Embed Size (px)
Citation preview
Like Israel: from IT to High-Tech
Ukrainian Software Development Forum 2.0, Kyiv 2014
Aviram Eisenberg
The First Time I Came to Ukraine…
8 Years ago I came to Ukraine for the first time…
I put on a nice suit (so I thought) and shopped for a good development partner
Everybody was talking with me about the IT Industry (and I thought this “High-Tech” with Russian accent
IT = Selling Development Services High-Tech = Selling Developed Products
How do we turn the IT industry to High-Tech (and not just by changing the accent
* according to the World Bank
About Me
Father of 3 wonderful children
High-Tech professional for the last 30 years
Computer geek in my teenage days Platoon commander in the Army Intelligence (computer related) Computer Science Graduate from the Technion Chief Architect at Mind CTI Founder and CEO Of Ignite – a global IT company Chairman of the Israeli R&D Managers forum
Lives in Kiev (Ukraine is my second home!)
* according to the World Bank
4
Country History
66 years
22,072 km2
23 years
603,628 km2
now
Territory
Age
Population
Wars10 wars (every 5-10 years)
1947-1949, 1956, 1967, 1967-1970, 1973, 1982-2000, 2008-2009, 2010, 2012, 2014
8,14 mln 44,29 mln
Israel - Silicon Valley in the East
spend the highest percentage of GDP on scientific R&D: 4.4% compared to 2.7% for the United States
R&D centers of Intel, Google, Microsoft, Facebook, IBM, etc.
19 companies listed on London Stock Exchange
combined market capitalization on LSEG $6.9 billion
62 companies are traded on NASDAQ, totaling $ 36 billion
* according to the World Bank
Israel is the Startup Nation
Tel-Aviv comes is #2 in the top startup ecosystems in the world
more than 5,000 active technology startups
450-500 startups are established every year
each month 10 companies move to New York
distributed and powerful angel investors network
most venture capital per capita: 2.5 times more than the U.S. and 30 times more than Europe
How Did it Start?
But, it was not always like that!
30 years ago Israel’s was very much like Ukraine – selling IT services to the USA
The Israeli Army produced excellent developers
International companies came to shop for good (and cheap) developers and established branches (Motorola, then Intel, them Microsoft…)
With time, developers left the big companies and started small innovative product companies in the same vertical
Investor-friendly government policy brought more big companies
How Did it Start?
Few startups were sold to international companies
Then came the VCs and the private investors
And the rest is history…
9
Investment adaptable microclimate
a record amount - $ 11.8 billion, which is 24% more than in 2012
2nd place
36
$ 2.86 billion
128 th place
144
"Protecting the rights of investors“
Foreign investments in 2013
Corruption perception - global rank
Israel Ukraine
10
Government supportIsrael
government programs established in early 1990-ies:
- technological incubator programme, 1991;
- 10 VC funds, with a budget of $100M in 1993
61% secured follow-on funding and 40% are active to this day
$300M budget to subsidize up to 50% of R&D investments for new products, support for pre-seed projects
$250M budget to help early stage BioPharma companies
11
Government support
Ukraine
National project "Innovative Ukraine“ (pre-launch phase)
Tried to build IT parks in Kiev and Kharkov
Private real estate IT-park project “Bionic Hill” (terminated)
Private VC investors initiative “Global Technology Foundation“
- Grant program since 2013 - $20K per project - 10-12 grants for startups every year
12
Tax policy
Israel
Income tax policy of reducing tax rates
(in 2004 - 36%, while in 2013 only 25%)
Tax incentives for large investments- full exemption from income tax
for 10 years - reducing of dividend tax to 15%
Ukraine
The total tax burden for IT-companies is more than
50% !
13
IT Community & Education
Israel
more than 240,000 IT experts
2nd most educated country
“Technion” took 7th place in the ranking of the best universities in the world
Jewish Mom factor (you can do better, son!)
Ukraine
~70,000 professionals in IT
16,000 IT graduates annually
only 4-5K of new comers are employed in the specialty
4th of certified IT professionals in the global rank
14
Areas of IT Expertise
Israel
Homeland Security - military software - airport and objects - personal surveillance control
Cyber security
Medical Devices industry
Scientific researches
Ukraine
Programming instruments and platforms
Computer games
anything else you heard of?
15
Challenges for Ukraine
Corruption elimination Build new and well paid army forces, police, court judges, prosecutors
Guaranteed equity rights Open registry lists and cadasters for all equity rights and assets (land, real estate, stocks, financial obligations, etc.)
Education system reform Decentralized, more privately held kindergartens, schools, universities curriculums created by professional communities
Transparent and automated bureaucracy E-government, easy doing business (go up in the rank)
16
Ukraine’s Strengths
High motivation for High Education
Hunger to Succeed
Individualistic and entrepreneurial spirit
17
Conclusion
IT Ukraine today and counting: 1500+ IT companies 250K+ dev community, ~ 70K are active IT market increased by 20-25% in comparison with 2013 IT is $ 1,3 US billion industry Doing Business Rank: in 2013 – 140, in 2014 – 112 (28↑)
Ukraine is driving in the right direction, lets help her overcome the challenges!
