A decline from ‘start-up nation’ to ‘app nation’?

Writing “fun” apps and setting the goal of selling your start-up to a big American company is no way to run a “Start-Up Nation,” according to Dr. Shlomo Markel, a Haifa native who is a vice-president of fabless chip and infrastructure giant Broadcom. “I have no problem with people getting rich in an exit, but it seems we are turning into an ‘app nation’ and losing our edge as a ‘start-up nation.’

“If Israel is to retain its position as a top tech center in the world, we need companies with employees creating advanced technologies, and the games and cute connectivity and social apps so many entrepreneurs are focusing on just won’t cut it for Israel in the long run,” said Markel.

Ensuring that Israel continues to produce world-class engineers who know their way around a computer chip is good for Israel, but it’s also key for large multinationals like Broadcom. Over the past ten years, the company has bought nine Israeli start-ups, and has nearly 1,000 employees here. “We are one of few international companies in Israel that have been constantly expanding our workforce here,” said Markel. “In 2009, we had 100 workers in Israel, and now we have over 800. Much of that has been through organic growth, in which we hire new people, not just retain the workers in the companies we acquire.”

Interestingly, the other multinationals that have been on a hiring binge are other “silicon-centric” tech companies, including Intel and Qualcomm. Officials at those and other companies have expressed concern about the state of Israeli innovation, and Markel said that he, along with top executives in other tech companies, had met with government officials to express their concerns and suggest solutions. “Only in Israel can you get together with your competitors to talk about ways to improve education and training,” Markel said.

Education is where it’s at for tech training — and Israeli schools today don’t have nearly enough of the kind of education big tech companies are seeking for their employees. “In the past, there was a greater willingness to support long-term educational efforts needed to train engineers,” said Markel. “Now it seems some of that has disappeared. We need more incubators, accelerators, and incentives to push engineering education.”

Those incentives need to come from the government, which, according to Markel, is not doing nearly enough to support high-tech education. “University budgets are being slashed, and universities are placing less of an emphasis on engineering. Israeli is becoming an expensive place to do business, and other, cheaper countries are producing great engineers now. Our universities are doing their best, but they need help.”

Those in charge of education policy and budget may or may not realize that there is a problem, but absent public pressure to make technology education a priority, they’re unlikely to act. The reason for the absence of that pressure? Israelis have been so conditioned to believe that their country really is more creative and innovative, so they think the institutions here are doing their job properly.

“Israelis love to see their Nobel Prize winners receiving accolades, or big exits like Waze, but they don’t realize that we are succeeding on the ‘merits of our forefathers,’ reaping the benefits of past generations’ educational efforts,” said Markel. “I’m frankly very worried about what is going to happen in ten or fifteen years. Will Israel still be the premier location for innovation?”

It takes effort and political will to come up with the money needed to provide the proper programs. “There’s a political will, but from will to action – and provision of money – is a long journey,” said Markel. That’s why Broadcom isn’t waiting for the government to improve tech education. “We are working with Haifa University, the Technion, Tel Aviv University, and the SpaceIL program to train young people in engineering.” Broadcom runs several programs in junior high schools, “because that’s where kids make their decisions on their future careers.” Last year, the company, through its non-profit Broadcom Foundation, donated $100,000 to the Weizmann Institute of Science in support of SpaceIL.

Broadcom isn’t the only company with such programs – other multinationals, like Microsoft and IBM, have their own programs running the gamut of grades, from kindergarten through college – but still, there is no substitute for public leadership on education policy. “As an Israeli who is abroad much of the time, and works for a corporation based abroad, I see Israel the way it is seen by the tech giants abroad,” said Markel. “They like what they see, but we know things can be better. We must do the things that will ensure that the start-up nation will continue to remain ahead.”