1. Presented by Eran Davidson President and CEO Hasso Plattner Ventures The High-Tech Industry And The Israeli Economy 2005

2. Israel – General Background Area: 20,770 sq km (the world’s 100 th smallest country) Population – 6.8 million (% 0.01 of the world!) Gross Domestic Product (GDP) $120 billion ($17,500 per capita – exceeding that of UK) GDP Growth Rate: 5.1% Exports : $51.5 billion Imports : $52 billion

3. ISRAELI GEOGRAPHY Israel and the Mediterranean

4. 2005200420032002Criteria 124117.6110.4104.2GDP (current prices in B$) 5.1%4.3%1.3%-0.7%GDP Real Growth Rate (%) 17.917.316.515.9GDP per Capita (current prices, M$) 3.2%2.5%-0.5%-2.7%GDP per Capita Growth Rate (%) 56.750.438.437.0Exports of Goods & Services (B$) 5757.744.345.6Imports of Goods & Services (B$) 9.1%10.4%10.7%10.3%Unemployment Rate (%) 2.8%1.2%-1.9%6.5%Inflation Rate ( CPI, end of year) Main Economic Indicators Facts & Figures

5. And this is achieved in a country with the highest expenditure on defense and security issues (in absolute numbers per capita), and not natural resources beside brain power

6. Israel’s Economic Characteristics Economic Stability Constant Growth Political Stability Fast Development of Technology & Hi-Tech Industries Human Capital

7. Israel’s Economy – Main Characteristics Export Oriented Industry Entrepreneurial Culture Supportive Environment for Business Investment & R&D Incentives

8. About Palm Trees

9. Some interesting facts about Israel The Middle East has been growing date palms for centuries. The average tree is about 20 feet tall and yields about 38 pounds of dates per year Israel date trees are yielding 400 pounds per year and are short enough to be harvested from the ground

10. High tech samples from Israel The Cell Phone was developed in Israel by Israelis working in Motorola, which has its largest development center in Israel Microsoft, Intel and Cisco built their only R&D facilities outside the US in Israel SAP built their only R&D facilities outside the US and Germany in Israel, with 700 scientists The Pentium Chip in your PC was most likely produced in Israel

11. Israeli high tech innovations Voice mail technology was developed in Israel (Comverse) Instant Messaging technology was developed in Israel (“ICQ”, now AOL) Most of Windows NT and XP was developed in Israel by Microsoft Israel The Pentium MMX, Pentium 4 and Centrino Processors were developed in Israel

12. Medical developments Israel “Given Imaging” developed the first ingestible Video Camera, so small it fits inside a pill. Used to view the small intestine from inside, to diagnose and monitor cancer and digestive disorders. Israeli scientists developed the first fully computerized, no-radiation, diagnostic instrumentation to breast cancer A new acne treatment was developed in Israel – the Clear Light device produces a high-density, EV-light free, narrow band that causes acne bacteria to self destruct, without damaging surrounding skin

13. Alternative Energy, environment… An Israeli company was the first to develop and install a large scale solar powered and fully functional electricity generating plant, in Southern California Mojave desert. Israel is the only country in the world that entered the 21 st century with a net gain in its number of trees, made more remarkable when considering it was achieved in an area regarded mainly desert

14. The Human Factor In absolute terms Israel has the largest number of startup companies worldwide (second after the US) – well over 3,000. Israel produces more scientific papers per capita than any other nation by a large margin – 109 per 10,000 people Israelis file more patents per capita than any other nation worldwide Israel has the highest ratio of University degrees to the population in the world

15. Jaffa Oranges vs Hi-Tech 0 2400 6800 8800 199319941995199619971998199920002001 exports ($millions) Citrus Hi-Tech 2002 2003 7800 4400

16. 4,596 5,310 6,000 6,840 7,800 9,980 10,380 11,530 14,75015,500 13,040 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 11 12 13 14 15 16,,,,,,, 00 0 0 13,170 15,80016,700 ISRAEL ELECTRONICS & INFORMATION INDUSTRIES SALES & EXPORT (M$) ISRAEL ELECTRONICS & INFORMATION INDUSTRIES SALES & EXPORT (M$) DOMESTIC EXPORT

