Intel Israel president: Start-up exits don't build economy

Mooly Eden tells "Globes" that there must be more Israeli multinationals like Check Point and Mellanox.

Intel Israel president Mooly Eden has a very clear angle from which he sees everything regarding setting up domestic companies and when it is worth selling and when not, even during a period when there are so many successful exits. He told "Globes" before flying to the US for the CES conference, "There are two types of start-ups. There are those that develop an app, sell it, make money and exit with several rich people. Hallelujah. I back them but it won't encourage an economic infrastructure for the State of Israel. And there are start-ups that create technological infrastructures like Mellanox and major capabilities and we must see what incentives to give them so that they won't be sold too quickly. Even if they are acquired we must make sure that there is a stable enough infrastructure in Israel so that they will leave the development here as a subsidiary and create jobs."

Eden said, "If a multinational company leaves Israel for whatever reason this has an immediate influence on R&D here. If Israel sees its human capital as so important can we allow ourselves to leave such a large part of R&D under external rather than government control? In my opinion no. Although I can understand the budgetary restrictions, I don't see a simple solution to this. There are two options. We can invest more of the state budget or we can create more multinational Israeli companies such as Check Point or Mellanox. When they invest in R&D their considerations go beyond profits and shareholders and also include domestic considerations."

Eden is concerned about Israel's education system. He said, "I see indicators that don't point in a positive direction. Education is in our blood both in terms of values and technological achievements. The new generation is going to feed both the high-tech infrastructure and key positions in the country in another 15-20 years. True nothing is burning because it won't happen immediately and even if we are not particularly succeeding in math, we won't see any outcome tomorrow, so there is a tendency to be complacent. It makes me tremble because there is so much to do. The Ministry of Education is trying many things and high-tech industry is joining the fray but I'd like to see a multi-year strategic plan that harnesses resources in the economy. It's possible to do much more about it."

Eden looks at science teaching as somebody who sees high schools as a work input manufacturer for Intel. He said, "I read that the average age of physics teachers is close to 60 and most of them were an infusion we received from the Russian immigration. In my opinion we must worry about a new cadre of physics teachers. This is a strategic problem not just a concern for school principles. In Finland, the status of a teacher is very high and 20% of children want to be teachers. We need to worry about a cadre of new teachers and improve the status of teachers and perhaps improve their salaries, but resources must be put into it."

Intel Israel today has close to 9,500 employees after inheriting 800 employees from the Micron fab that closed in Kiryat Gat. On the development side, the Haifa center is Intel's largest and most strategically important in Israel. Despite Intel's massive investment in development activities in Israel, Eden is highly critical of the fact that most investment in R&D in Israel comes mainly from international companies, although this is understandable due to the many development centers that have been set up here after acquisitions of local companies.

Published by Globes [online], Israel business news - - on December 24, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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