Israel, Barcelona, & High-Tech Glory

As I've previously mentioned, I'm curious about what seems to have become an international obsession with finding the next great Silicon Valley. I don't understand the need for an over-the-top branding effort to give one's city, province, or country a special high-tech tag. Nevertheless, I like watching how innovation moves across regions, wins financial investment, and infuses people and industry with inventive energy. (See: Silicon Valley Dreams.)

I got to thinking about this topic again when I came across some recent headlines.

Last week, an article by Emma Barnett, the Telegraph's digital media editor, gushed about Israel's thriving high-tech scene. It begins by saying the country, which is always in the middle of political turmoil, is earning a reputation as “the world’s second Silicon Valley.” Barnett goes on to say that Israel, which ranks roughly 100th in population, has more Nasdaq-listed companies than any country other than the US. “It also has highest number of high-tech startups, estimated to be 3,500, ranging from Internet companies to software solutions, outside of the US.”

How has Israel obtained such prestige? There are several reasons, including a high number of engineering and business graduates and a venture capital community ready to fund golden egg opportunities, but Barnett cites compulsory military service as an important factor. One source told her that the military's engineering training, combined with Israeli culture, gives people a feeling that “they can achieve something great on their own.”

On the other side of the Mediterranean, the high-tech hubbub has reached Barcelona's shores. The city got word last week from the GSM Association that it had been selected as the “First Mobile World Capital” and will get to host the Mobile World Congress from 2012 to 2018. The title is more or less promotional, but the announcement is actually a big deal. First, the MWC exhibition (which is several years old) and related events will create thousands of jobs. Second, the title is expected to fill the city's coffers. According to Barcelona's bid application, the city stands to generate more than €300 million (US$434 million) in its first year as Mobile World Capital, and that figure could reach €3.5 billion over the next seven years.

Why did Barcelona beat out Milan, Munich, and Paris for this status-boosting title? The GSMA cited “its combination of outstanding exhibition and conference facilities, its transportation and hospitality infrastructure, its commitment to expanding the reach of mobility throughout Barcelona, Catalonia, and Spain, and the strong support of the public and private sectors.”

Should the high-tech sector care about this kind of labeling? To some extent, it is just hype. Nevertheless, the electronics industry should know where innovation is coming from, and it should figure out how to tap the high-tech hype in a city or country in a way that may move the industry forward.

Maybe it's also time to look more seriously at the self-knighted tech hubs and develop a credible listing based on real-world data. In addition to the number of companies and startups occupying space in the region and listings on local or worldwide stock exchanges, the factors could include high-tech contributions to the GDP, the number of graduating students or residents holding jobs in the sector, the kind of innovations being developed there, and its impact globally.

What would a high-tech hubs list based on factors like these look like? Would Shanghai beat out Boston or New York? Would California's original Silicon Valley ever slip from its top-slot glory?

Anyone up for creating the 2011 Top 10 Next Great Silicon Valleys list?

15 comments on “Israel, Barcelona, & High-Tech Glory

  1. AnalyzeThis
    July 27, 2011

    I'm not up for creating a “next great Silicon Valleys” list… kind of would be a waste of time I think, there's only one Silicon Valley. It would be like making a list of the “next great [insert name of an Individual Person],” that's kind of a silly thing to do.

    And you can come up with all sorts of different numbers and reporting and hype and facts to attempt to support the fact that a particular region is a successful Silicon Valley knockoff, but here's a better test: take a region, then think about the biggest tech player in that region. How important are they? More importantly, can you think of these players off the top of your head?

    I could rattle off a long list of Silicon Valley tech companies. Barcelona? I can't really think of any, all I can really associate them with is their hosting of the Mobile World Congress. But just because Vegas hosts CES… that doesn't make Vegas like Silicon Valley. As for Israel, I can think of… ICQ, which was most relevant more than a decade ago.

    Anyhow, I suppose someday Silicon Valley won't be the dominant force in the industry that is now, but I'm very nearly certain that it won't slip from its top-slot within any of our lifetimes. I doubt anywhere else will even come close; Silicon Valley is in a league of its own.

  2. hwong
    July 27, 2011

    There are so many smart business savvy and intelligent people in the Israel cullture. I am not at all surprised by the high tech companies that are brewing currently. If you look at the United States, Silicon valley only became what it is due to the conglomerate of all these thriving tech companies from Intel to Apple to Cisco to Google. They establish in the valley becaues that's where you can find the most talent. And other tech companies or startup try to follow suit. It's a chain effect. However, i have heard stories about how unfriendly California can be when it comes to small business. Hence I heard that many startup is now moving away from the Valley to places like Seattle, Austin, phoenix…. to do business. Cost of living is much cheaper elsewhere.

  3. DataCrunch
    July 27, 2011

    If you follow technology, then you can’t help notice the large number of technology related news reports continuously attributed to Israel. 