17. Start-ups – The emerging economy force Israel is one of the largest world centers for start-up enterprise, with +3,000 start-ups. Innovative Technology-intensive Representing technology breakthrough

18. Start-Ups – The Emerging Economic Force Industry Israel Enjoys the Highest Concentration of High-Tech Companies Outside of the Silicon Valley “ ” Robert Greifeld President & CEO NASDAQ 2004

19. The Driving Forces Israel’s unique advantage Government commitment for industrial growth, R&D Highly skilled workforce High concentration of VCs and capital markets Transition from Military to Civilian Markets I.D.F. – Entrepreneurial Spirit

20. Israel has the highest ratio of University degrees to the population in the world Israel has the highest percentage in the world in PC’s per capita 40% of the recent immigrant opulation hold academic degree Educational Levels

21. Source: The Global Competitiveness Report 2004-2005 Core Technology-Innovating Economies, 2003 Israel Ranks 4 Out of 103 Countries Facts & Figures 1 2 3 4 5 6 7 8 9 10

22. Doing Business In Israel Recent M&A TimeSumAcquirerTechnology Israeli Company 09/2005$345MArisCommunications Terayon Communication Systems Inc. 08/2005$230MHPPrintingScitex Vision Ltd. 07/2005$122MCiscoCommunications Sheer Networks Ltd 07/2005$84MBroadcomCommunications Siliquent Technologies Inc. 07/2005$42M West Pharmaceutical Services Inc. Life Sciences Medimop Medical Projects Ltd. 06/2005$105M McKesson Corp. Life Sciences Life Sciences Medcon Telemedicine Technology Ltd. 06/2005$620MeBayInternet Shopping.com

23. Doing Business In Israel Recent M&A (cont.) TimeSumAcquirerTechnology Israeli Company 05/200580M$ Johnson & Johnson Healthcare Impulse Dynamics 05/2005~85M$Broadcom Semiconductors Fabless Siliquent 04/2005 228M$ UGS CorpSoftwareTecnomatix 03/200568M$ Juniper Networks Voiceover InternetKagoor 03/200580M$ Ferring Holding SA BiopharmaceuticalSavient 03/200551M$Kodak Medical Equipment OREX Radiography 03/2005~50M$AlcatelCommunicationNative Networks 03/2005100M$Intel Processors for Digital Display Devices Oplus Technologies 02/2005 150M$ Agere Systems Semiconductors Fabless Modem-Art

24. American Companies Invested in Israel Microsoft Pratt & Whitney AOL time Warner Intel IBM Boeing Enterprises Cisco Systems GE Lucent 3Com Hewlett Packard Merrill Lynch Motorola Sun Microsystems

25. European Companies Invested in Israel Siemens DaimlerChrysler Volvo Cable & Wireless Baan Volkswagen Deutsche Telekom L’Oreal British Telecom Danone Ares Sereno Unilever

26. Asian Companies Invested in Israel Samsung Electronics Daewoo Nomura Hutchison Telecomm. Nissho Iwai LG Group New Margine (VC) Sony Toyo Ink Hyundai Acer Computers Sumitomo Trading Fuji Honda

27. Technology Leadership “ Israel has a spectacular people, great energy, unique intelligence – an ability to solve problems ” Christopher Galvin, CEO,Motorola THE ADVANTAGES OF DOING BUSINESS IN ISRAEL

28. Doing Business In Israel Technology Leadership Thanks to quality education, Israel is one of the most advanced countries in the world. … Israel is advancing in high-tech even more than other developed countries Bill Gates, CEO Microsoft, World Economic Forum, Davos, January 2000 ” “

29. Doing Business In Israel Technology Leadership (cont.) “ Israel’s market is relatively large and sophisticated, it boasts the world’s greatest per capita number of engineers, scientists and doctors. The Israeli economy is simply a reflection of the country’s greatest natural resource - which is the brainpower and ingenuity of its citizens Mike Zafirovski,COO,Motorola 2003 ”

30. Outstanding Human Resources Global Economic Orientation Stability Modern Hi-Tech Infrastructure Supportive Environment Conclusion

31. Eran Davidson