It's Israeli vs India now

BANGALORE: Indian tech industry has now a formidable competitor in the high value research and development area. Israel with its IT product heritage is giving India a run for its money in this lucrative domain.
As the global corporates are outsourcing their tech work to save costs, Israel is taking the lion''s share in productised services and R&D activities.
The traction is evident from the flurry on tech investments in the country.
An IVC Research Centre report indicates that in the second quarter of 2003, 86 Israeli high-tech companies raised $271 million from venture investors - local and foreign - an increase of 28 per cent from the amount raised in the previous quarter of 2002.
"The nerve centre of software development in Israel revolves around high-end solutions, complex applications and the need for domain expertise. We work with over 500 clients which include a number of Fortune 500 firms as well as product companies as part of their extended R&D team," Aharon Fogel, Chairman, Ness Technologies Inc, told The Times of India.
Israel is known for its work in the telecom and security sectors, fuelled largely by its strong emphasis on technology development in the military. High-tech products account for 70 per cent of exports, while there are some 80 high-tech Israeli companies trading in the states. R&D soaks up 2.2 per cent of the country''s gross domestic product.
Interestingly, over 125 Israeli companies are listed on Nasdaq, making the Israeli contingent the second largest after Canada.
Meanwhile, the $320 million US-based firm which has an Israeli origin is the largest IT company in Israel and does more business than the Israeli arm of IBM Global Services. It works in industry segments such as pharmaceuticals, financial, government and defence as well as with independent software vendors (ISVs).
According to Fogel, although outsourcing plays a great role in Israel IT industry, offshoring is a sensitive issue in Israel. "But we have not faced any major problem till now. Our customers in the US sometimes do ask us to outsource some work to other countries but moving jobs out to other countries is something we have not done yet."