כנסת פתוחה

פרוטוקולים/ועדת מדע/6921



5
ועדת המדע והטכנולוגיה, משכן הכנסת
2/7/2003

פרוטוקולים/ועדת מדע/6921
ירושלים, ה' באב, תשס"ג
3 באוגוסט, 2003


הכנסת השש-עשרה נוסח לא מתוקן
מושב ראשון



פרוטוקול מס' 14
מישיבת ועדת המדע והטכנולוגיה
שהתקיימה ביום רביעי, ב' בתמוז התשס"ג, 2/7/2003

ההיי טק כמנוע צמיחה עיקרי – המשך דיון, הרצאת אורח של ד"ר טוני מרפי, יועץ לממשלת אירלנד, במסגרת הכנת תוכנית הועדה להשקעות בתעשיות ההיי-טק וטכנולוגיית המידע.

מכון גרטנר
אנטוני מרפי – מרצה אורח
מר ברוך גינדין – מנכ"ל המכון.
מר פיליפ ליבמן – סמנכ"ל שירות לקוחות.

משרד הביטחון
אל"מ בועז חיאק – מנכ"ל אל-אופ
סא"ל דורון יצחקי – רמ"ד מחקר, פיתוח ותכנון בממר"ם

משרד הבריאות
ד"ר בני לשם – מנהל מינהל המחקר הרפואי, לשכת המדען הראשי
רמי רמירוב – מדען ראשי

משרד החינוך
פרופ' דוד נבו – מדען ראשי
גב' אביבה מישאל – אחראית על קשרי תעשיה, מינהל מידע וטכנולוגיה.

משרד המדע והטכנולוגיה
ד"ר גדעון אריאלי – ראש תחום מדעי המחשב ןטכנולוגיות מתקדמות.
גב' עדנה הראל

משרד הרווחה
מר רון בר-יוסף – סגן מנהל הכשרה ופיתוח כ"א
גב' דבורה גולדבך – מנהלת אגף ענ"א

משרד התעשייה והמסחר
גב' נילי שליו – עוזרת מדען ראשי

משרד התקשורת
מר רפי הוידה – לשכת המדען הראשי

המשרד לביטחון פנים
רפ"ק סילבן ברנר – קצין אלקטרוניקה

איגוד האינטרנט הישראלי
מר רוני בס – חבר הנהלה

ההסתדרות הכללית החדשה
עו"ד גיל ברטל – האגף לאיגוד מקצועי
עו"ד לימור קליין – האגף לאיגוד מקצועי

חברות היי-טק
ד"ר דניאל ברנע – מנכ"ל כלל תעשיות אלקטרוניקה
גב' יערה ינאי – מנכ"ל נסיקום

חברות תקשורת
מר רמי גוזמן – סמנכ"ל כספים במוטורולה ישראל
מר אביעד ותקין – עוזר בכיר למנכ"ל, ברק תקשורת
מר אריה שניצר – מנהל המשרד לקשר עם גורמי ממשל, חברת "מוטורולה"

לשכת המהנדסים, האדריכלים והאקדמאים במקצועות הטכנולוגיים בישראל
מר צ'רלי פרל – מנהל אגודת מדע, מחשבים ותוכנה

קרנות הון סיכון
מר יורם אורון – מנכ"ל חברת ורטקס
מר איתן הילמן – מנכ"ל איגוד קרנות הון סיכון
גב' עירית רפפורט – יועצת חיצונית, חב' פוליסי

שונות
רו"ח אילן בירנפלד – שותף במשרד רו"ח בריטמן-אלמגור
מר אורי רבין – כתב "גלובס"

סימול אורקולי בע"מ

ההיי טק כמנוע צמיחה עיקרי – המשך דיון, הרצאת אורח של ד"ר טוני מרפי, יועץ לממשלת אירלנד, במסגרת הכנת תוכנית הוועדה להשקעות בתעשיית ההיי טק וטכנולוגיית המידע

מטרתנו להחזיר את ההיי-טק לעמדתו כמנוע צמיחה עיקרי, תוך שאנו מתעקשים על כך שהתוכנית שאנו מציגים תהיה כוללת. גישתי היא שאם לא נשקיע בחינוך אז אין טעם בכל זה. מבחינת דירוג הישגי בני 15 ברחבי העולם, אנחנו במקום מאוד לא מכובד – מקום 31 בחינוך למדעים. נמשיך לדון בנושא עד שיהיה שינוי.

