Introduction

The global high tech industry is undergoing fundamental changes, driven by the emergence of a new technology platform for growth and innovation. Built on smartphones, tablets and other connected devices, mobile broadband networks, cloud services, Big Data, social media, and a range of other technologies, the new model of computing is expected to revolutionize the ICT industry. Despite global economic uncertainty due to the expanding European debt crisis and concerns over U.S. economic growth, the pace of technological change appears unrelenting, creating substantial new opportunities both for the ICT industry and for the industries it serves.

One of the key characteristics of the emerging computing platform is that it enables the introduction of advanced technologies into new areas, which traditionally have fallen behind the technology curve. As technology seeps into more and more aspects of our everyday lives and becomes accessible for an expanding range of usages, innovation is increasingly required across all industries in order to keep up with rapidly changing environments.

Technology innovation has been the cornerstone of the success of the Israeli hightech industry over the last decades. Today, Israeli companies are playing a key role inshaping the new computing model, and across all layers of the technology stack - from the chip level all the way up to the application. Building on the legacy of companies that pioneered new technologies and became industry leaders in various fields, Israeli high-tech companies continue to excel.

The numbers are instructive: Approximately sixty Israeli companies are currently traded on NASDAQ, one of the largest numbers of companies listed for non-U.S. countries. Israel has consistently been a leader in categories such as expenditure on R&D as a percentage of GDP, percentage of engineers among residents, and others. Israeli start-up companies continue to raise significant amounts of funding from local and global investors. In fact, Israel is leading the world in terms of per capita VC investment, and is second only to the U.S. in terms of number of start-ups.

Israel's established excellence in technology development has been recognized by the global industry. Many of the leading international high-tech companies have established R&D activities in Israel. Intel, Microsoft, Cisco, IBM, and others have located their first development centers outside the U.S. in Israel. In addition, following its acquisition of Israeli flash memory chip designer Anobit, Apple has recently established its first hardware R&D facility outside the U.S. in Israel. These companies and many others continue to develop major product lines in their Israeli facilities. Furthermore, many Israeli executives are currently serving in management positions at international technology companies.

In many cases, major international technology vendors started their local R&D activity following the acquisition of Israel firms. Hundreds of Israeli companies have been acquired over the last decade. In parallel with the global market, after experiencing a significant decrease in M&A activity due to the global economic crisis in 2009-2010, there has been a renewed surge in acquisitions of Israeli ICT companies in the last 1-2 years. In 2011, 83 Israeli ICT companies were acquired for a total disclosed value of more than $5 billion. This trend has continued into 2012, as approximately 40 Israeli ICT companies were acquired in the first half of the year for a total disclosed value of more than $3.5 billion (not including Cisco's $5 billion acquisition of NDS, originally an Israeli start-up company).