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A boom not slowed by bombs

Investors undeterred by Israel's conflicts, observers say

Alongside a main road into Jerusalem sits an old Intel manufacturing plant, a sprawling building abandoned in favor of newer facilities elsewhere in Israel.

Nearby, cars travel through a poster-covered underpass. On a recent day, one poster exhorted drivers to remember, "The Messiah says a Palestinian state is a danger to the Jews!"

The scene encapsulates modern-day Israel -- prospering from high-tech industries on the one hand and rife with religious, political conflict on the other.

Yet a growing number of American firms opening offices on Israeli soil -- including Silicon Valley Bank, Sequoia Capital, Google and Microsoft -- are undeterred by the constant conflict.

Gadi Behar, founder of Los Altos-based Silicom Ventures, said investors seek technology opportunities more than they worry about wars.

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"No matter what the situation is there, people realize new technology and companies are coming. ... Even during the Lebanon War [of 2006 ... things kept going and moving," he said.

Just months after the clash between Israeli and Hezbollah forces concluded, legendary U.S. investor Warren Buffett arrived in Israel to tour Iscar, the metal-cutting equipment company in which he'd just bought a $4 billion, 80 percent stake.

And while Silicon Valley is a worldwide leader in venture investment, Israel can now tally more venture capital per capita than the United States overall, according to the Israel Venture Capital Research Center.

About $1.7 billion in venture capital was invested in Israeli companies in 2007. The U.S., with 43 times as many people as Israel -- 300 million to seven million -- had only about 18 times as much invested, or $30.3 billion, the firm reported.

For all Israel's success, some say peace is still an essential prop to prosperity.

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The outgoing U.S. ambassador to Israel, Richard Jones, spoke at an investment conference hosted by Behar's firm in Tel Aviv recently.

Describing the nation's historical rise to become a major player in global high-tech markets, he predicted that with lasting peace, "This place would really boom." The sky is literally not the limit, he said -- if political problems can be solved.

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A boom not slowed by bombs

Investors undeterred by Israel's conflicts, observers say

by Arden Pennell / Palo Alto Online

Uploaded: Wed, Aug 6, 2008, 3:26 pm

Alongside a main road into Jerusalem sits an old Intel manufacturing plant, a sprawling building abandoned in favor of newer facilities elsewhere in Israel.

Nearby, cars travel through a poster-covered underpass. On a recent day, one poster exhorted drivers to remember, "The Messiah says a Palestinian state is a danger to the Jews!"

The scene encapsulates modern-day Israel -- prospering from high-tech industries on the one hand and rife with religious, political conflict on the other.

Yet a growing number of American firms opening offices on Israeli soil -- including Silicon Valley Bank, Sequoia Capital, Google and Microsoft -- are undeterred by the constant conflict.

Gadi Behar, founder of Los Altos-based Silicom Ventures, said investors seek technology opportunities more than they worry about wars.

"No matter what the situation is there, people realize new technology and companies are coming. ... Even during the Lebanon War [of 2006 ... things kept going and moving," he said.

Just months after the clash between Israeli and Hezbollah forces concluded, legendary U.S. investor Warren Buffett arrived in Israel to tour Iscar, the metal-cutting equipment company in which he'd just bought a $4 billion, 80 percent stake.

And while Silicon Valley is a worldwide leader in venture investment, Israel can now tally more venture capital per capita than the United States overall, according to the Israel Venture Capital Research Center.

About $1.7 billion in venture capital was invested in Israeli companies in 2007. The U.S., with 43 times as many people as Israel -- 300 million to seven million -- had only about 18 times as much invested, or $30.3 billion, the firm reported.

For all Israel's success, some say peace is still an essential prop to prosperity.

The outgoing U.S. ambassador to Israel, Richard Jones, spoke at an investment conference hosted by Behar's firm in Tel Aviv recently.

Describing the nation's historical rise to become a major player in global high-tech markets, he predicted that with lasting peace, "This place would really boom." The sky is literally not the limit, he said -- if political problems can be solved.

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