Dr. Tony Murphy, we’re very impressed with what you have done in Ireland and we want to learn from that experience.

I would like to introduce Dr. Tony Murphy, who has a long history starting from the Academia; he was Head of Technology for Ford Motors Corporation in England and Ireland and then headed his own consulting and research company, which was merged into Gartner. He published a bestseller, about his personal involvement in the previous and current Irish programs.

I approach today’s subject of discussion in the spirit of humility and modesty, because speaking from an Irish perspective and from the Gartner perspective - we have the greatest admiration for what Israel has achieved. You have so many well-known companies, so as to advanced technology, you are right there at the very top. However, I will try and share with you some of the experiences we have had in Ireland, because I was, from the late 80s, involved in the development of the Irish Information and Communication Technologies sector. I was also working for the venture capitalists and I was instrumentally drawing up this program. Part of the things I was involved in was seeing how we could actually provide funding via the government. I have had experiences of factors such as how to draw up a program that is geared towards achieving the real objectives and will not be open to abuse. That can be monitored fairly effectively, because one of the issues we had was Civil Servants: If you have government people trying to think ahead what is going to be the best way to organize research, what is going to be the best way to develop resources, is a domain in which the government people are sometimes not the best. We work with bringing in the business sector and the academic sector. I have had a lot of experience, not only in the Irish sector but also for the EU Commission. That is just my particular background and context. The ICP sector has gone through a bad phase. It is going to come back up again, that is an absolute certainty. Very often, the time to invest in resources and development is when the sector is down. It is changing, and every country is different, but I think you are doing the right thing by recognizing that now is the time to move. Not saying that the ICT is a “fly by night” thing, maybe we should look in other areas. This is what is happening in Ireland. There has been a huge drop in the number of students taking ICT-related courses, which is a big worry for us, because there is reckoned to be a drop in the quality of ICT skills. This inclination is dangerous, because as I see it, the number of people employed in ICT-related sectors in Ireland has hardly gone down. Despite the fearsome headlines about companies letting off thousands of workers, when you look at the numbers, the new jobs that are being created are more than compensating. Just to put it into context, Ireland at the moment exports about 33 billion Euros’ worth of ICT products and services every year. It’s about a third of our GNP, which is colossal. It is an incredible figure in a country of 3.5 million people, half the size of Israel. We make 40% of all the PCs that are sold in Europe and we produce more computer graduates than Germany does. This is a real motor for the economy. In fact, pharmaceuticals and computers are the motors for the Irish economy and I think it is going to be the same with Israel. I think that Israel has the basic knowledge there. In some less-developed countries they have the aspirations to become an ICT country and to develop applications, and I think they are crazy, since there must be an infrastructure of knowledge, of entrepreneurial skills, of experience of marketing, and Israel has all that. I think that in Israel’s case it is primarily an issue of selecting the right areas and giving the right support. If that is done, remarkable results can be achieved, I would believe.

Do you have any idea in what field we should invest?

There are some areas that despite the downturn, they are increasing: For instance, the health sector. Gartner’s forecast is that this is going to be the fastest growing area of ICT. I know you have some of the greatest medical skills in Israel, so I would think that you are well positioned to focus on. I would not be presumptuous enough to say that this is what Israel should do, because I am not enough familiar with that. But I think that in a generic sense, that is where you have good skills and knowledge already, and that is an area that is growing rapidly. For instance, the whole SMEs Multimedia Enterprise area is an area that has been neglected in terms of developing and marketing IT.

SMEs הם העסקים הקטנים והבינוניים, שהם בעצם ה"היי לייט" בכל מקום שמדברים על מדע וטכנולוגיה.

