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High-tech gives Israeli economy a boost
October 18, 1997
Web posted at: 11:27 p.m. EDT (0327 GMT)From Correspondent Jerrold Kessel
JERUSALEM (CNN) -- The ultra-orthodox religious neighborhood of Mea Shearim in Jerusalem has two faces. The black-garbed Hasidic Jews conducting their business on the city's streets show its ancient side. The other face of this cobblestone neighborhood, however, is new. The Internet, and with it, high-tech industry, have arrived in Mea Shearim.
From the shop front of an old-fashioned kindergarten supply store, owner Avraham Vilheim has become an international dealer.
"Business is much better," he said. "The second the Internet started a lot of Americans -- others from around the world, French -- came here, they saw the items on the Internet," Vilheim said. "They want to see the items here."
Vilheim is not alone in his business dealings. According to independent estimates, Israel is the world's fifth-best Internet-connected country, after Finland, Iceland, Norway and Australia, with 51,000 users per million people. Israel is way ahead of the United States and Canada in connectivity.
Experts say there are more Internet startup ventures in Israel than anywhere outside Silicon Valley.
One Jerusalem Internet service provider, CNS, is working on "flash" technology that will put high-quality audio and video effects on the Internet, overcoming geographical and political barriers created by being in a flashpoint region.
"I think the question is 'where's the best product,'" said CNS's Dan Silver, "not 'where does that best product come from.'"
However, the question of where the people come from is very much an issue. Israel's diverse population gives high-tech companies all the advantages of locating in an immigrant society.
"Israel has the unique quality of having the melting pot environment," said Harry Fox, the chief executive officer of CNS. "We are capable of taking talent from all over the world, that can not only contribute the skills you would find elsewhere, but be able to deliver the ethnic flavor."
Israel's cheaper phone call costs also assisted the country's Internet revolution. What started as cheaper phone calls to relatives back in Russia evolved into full-scale telephone call software on the 'Net.
The software revolution in Israel, growing 20 percent a year, may be a potential Godsend at a time of a stagnating economy.
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