    Israel has become a major technology powerhouse and a leading producer of start-up companies.  Many innovative and important technologies have been discovered and improved by Israeli companies and foreign companies with R&D facilities based in Israel.  As DennisQ mentioned ICQ (the start of instant messaging), and others like advanced chip technologies by Intel, cell phone technology by Motorola, voicemail.  Advancements in biotech and medical, agriculture and of course defense technologies are also credited to Israeli companies and foreign companies based in Israel.     

  4. mario8a
    July 28, 2011

    it is until today I read about Israel being considered as Hi-Tech developer ( yes, maybe I should go there and learn more), but I can't help thinking about what would the names of the companies in Israel that can be compared with Apple, Google, Cisco and many other.

    Recently I visited Cupertino and that place should be named Appletino.


  5. prabhakar_deosthali
    July 28, 2011

    May be you are right . But there is not a single name of an Israel company that I know of which is internationally known. 

    A couple of years back Iwas working for a  stratup company in India which has collaborated with an Israeli Venture capital company to develop an SOC product line. We in India are also in awe of the progress made by Israel in Agriculture. But this Sillicon valley is something of a news to me. 

    It must be that all those Jews who migrated to US during the world war and are successful businessmen in US have contributed to the growth of the electronic industry in Israel.

  6. jbond
    July 28, 2011

    I knew that the tech sector was growing rapidly in Israel, but I did not know the numbers. For a country of that size, who continually has political unrest with its neighbors, I had no idea that their numbers rivaled only the U.S.  I'm sure some of it has to do with venture capitalists from the U.S. taking part in this growth. I would be curious to see a top ten list compiled on the next silicon valley. I'm sure there are going to be a few surprising results. 

  7. elctrnx_lyf
    July 28, 2011

    I do not have any intelligence to predict the future top10 silicon vallleys, but I strongly belive Israel will be one of them. I've heard of their military electronics for a long while and came across many telecom soc companies coming from Israel.

  8. Jennifer Baljko
    July 28, 2011

    Thanks, everyone, for weighing in. You're right in saying that names of companies in Israel or other developing tech hubs may not immediately roll off the tongue as quickly as those in Appletino, as Mario8a redubbed Cupertino. FWIW, I also had to come to speed on who's who. Here's a list of companies from Israel on NASDAQ. The list is largely stacked with telecom and computer communications equpiment, pharmaceutical, and semiconductor companies.

    But just because the names don't come straight to mind doesn't mean the technology being developed there should be too readily dismissed. Military and telecom probably will be strong electronics sectors for the region in the coming years. Think about it for a moment – What did the world know about Google in 1996 or Apple in 1976 or HP in 1939? Um, not much. It took time for those names to become household names and respected brands.

    Siicon Valley may always be the iconic tech hub model. It's where a extremely talented and highly qualified labor pool, perhaps serendipitously, began clustering to create great products. But it would be naïve to think in 20 or 30 years it will be the only hub, or for that matter the most important one.

  9. stochastic excursion
    July 28, 2011

    Israel is known to consumers of high-end mission-critical (everyone knows what an Uzi is) and lab equipment.  Silicon Valley-type hubs exist when there is one or more world-class universities where innovation is fostered with a view to practical applications.  Israel can certainly claim to adhere to a scholarly tradition.  Algebra may have been invented by the Arabs, but they may have been spoiled by sitting on giant billion-barrel-per-day oil fields.

  10. mario8a
    July 28, 2011

    Hi Jennifer

    and what about Barcelona?  is there any tech development to consider over there?

    for what I saw in the news there's not too many people happy with the decistions of the goverment on Spain.


  11. Himanshugupta
    July 29, 2011

    Jennifer, creating another Silicon Valley would need a unique combination of entrepreneurship, funding and optimism. I remember the quote from movie Facbook that one million is not cool…what's cools is one billion. I think the spirit of an innovative idea and building a billion dollar company is the strength of SV. 

  12. Anna Young
    July 31, 2011

    @ Jbond Israel like you said have grown in high tech rapidly and I would like to see Isreal come up with its own Silicon Valley.

    I wouldn't want  to draw up a list of the top ten Sillicon Valley either.

  13. Ms. Daisy
    July 31, 2011

    You need to add – extremely talented students, highly qualified college professors, well funded programs, and what you have is a high-tech region. That was Carlifornia and that is present day Isreal. Military discipline not withstanding, the Isrealis live in a harsh eographic environment and have nutured young fresh minds to tackle every obstacle they came across. The results are high-tech innovations and high powered military products. That is the success story of their “silicon valley” in the desert.

  14. Taimoor Zubar
    July 31, 2011

    I think one of the factors behind the development and success of Silicon Valley is universities like MIT, Harvard and Stanford which supply the human capital required to run the technology firms. If the success of Silicon Valley has to be replicated at another place, the country or region needs to be equipped with world-class universities which train the future entrepreneurs and technology leaders.

  15. electronics862
    July 31, 2011

    I agree that Israel has grown technologically and if there is an increase in the investments it will definitely increase the production rate and even it can come up with its own manufacturing units. Even Barcelona is encouraging the industries to raise their production.

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