I have here a few statistics that I can give you in relation of the Irish ICT sector, because I think it can identify the potential for Israel: I just noticed here that are 100,000 people employed in nearly a thousand companies. That is quite a significant number. Several of the world’s largest software companies have their base in Ireland, which is a very significant one.

The interesting thing is that despite all the doom and gloom we heard about technology the export figures have stood up fairly well.

The growth rate in ICT exports has many times outgrown all the others. I think that Ireland was the fastest growing economy in the world towards the 90s, and this was driven by the ICT sector. Even last year, the local Irish software companies increased their growth by 28%. The reason I am putting all that down there is not to say that we are great, but to say that there was, and still is, an enormous potential in the ICT sector.

We feel that we are starting to fall back in number of areas, in some we dropped in the Global Entrepreneurship Monitor, which means that in the field of new business and new innovations we seem to fall down, compared to the Far Eastern countries. I spoke about the drop in student numbers, which is a worry for us. Ireland has become a really high-cost centre to do business. The payments in Ireland now are larger than in Germany, the UK and so on. We have transformed from a low-cost, or medium-cost, to a high-cost location.

In terms of ILD support, it is not a very good structure because of two reasons: First, the basic taxation system for corporate tax is very low, 12%. Therefore, if a company wants to start a development in Ireland, they can do it. So, there is no real encouragement to do research, and that is a vicious circle for us.

Also, there is not any coordinated approach between the various government bodies.
We spend 1% of the GDP on research. It looks very low, but do not forget that is the same also in the UK and Finland.

In Israel it is about 4%, and it is still not enough.

We have been primarily a development environment. We focused on the graduate level. We wanted to develop an application, market it, test it and so on, and we have been very good at it as anybody else in the world, if not better. On the actual research side, we tended not to focus too much. We regarded the PhDs as propeller heads, and let them off to their probes of Academia, and do whatever they were used to. This was the kind of attitude in Ireland.

Will you elaborate on governmental schemes to support VC investments in Ireland?

In a general sense, the VC scene in Ireland was very active in the late 90s, up to about 2000, it has gone way down again now. So, in a nutshell, what we are doing is that we are funding in it, we have a number of programs in place.

Here are a few suggestions as to what Israel can do. Basically, you can totally trace what is happening in the national, international and EU levels. I know your associations with the EU, but there is an enormous amount of money that has been given towards research and support like that. The number of relatively small companies looking for EU funding is incredible, and I think you are very eligible. If you stay close to the decision-making in the EU, and if you can press the right buttons, you will get some good ideas. You are probably doing that already, but bear in mind that they are a very good source of ideas and money.

In Ireland, we have a lot of multinationals that have huge installations. Just like in Israel, there is an Irish Diaspora, in the States particularly. We are suffering from the developing industry in Eastern Europe and the Far East, and we are trying to bring high-quality stuff to Ireland, and in the meanwhile it is quite successful. For example, the Apple headquarters in Cork, where I live, does not deal with manufacturing anymore. The number of employees has sunk from 15,000 to 12,000, but all of them are dealing with administrative work. Likewise, the centre in Cork is indispensable to Apple. They are drawing in little things all the time. In a way, that would not happen in a large country, like the States, because there is not this national recognition or cohesiveness that a small country like Israel or Ireland would have. You have your own pressures, but Ireland has its own as well: We came from being a poor country to being a rich one, but nonetheless, we still have the mentality of poor people, we still feel that one day we will break up and be going back to living in straw huts. There is not the same sense of community or smallness in the Silicon Valley, for example. So, we are using the Diaspora and well-disposed multinational heads in the country.

