The 80s: Launching companies despite the crisis

The bulb that lit up all Ramat Gan is emblazoned in the collective memory. The Zisappel brothers form RAD. The Ministry of Science and the Israel Space Agency are launched. Cellular phones enter our lives.

In the 80s, the rush to Israel, by high-tech giants and others, continued and local industry continued to grow - despite the banks share manipulation affair, the stock market crash, inflation, and the severe economic crisis in which the Israeli economy was mired in the middle of the decade.

Under these circumstances, in 1984, R& D exports still reached $1.6 billion. That same year, the number of engineers and scientists in Israeli industry grew by 460%, and the percentage of sophisticated product industries rose from 6% in 1968 to 24% in 1984. Also that year, exports by the electronics industry reached $895 million.

These figures, which testify to the accelerated development of Israels high-tech sector, did not escape the notice of the worlds high-tech corporations, which at the beginning of the 80s had begun to establish R & D centers here. Intel established its R & D center in Haifa, as well as a large assembly plant in Jerusalem, during the decade. In the following years, Intel established a plant in Kiryat Gat.

1981 - The Bulb That Lit Up All Ramat Gan. Of all of the successes and inventions that Israels scientists have given us, one anecdotal foul-up stands out, which is emblazoned in our collective memory under the headline The Bulb That Lit Up All Ramat Gan. On the eve of the 1981 Knesset elections, Finance Minister Yaakov Meridor told the nation of the development of an innovative invention at the Technion that would solve all of Israels energy problems, if not the entire worlds. Thanks to this new invention, he gleefully promised, 40 watts alone would provide enough energy to light up all of Ramat Gan.

Even today no one is quite sure why, of all cities, Ramat Gan was chosen as the virtual beta version. In any case, it quickly emerged that the invention was more of a practical joke, brainchild of an anonymous prankster. The Israeli high-tech industry, which since then has actually adopted Ramat Gan as one of its centers, has somehow managed to get along without the mysterious invention.

1981 - Brothers Zohar and Yehuda Zisappel form the RAD group. RAD, which manufactures communications devices for Bynet, has in recent years become one of Israels high-tech leaders, under whose auspices many startups have formed, seven of which have been issued on Nasdaq.

1982 - The Ministry of Science and Development is founded.

1983 - The Israel Space Agency is established. Its purpose: To promote familiarity with space and its exploitation in Israel as well as the initiation of ties with outside parties, the encouragement of research, with the aim of developing innovative technologies for the space industry, and coordination between the various institutions in Israel that handle space issues.

1983 Efrat Future Technologies is founded. Kobi Alexander, an investment banker with American company Shearson Lehman (later to become Smith Barney), and his brother-in-law, Boaz Misholi, founded Efrat, which would develop computerized voice mail. Concurrently, the partners registered Comverse as their American parent company. In 1986, Comverse conducted its first public issue in the U.S., and raised $6.5 million based on a value of $20 million. After Comverse became mired in difficulties, Misholi sold his shares to Alexander and left the company. At the end of the decade, Comverse moved over to developing voice mail systems for large telephone companies, and in the 90s, it began to experience rapid growth that positioned it firmly as a world leader in the market and one of Israels largest Nasdaq-listed firms.

1983 - Indigo. Benny Landas Indigo began developing the E Print 1000, a digital printer. Ten years later, Indigo has become an international success story, raising $100 million in its Nasdaq issue. Indigos rapid growth was dizzying so much so that the company later crashed into a crisis from which it has been gradually recovering over the past few years.

1984 - The founding meeting of the Israel High-Tech Industries Association is held.

1984 - The cornerstone is laid for National Semiconductor in Migdal Haemek.

1985 - Amdocs is founded. Following the dismantling of AT& T, Southwestern Bella Baby Bell founded as a result of the splitacquired 50% of Aurec. That same year, Aurec founded Amdocs in order to provide billing services to an American company. In 1998, Amdocs went public for the first time in the U.S. and raised $252 million. One year later, Amdocs issued shares again and raised $774 million, and over the course of a few months raised $500 million more in a private issue. Amdocs has become a world leader in the billing industry, and at its height, was traded at a value of $21 billion.

1985 - The Law for the Encouragement of Industrial Research and Development is passed. Since the law was passed, the Office of the Chief Scientist at the Ministry of Industry and Trade has helped to fund innovative projects with export potential.

1986 - The cellular phone. Pelephone, Israels first cellular operator, was founded in 1986. Owned by Bezeq and Motorola, Pelephones founding signaled the beginning of the cellular craze. In 1994, after Cellcom entered the market with particularly low air time rates, the cellular phone went from being a status symbol of the rich to a broad middle-class phenomenon, transforming Israel into the country with the highest per capita use time and one of the leading countries in cellular phone penetration rates. In 1998, Partner entered the cellular market.

1987 - The Lavi is canceled. The Lavi Project commenced at the beginning of the 80s, and at its height, 22,000 employees worked at Israel Aircraft Industries. The Lavi was supposed to be the backbone of the Israeli air force, but the prohibitive cost of the project compared to the price of acquiring American fighter planes, caused the government to reevaluate the project, and its cancellation was announced in 1987. As a result of the cancellation of the Lavi, 6,000 workers left the IAI, leaving it in a crisis from which it recovered only a decade later.

1987 - Davidi Gilo founds DSP. Further down the line, DSP split into two: DSPG and DSPC. Gilo left the company in 1997, and later formed other companies, among them Vyyo, which is traded today on Nasdaq.

1988 - Israelis in space. In 1988, Israel became the eighth country to launch a satellite, with the launching of the Ofek 1. One year later, the Ofek 2 was launched, and in April 1995, the Ofek 3 was launched, bearing unique electro-optic cargo. In May 1996, the communications satellite Amos was launched using the French Arian 4 missile. Israel also took part in the development of the astronomical UV space telescope, TAUVEX . Today, two air force pilots who have undergone a NASA training program are in line to become Israels first astronauts.

Published by Israel's Business Arena on 3 May 2001

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