networks. His is the modern day observation of the power in people networks. His observation is more on how social messages affect our way of making decisions in life.

Business in Israel is both isolated and connected with the outside world. It is isolated because there is no real connection with any of the border states. Arab states are different culturally and the political divide continues to make any business relationship difficult. On the connected side, Israel has strong ties with European, American, African and Asian counties. Culturally, Israel is most similar to European countries. So are business practices. Business wise, Israel is closest to the US. This is especially true in the technology sector. There is more synergy between Israeli technology companies and Americans than any other area here.

But Israel has a very different technology landscape than anywhere else. The differences start with the small size of the Israeli technology sector to the concentration in a small number of sub-specialties. The difference between Israel's and other countries technology sector causes different economic cycles. Until earlier this year, the technology sector was in big trouble. Engineers of all kind were looking for work like crazy. The ever buzzing venture capital firms with their start-up investments were on life support. Investment in new technology start-ups is one of the strong economic engine here. For a while it was taken over by government investment agencies. In the last three years, the government has tried to do it's part but overall failed. There a no start-ups in operation today which can attribute their success to government investment.

Something happened here between February and April. The technology sector woke up and suddenly things look good. Start-ups which managed to hold on from 2007 to 2009 are starting to show life. Small and medium companies have renewed life and are hiring. The venture capital investment is not back to peak levels but the money is starting to flow again. Most of all, Israelis are feeling that the bottom was in the past. This psychological factor: optimism, is an important element here. We are all holding our breath to see how this trend continues. After all, this is the land of start-up and high-tech, what are we going to do without it, go back to oranges and farming? I don't think so :)