I am passionate about not going for necessarily huge numbers. If you have a small enterprise of like 10 people, with good ideas, good expertise, a solid position within a multinational or a local company, I think it is much more valuable, because these things will stay and grow. Britain, for example has invested millions in accommodation of huge international enterprises that have employed thousands of workers, but two days later they were gone. I was a mentor for many companies that applied for funding and I saw many companies that started off really small, about 7-8 guys, but they were very focused, they knew what they were doing. When I originally assessed their applications of one of the companies that wanted to develop applications for insurance, I looked at the insurance sector and found that there were a number of huge players in it, and I told them that I did not see how they could take the others out. But they had a really specific plan and now they are one of the biggest in the world in the insurance space.

Ireland did not give massive grants. The factors that brought people to Ireland were other ones.

If you can establish partnerships, and again, you can use your Diaspora here, with companies in the States or Europe where there are leaders in this particular space. Sometimes, because we are doing something, we want to stick with it. For example, I was once in a company that was developing a speech recognition application, and it was really clever stuff. But, I started to realize that this was not going anywhere. The people in the group, they could not see that and did not want to. People who have great ideas, who are close to the technology, very often will not see the big picture, and I’m saying you should not rely on cleverness and skills only in order to improve the sector.

You would have a lot of really good people, doing advanced things in this country, I know you have, that may not be commercially viable. There comes a time when you have to stop pouring money into a situation, or alternatively you would have to guide a company into something more productive. One of the most remarkable things I found in my dealing with start-up companies was their reluctance to hand over part of it. They will do anything instead of giving 25% percent of it to bigger companies. The decision makers should be helped to realize that there is not an endless stream of finance and they should be encouraged to part it with other leading companies of their field. Very often, they are bought out and the skills leave the country.

It is our main problem now, it is a big issue.

I think it is good, because it happened in Ireland as well. If you look at a lot of the famous Irish companies, most of them have gone to the States, or something like that. I think it cannot be avoided. Nonetheless, it is building up the country as well.

Is it not one of the reasons that the industry is going down, that you take away the knowledge, skills and spirit?

I do not think so. I feel it is not a bad thing. It is a great encouragement for the people to develop their local, and indirectly the national industry.

Two out of three exits in Israel are companies sold to a major foreign investor. I think it is a fantastic thing, because most of them keep their facilities in Israel and support them.

According to our research it is not like this. There is a lot of leakage, the government is not collecting taxes for this, so what happens actually is that we develop here and other governments enjoy all its benefits.

It is, as I said, a big issue.

The statistic would probably suggest that it is true, but somehow it is only my intuition that it is not a bad thing. There is more than one answer.

As to ICT companies, you can look for alternative sales channels. According to my experience with Irish companies, when they have a sales channel, they tend to think that it is best for them. But there are others. It surprises me that they do not think outside the box. It is worth considering. We also think that ICT companies are not very wise in terms of their use of Media. They think that an advanced medium is the way to go. They spend their money very unwisely.

When you go into technology companies, most of the times the last thing on their minds is the customer. It may sound extraordinary, but it is true.

I identify much more with the European model that the American one, so I think that flexible employment – “hire and fire” – is a horrendous mistake. Over the years, in Ireland, we have moved towards a flexible remuneration in employment, i.e. we removed a lot of the social support. It works a lot better in an economic sense, rather than the political sense. I think that if a company goes through a hard time, it should give people part-time works, reduce salaries or cut holidays. By a “hire and fire” mentality, you completely change the ethos of a company.

What is the unemployment rate in Ireland?

It is about 4%.

Was it the same 10 years ago, or it is only because of the reform in the economy?

Starting ten years ago it has been going down and down. It coincided a lot with that.

The reduction of the unemployment rate is actually one of my targets here in this plan.

One of the best things in Ireland, which I am certain that would apply well in Israel, is a rapid and flexible response. I had the impression that Israel would be a highly militarized and ordered country, and I see the total opposite. It even made the Irish look organized. Just like the Irish, there is not a linear way of thinking in Israel, or a holistic way of doing things. Ireland has been particularly good at changing horses in mid-stream. If a company needs a change in its lines, it will take place within a few weeks. I find this so important in the current age. Israel should capitalize in that because I know you have that capacity.

