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How Israel Connects the World

Israel’s high-tech companies connect people — and also keep them safely apart.

November 20, 2001

Israel's high-tech companies connect people — and also keep them safely apart.

In a way, Jews were the early agents of globalization. For all the obvious downsides, finding themselves exiled from one country to another back in the Middle Ages and the early modern period ultimately had some advantages.

Like today’s web strategists and technologists, Jews were keen on building networks across national borders.

And like today’s high-tech entrepreneurs, the global Jewish diaspora managed to utilize this network for their benefit.

Jews were able to identify trading and commercial opportunities, be it in the old country, the new one — or both.

What mattered was to have a network to engage in global trade.

At a time when the world’s physical territory was as uncharted as today’s digital one, little information was available — and there were generally few ties between countries.

It was extremely difficult to find reliable partners and trustworthy counterparties in far-flung countries.

For Jewish merchants, the local Jewish community often fulfilled the function that chambers of commerce and commercial sections at national embassies do today.

This gave Jewish merchants an advantage over their competitors. This is also one of the reasons why Jews have been traditionally engaged in international trade throughout Europe, North Africa and the Middle East.

In the process, they managed to bring the world closer together — and helped promote globalization at its early stages. The high-tech sector is probably the newest global industry — and, despite initial appearances, a truly supranational one at that.

Silicon Valley — and high-tech centers all over the United States — have been magnets for technical and entrepreneurial talent from China, Russia, India and Ireland, to name just a few countries.

Not surprisingly, Israeli firms have been especially skillful in the high-tech game, even though Israel accounts for only 0.25% of world GDP. In fact, over 69 Israel-based companies are listed on the NASDAQ market in the United States, with a combined market capitalization of over $28 billion.

This is the largest number from any foreign country — and beats such economic giants as Japan, Germany or France.

Interestingly, one of the important connections Israel provides is between two old rivals, Russia and the United States. Since the early 1970s, over one million Russian Jews have emmigrated to Israel from Russia and other parts of the former Soviet Union.

Over the past decade, the initial trickle of newcomers turned into a veritable flood, as over 800,000 new immigrants arrived since 1991.

Many Russian Jews brought along their top-notch technical education — ironically, often acquired in the Soviet military-industrial complex.

With the collapse of communism, they were no longer barred from leaving Russia. Besides, they suddenly found themselves without jobs when the Soviet economy slumped.

Israel’s traditionally close ties with the United States — and a large number of Israelis working in the U.S. high-tech industry — also allowed Israeli companies to leverage their Russian talents in the U.S. market.

The global emergence of the Israeli high-tech industry coincided with the arrival of a huge new wave of Russian Jews in the 1990s.

And of course, Israel has a rather mighty military-industrial complex of its own, with a traditionally strong focus on developing new military electronic capabilities in every conceivable manner.

For the average Israeli, having this skill base in the country was a matter of survival. But, in a global perspective, this pool of skills also proved to be one of the most potent examples of the conversion of military products to civilian life.

After all, the Israeli armed forces are where many of the Israeli-born high-tech entrepreneurs got their initial technical training.

At the time when many people the world over inevitably think of Israel only in terms of precision-armed helicopter gunships and tanks, the best symbol of the global reach of Israeli high-tech companies may be quite different.

It is a small company called Mirabilis, which was founded by a legendary Israeli high-tech entrepreneur Yassi Vardi.

Using its ICQ communication technology, Mirabilis developed a messaging system that allowed Internet users to identify who of their friends and family members anywhere in the world were online at the same time — and to exchange real-time messages with them.

In a very short time period, Mirabilis built a community of over 50 million users, covering most of Western Europe and spawning myriad imitators.

In 1998, Mirabilis was bought by AOL, whose instant messenger system “Made in Israel” became one of its most popular features — and an industry standard.

All of this is why in a very real sense, today’s high-tech Israel is the heir to the Jews who linked the remote parts of the world at the early stages of capitalism.

On the other hand, there are also Israel’s skills to keep people safely separate from each other: Israeli companies are also world leaders in providing firewall technology.

And this technology is designed to keep people out of those areas of cyberspace that are meant for authorized users only.

The challenge now before Israel is to apply these high-tech skills to making possible the co-existence of Israelis and Palestinians.

The emphasis should then indeed be on bringing people together wherever possible — and, as many experts propose, keeping them safely apart when all else fails.