Security News > 2001 > October > Israeli high-tech firms may benefit from security concerns

http://www.nandotimes.com/technology/story/156312p-1476718c.html By JASON KEYSER, Associated Press TEL AVIV, Israel (October 23, 2001 10:00 p.m. EDT) - In the doldrums for the past year, Israel's esteemed high-tech firms are hoping a nervous world will turn to their security-minded products. Some 1,000 participants, including 200 from overseas, came to the three-day Israel Hi-Tech Summit this week. Among them were those selling software that converts Microsoft Windows applications to a Web form, allowing companies to make documents available to clients on the Internet. "To our clients remote access is very important, especially if you want to work from home, especially under the extreme security measures we're seeing now," said Rinat Gersch, spokeswoman for AppSwing Ltd., the Israeli company which made the software. "So there is a definite opportunity here." Israel's technology sector, one of the world's most active, has taken a hit during a worldwide recession and a year of fighting with the Palestinians. Before then, it had been the country's engine. Now, high-tech firms are hoping the country's mindset of constant security - and thus its related technical expertise - will be a benefit in the aftermath of the Sept. 11 terror attacks in the United States. "The terror environment in the world does not help people to adopt new technologies and take risks," said Amir Gal-Or, a partner in Infinity Venture Capital and co-chairman of the conference. "Having said that, Israel is in a unique situation," he added. "We are used to crisis, pressure and terror. People have the capability to focus on business while all these things are happening." The industry crisis is apparent in the investment figures. Last year, venture capital firms in Israel raised a record $3.2 billion and the technology sector accounted for most of the 5.9 percent growth in gross domestic product. So far this year, $1.7 billion has been raised, said Joel Maryles, managing director of Salomon Smith Barney's Israel Investment Banking Group. Gal-Or said Israeli security companies will also seek to capitalize on the growing need for their services. In a positive sign, the Yokneam-based Given Imaging Ltd. on Oct. 4 became the first company to go public on the Nasdaq exchange since the September attacks. The company makes a tiny video camera encased in a pill that takes pictures of the gastrointestinal tract. Israel is making other moves to ward off the effects of the Sept. 11 attacks on an already wounded high-tech sector. As American capital markets try to rebound after the attacks, Israeli companies will likely begin to look to Europe's capital markets for funds, said Michel Habib, head of investment banking for ING Barings Israel. Trying to bring back investors who have left the Israeli market over the past year, Israeli Finance Minister Silvan Shalom last month said foreigners investing in Israeli venture capital funds would be exempt from all capital gains taxes. Speaking at the conference, Shalom said he was confident that investors would still be drawn to Israel. He said the country's technology sector is nurtured by the yearly arrival of thousands of highly skilled immigrants from the former Soviet Union and the advanced computer training offered in Israel's military service. - ISN is currently hosted by Attrition.org To unsubscribe email majordomo () attrition org with 'unsubscribe isn' in the BODY of the mail.

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