In the technology sector you find that there always is an attitude to sell for the big, top multinationals. The Small and Medium Enterprises are usually overlooked, but a lot of these companies are highly profitable, and they make decisions a lot faster.

Technology companies are very poor in showing to a business what the real value of their solution is. They are really good at saying what the solution will do, but that is not the same thing.

We have found a surprising thing, but I have to admit that when we reduce tax rates we actually get more taxes.

You told us about the low investments in Ireland. Is it essentially a substitute to giving a low tax structure, which allows the company indirectly to do the same work with the same income?

Absolutely. By leaving more money available to the companies they should spend more on Research and Development. The final result of this action is that the proportional money we are spending is low. The companies usually take their R&D money and do absolutely comical incentives with it, that have nothing to do with R&D. The definition of what R&D is changes from one place to another.

Out of the comparison we just made between Ireland and Israel, we found out that the proportion of IT or research-related companies versus manufacturing is in favour of the latter. Therefore, the R&D funds are so low because many companies are investing in manufacturing, facilities and so on, and not in pure R&D.

In Ireland we still have millions supporting R&D, and that would not suggest that companies are trying to receive better profits.

Israel is leading in terms of clustering. I would think that it is a hugely successful mechanism and you should capitalize in what you have in that and extend them.

We give companies the amount of 8000 Euros to employ a graduate for a period of six months, and we expect them to invest some of their own money. There are many companies that coordinate with that arrangement. This scheme is very new but it is working already.

How old is this program?

It is very new, only a couple of months. I gather the initial response is fairly good.

Instead of paying them unemployment insurance you just pay them to work.

It is an opportunity to get graduates into an environment, get them off unemployment and save them from emigrating. It is too early to say how successful it will be.

How many people take part in this program?

I would say a few hundreds. It is brand new, so I do not have exact figures.
We are laying a special emphasis on ICT in Ireland. Before they have been doing more general things. They are doing it in connection with local firms.

The cooperation with multinational firms, that I mentioned before is proving to be quite successful. Not dramatically successful, however. The small improvements add up to a very successful ensemble. We are trying to develop science and technology, and to strengthen the links between university research centres, incubators and so on. I think it is focused on several areas: biotechnology, information-communication, and maybe others. This program is funding post-graduate research in the sciences, and it is trying to commercialize this research. I think it has been proactive as well in terms of bringing in experts from around the world to be employed in Science Foundation Ireland.

We are promoting a positive image of ICT, because we are worried by the drop of people taking ICT studies. We are doing quite a subtle sale – bringing forward the good news and trying to downplay the bad news – it is just a campaign.

Have you encouraged students to go and study?

In theory, second and third levels are free in Ireland, but I would argue it is not free, because poor students would have to find transport, accommodation, etc. If you take the statistics of low-class people doing third level, since we have free education in the last 20 years the ratio has not changed. So in fact the poor are subsidizing the rich – it is mostly the wealthy people going to third level and getting it for free.

There are a number of very active programs in involving the university people. Science Foundation Ireland is close to involving that: we are trying to support for campus companies where a university lecturer is also a head of an advanced technology centre. In each university we have a campus centre, and innovation centres and again a lot of people would say that a lot of money is wasted there, but it is not completely true, since there are many people working there, coming up with new ideas, etc.

We also have something like the Science Foundation but its budget is only 50 million Shekels a year, not 250 million Euros like it is in Ireland. The focus in Ireland is on production, and in Israel it is mostly R&D. There are big differences in that.

We are falling behind because we should do more in the R&D.

The Israeli argument is, “why do we have many small companies and not a single large multinational that is producing anything?”

Why do you want that? There are thousands of technology companies in Ireland, so if 20 of them close down, it is still OK. Speaking from the Irish perspective, we produced 6 world leading companies, which is an amazing result for a country our size. They have all been badly hit by the recession, but we are finding now that we should be more towards the Research and Development side because we are using a lot of the production facilities of Eastern Europe and the Far East. For example, the Apple company in Cork employs around 11,000 people and there is no massive singular focus on Research and Development, it is all a series of little bits of expertise and I think that is a good thing, because it reduces vulnerability. I do not understand your concerns, then. I would feel very sad for Finland if Nokia collapsed. With the Research and Development, it is a much more solid base for producing than the actual production.

