from the April 2007 issue

"Breeding Billionaires"

There is an unmatched concentration of engineering and entrepreneurial talent in Israel. A lot of young people come out of military units, from various universities, and the high-tech industry itself, who are very gifted engineers and scientists and also, are by character highly entrepreneurial. While in the west students study fundamental physics the Israeli, when completing his army service has already absorbed the knowledge of algorithms. This know-how forms, in due course, the basis of many start up companies.

This good blend would have never been enough without the most important characteristic - entrepreneurship and innovation.

Vishay chairman Dr. Felix Zandman told the story of his first efforts to set up a company in Israel. He gathered a number of first class engineers. He told them that he wants to build a plant for the same capacitors that he manufactures in the US. He asked them to prepare a list of items needed to build the plant. Two weeks later he met with the engineers once more. To his great surprise, each engineer offered his idea how the product could be best made and what the plant should look like. Dr. Zandman smiled and told the gathered engineers, "We manufacture $250 million of the capacitators in the United States and make a big profit. Do you think that you could build a similar plant and to our specifications?"

The personal history of Steff Wertheimer forms one of the finest examples of how success can be achieved in Israel. Wertheimer was born in Germany and arrived in Israel while still a youth. A product of the Tel-Aviv public school system he became a high school drop out. At 17 he joined the British Air Force and subsequently became a member of the Palmach elite units. In 1952 at the ripe age of 26, he had finished his army career and went about trying to earn a living. He set out to make carbide tipped tools. This became the basis for Iscar, the company for which Warren Buffet paid $4.0 billion, last year.

The nine Israeli billionaires cited in Forbes' list represent wealth accumulated from a variety of activities including industry, diamonds, real estate, banking and software. Along with the material achievements of these individuals are the six Israeli Nobel prizewinners.

All this was done in less than 60 years in a country of 5.6 million.

It lays the foundation for future achievement.

Reprinted from the Israel High-Tech & Investment Report April 2007

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