Tech roundup / Watch out, Silicon Valley, Israel's behind you
Wired magazine lists top 10 Silicon Wadi start-ups to keep an eye on; new start-up accelerator to open in Haifa.
* Wired Magazine has crowned Tel Aviv the world's second largest center for technology start-ups after Silicon Valley. As part of a special feature for its September issue the science and technology magazine created a list of 10 European cities that constitute significant centers for high-tech activity. Each city on the list the magazine featured 10 "hot" start-ups chosen by the magazine's editors and writers as likely to represent the future of the industry. Alongside Tel Aviv, cities that made cut were Berlin, Amsterdam, London, Paris, Barcelona, Moscow, Helsinki, Stockholm and Istanbul.
In first place among Tel Aviv-based companies was RankAbove, which also received a mention in the magazine last year, which created platforms for use by search engine optimization experts. Second place went to JamRT, run by start-up entrepreneurs Tal Barnoach and Sharon Carmel, whose app TubeHero analyzes songs from user's iTunes account and transforms them into a Guitar Hero-like game. In the third spot was BillGuard, which alerts clients to problematic credit card charges.
Next up were Everything.me, which creates search solutions for mobile devices, Magisto which developed an app for automatic video-editing, Commerce Sciences which is behind a new platform for personalizing the internet shopping experience.
Rounding out the list is Tawkon, an app that measures radiation levels in Android and Blackberry phones (Steve Jobs himself refused to offer the app through Apple), Soluto, also on last year's list, with software designed to "prevent frustration among computer users," DoNanza which connects freelancers and employers, and the last spot was taken by Wix, which allows for the rapid creation of new websites.
Two local companies on last year’s list have proven their worth. The Gifts Project, last year’s first place among Tel Aviv start-ups, which allows for Internet-based group gift purchasing, was sold to eBay. Second place was Face.com, which specializes in face recognition technology and was acquired by Facebook in June.
* Despite all the local industry pride, an eight percent drop in multinational investments in Israeli R&D, one of the central pillars of Israeli high-tech. The figures, released this week by by the Central Bureau of Statistics, were recorded in 2010. According to the CBS, Israeli R&D centers for major multinational companies such as Google, Intel and Microsoft spent approximately NIS 12.9 billion in local operations in 2010, an eight percent drop in real terms as compared to local expenditure in 2009. Similarly, in the second quarter of 2012 there was a 30 percent drop in investments made by Israeli venture capital funds and international venture capital funds in Israel compared with second quarter numbers a year earlier, according to a Money Tree report published this week by accounting firm PwC Israel. The main sectors with declining investment were in networks and communications and life sciences, following them were the software and Internet sectors. Perhaps as a point of encouragement, the report does not reflect the activities of foreign funds that are responsible for a majority of investment in Israeli start-ups.
* Another threat to the sustained growth of the high-tech sector is the shortage of qualified workers in the areas of electronics, hardware and software, stemming from the shortage of top-notch university graduates in these fields.
This week a panel led by National Economic Council head Prof. Euguene Kandel, submitted its conclusions regarding the labor shortage in the high-tech industry. The report described a shortage mainly in computer-related fields, such as computer sciences, computer engineering and electronics engineering, in particular in R&D positions.
Among the task force's recommendations to Industry, Trade and Labor Minister Shalom Simhon: upgrade the quality of technology education, steer students into tech-related fields at the high school level, strengthen ties between industry and education and consider the development of an academic track in tune with industry needs, as already exists in the United Kingdom.
A brain gain program for talented Israelis living abroad was proposed as well as an increase to the rigor of study at local colleges. The recommendations are expected to be submitted for government approval in the coming days.
* A shot of adrenaline has been injected into start-up activity in the Haifa region for companies in the Internet, mobile device and new media sectors. The hiCenter, located in the vicinity of the Haifa Port, announced this week the launch of the Top Startup Accelerator, a three month program to help entrepreneurs in those industries get their company ideas on their feet.
Companies participating in the program will receive up to a maximum seed investment of $20,000 from the program in return for an equity stake between 2.5 and 10 percent in their companies, depending on the size of the seed investment. The first round of the program will include five companies and will open its doors after the Sukkot holiday in mid-October. Over the course of 2013, an additional 10 companies are expected to join the program.