The venture capital industry is looking east, with developed countries no longer attractive for investment in high-tech. This is the general conclusion from the Deloitte 2010 Global Venture Capital Survey, carried out in conjunction with venture capital associations around the world, including in Israel.
27% of the respondents in the survey say that, beyond investing in their own countries, they intend to expand their investments in the Chinese market in the next five years. 16% mention larger investment in India, and 14% say they will focus on the US market in addition to investment at home. The survey reveals that Israel is no longer an attractive destination for investment, with only 2% of respondents saying that, besides investing in their own countries, they will invest in Israel. This is a similar rating to that awarded Vietnam, with Switzerland, Germany, and the UK rated higher than Israel.
Asked whether it was likely that venture capital firm partners would invest outside their own countries, nearly 50% of the respondents answered in the positive. The highest likelihood of such investments was expressed by senior Israeli venture capitalists, 70% of whom said they would probably invest abroad. By contrast, only 23% of venture capitalists in China and 342% in Brazil said that venture partners would seek opportunities abroad.
Igal Brightman CPA, chairman and CEO of Deloitte Brightman Almagor Zohar & Co.and managing partner of the TMT group in Deloitte said, "The migration of venture capital eastward indicates that the global high-tech industry is seeking new growth opportunities. The main indicators in the Israeli economy, among them accession to the OECD, the fall in the shekel-dollar exchange rate and the rise in salary levels, make Israel less attractive in comparison with the alternatives."
Published by Globes [online], Israel business news - www.globes-online.com - on July 15, 2010
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