I think we are losing the coordination. You are focusing on that, and that is very good. We are flinging money at the problem and we are looking for quick results; there is a lot of criticism in this particular area, and I think a lot of it is justified. The plan that you have drawn up is very good: It is taking a very unified and holistic approach to it. I would suggest that the national policy should be coordinated.

Who could do it in the government?

The problem in Ireland, and probably in Israel as well, that every government is a coalition: The first thing you do is to cave into demands. So, if we try to find a strong man, so to speak, to take over something, immediately they start shooting at him.

So what we need are a few ministers?

I think the ministers are hopeless. They have got the money, but I would not put them in charge of sweeping up the rooms… These people are so inadequate.

Again, what we lack is coordination. When I say 250 million Euros it sounds impressive, but probably two times of that have been wasted due to opportunism and overlapping.

The social dimension - like transport, parking, cafיs and pleasant surroundings - is also very important, and often forgotten.

We are focusing on research now. We know we are good at this and we are going to focus on those areas. I would be very critical about this in many ways, but the way we are actually supporting them is very good. We have very specific research-supported programs, we have marketing programs, and the value you can bring to them is amazing. Simple things like those are very useful. You need experienced people who have been around the globe and maybe brought their own companies, I am sure you have a lot of them in Israel. If they are recruited to mentor companies as they go along, it will be very useful.

You did not mention the biotechnology for which Ireland is very well known.

We are absolutely gigantic in pharmaceuticals; it carries our exports. In the early 80s we targeted pharmaceuticals and ICT. Some people would argue that pharmaceuticals are much more successful than ICT, but I do not think it is. We have many companies and research centres in the universities, but in terms of companies that started and became world players, there are very few. But in terms of the actual money, there are tens of billions of Euros exported every year. We targeted people who left Ireland and had their experience around the world, and convinced them to come back by special supports and so on, in order to enterprise Ireland. Some of the best things that happened in Ireland have come via those people.

How many of them have come back?

400,000 Irish people have come back in the last 7-8 years. It has caused a problem – housing prices have gone through the roof. It is great however, because formerly dead communities are now vibrant.

Is it the first generation that is coming back or their children?

The ones who left. The people who left during the big recession in the early-mid 80s are coming back now with their skills, experience and money.

We heard your opinion about the Irish government and the Irish ministers. How do you convince them, then, to undertake this reform?

In fact, it was the government that actually drove this. The body Enterprise Ireland, that faced a lot of criticism, handled the development of the Irish sector very well.

We were developing this area in a very bad time – we had huge deficits, schools were falling down, people could not get health treatment – and we were terribly criticized. Still, despite the opposition, we stuck with that, and eventually it transformed Ireland.

The important point that has to be made is that Gartner continually checks different parameters of the different countries. The most significant changes in the last years are that Canada moved up and Israel dropped dramatically. Israel has been losing its relative advantage, as other countries pass us. We are losing out in government support, which is not a good sign, flexibility of the labour pool, and cost advantage. This information is where worldwide investors get their ideas of Israel.

That is very true. The other big change, from Ireland’s point of views, is that we lost our cost advantage. It is a very expensive area to do things.

We must conclude.

Thank you very much for listening.

רציתי להוסיף שחברת גרטנר, כחברה גדולה בתחום הייעוץ והמחקר בתחום טכנולוגיית ה-ICT, חלק ממה שאנחנו עושים זה מה שדנו בו כאן. מכיוון שאנחנו חברה בינלאומית אפשר לאסוף נתונים מכל מיני מדינות על מנת לתת עצות קונקרטיות למדינות אחרות. פיתחנו גם מצגת מפורטת ובה המלצות כיצד לצאת מהמיתון.

I believe strongly that what you have suggested is the only way to solve our economical problems and I will try to convince our government to take those measures.

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