Category Archives: Outsourcing

Israel A Hub For High-Tech Action

Human Accomplishment, Intelligence, Israel, Outsourcing, Science, Technology

Contra the USA, Israel’s high-tech sector is thriving and the country is enjoying unprecedented “current accounts surpluses.” Yet quite a few political types, on the left and the right, wish to see parts of this hub of high-tech activity handed over to Katyusha operators.

Courtesy of the Etinger Report, here are some economic indices produced by a population that would fit into a couple of large American cities:

• Siemens acquired Israel’s solar energy Solel for $418MN, following Siemens’ 40% acquisition of Israel’s solar company, Arava Power for $15MN (Globes business daily, Oct. 16, 2009). Sigma Designs acquired Israel’s CopperGate Telecommunications for $200MN (Globes, Oct. 1). Britain’s M86 acquired Israel’s Finjan for $35MN (Globes, Nov. 4).

• Fitch International Credit Rating Agency has joined Moody’s (A1 stable) and Standard & Poor (A stable), maintaining Israel’s long-term foreign exchange and local currency credit rating at A and A+ respectively. Israel is one of the very few countries which have maintained its credit rating during the economic crisis of the last two years. According to Fitch, Israel’s stable banking sector, absence of “bubbles,” hawkish budget-deficit (curbing government spending) policy and stability of the high tech and services sectors have produced unprecedented current accounts surplus and foreign exchange reserves (Wall Street Journal, Nov. 6, Yedioth Achronot, Nov. 8). A 7%-13% rise in hiring has been recorded by Israel’s high tech sector during 2009’s third quarter (Globes, Oct. 26).

• “[Microsoft’s CEO], Steve Ballmer calls Microsoft as much an Israeli company as an American company, because of the importance of its Israeli technologies. Google, Cisco, Microsoft, Intel, eBay – says one of eBay’s executives – the best kept secret is that we all live and die by the work of our Israeli teams…John Chambers, Cisco’s CEO, has bought nine Israeli start-ups… Such economic dynamism has occurred in the face of war, internal strife and rising animosity from other nations. During the six years following the bursting of the tech bubble in 2000, Israel suffered one of its worst periods of terrorist attacks and fought a second Lebanese War, and yet its share of the global venture capital market did not drop – it doubled from 15% to 31%… Israel, a tiny nation of immigrants torn by war, has managed to become the first technology nation…” (James Glassman, Exec. Dir. Of the G.W. Bush Institute, Wall St. Journal, Nov. 23, 2009 book review of Start-Up Nation: The Story of Israel’s Economic Miracle).

• HP expands it R&D operations in Israel, hiring 100 persons during the next two years, in addition to its current 5,000 employees (Globes Business daily, Nov. 25). Microsoft’s newest anti-virus software, Microsoft Security Essentials, was developed in Microsoft’s R&D center in Israel (Globes, Oct. 1).

• Israel has been chosen to succeed Germany in heading the largest R&D network in the world, the “Eureka Initiative,” a pan-European, inter-governmental initiative that supports European innovation and oversees 1.5BN British Pound investments annually. Israeli companies have participated in 40 – out of 300 – Eureka projects launched in 2008. Eureka operates like the highly successful US-Israel Bi-National Industrial R&D (BIRD) Foundation (Israel 21c, July 27).

• The World Intellectual Property Organization (WIPO) has recognized Israel as one of the fifteen international centers (countries) for the search and testing of patents. Thus, global innovators will be able to apply – in Israel – to patent testing and approval, which will be recognized internationally (Ynet, Sept. 30).

• The Dutch Forbion Capital Partners – joined by Alice Ventures, Vitalife, Kreos Capital and IHCV – led an $18.5MN round by Israel’s NiTi Surgical Solutions (Globes, Aug. 12). Apropos IT, Dolphin Equity Partners, Inter-Atlantic Group and Hyperion Partners invested $17MN in a 3rd round by Israel’s SeaPass (Globes, Nov. 5). Yorkville Advisors Global extended a $15MN line of credit to Israel’s Mazor (Globes, Sept. 4). USVP led a $12MN round by Israel’s water-recycling BPT (Globes, Aug. 31). Japanese electrical giants led a $12MN 2nd round of private placement by Israel’s Plurality (Globes, Nov. 19). Dupont Capital, Saints Capital, Carlisle, Adams Street Partners, Deutsche Telecom (T-Venture) and Argonaut participated in a $10MN round of private placement by Israel’s Actelis (Globes Sept. 9). Trilogy Partners led a $9/4MN round by Israel’s Crescendo Networks (Globes, Aug. 14). The US-based Volcano Capital and Wheatley partners led an $8MN round by Israel’s VisionSense (Oct. 19). Pfizer, Johnson & Johnson and Index Ventures invested $8MN in Israel’s NovoCure (Oct. 1). India’s Kushla Ventures and the Silicon Valley-based Kleiner Perkins led a $7MN round by Israel’s eASIC (Globes, Nov. 5). General Catalyst, Spark Capital and Union Square Ventures invested $6MN in Israel’s Boxee (Globes, Aug. 14). Benchmark Capital and Tamares invested $5MN in a 2nd round by Israel’s Panaya (Globes, Aug. 6). 7Health Ventures led a $5MN round by Israel’s Activiews (Globes, Sept. 15). Benchmark Capital leads a $3MN 2nd round by Israel’s Zlango (Globes, Nov. 19).

'The Purchase & Sale Of Paper Instruments'

Business, Debt, Federal Reserve Bank, Outsourcing, Political Economy

It is undeniable that, for better or for worse, economist Paul Craig Roberts is a fiercely independent thinker. Make up your own mind, but I have long agreed that America’s outsourcing and trade deficits—the last being emblematic of a consumer society—are a sickly specter, although I shun Roberts’ illiberal recommendations:

“The main cause of this decline is the offshoring of U.S. high value-added jobs. Both manufacturing jobs and professional services, such as software engineering and information technology work, have been relocated to countries with large and cheap labor forces.

The wipeout of middle-class jobs was disguised by the growth in consumer debt. As Americans’ incomes ceased to grow, consumer debt expanded to take the place of income growth and to keep consumer demand rising. Unlike rises in consumer incomes due to productivity growth, there is a limit to debt expansion. When that limit is reached, the economy ceases to grow.

The immiseration of working people has not resulted from worsening crises of overproduction of goods and services, but from financial capital’s power to force the relocation of production for domestic markets to foreign shores. Wall Street’s pressures, including pressures from takeovers, forced American manufacturing firms to “increase shareholders’ earnings.” This was done by substituting cheap foreign labor for American labor.

Corporations offshored or outsourced abroad their manufacturing output, thus divorcing American incomes from the production of the goods that they consume. The next step in the process took advantage of the high-speed Internet to move professional service jobs, such as engineering, abroad. The third step was to replace the remains of the domestic workforce with foreigners brought in at one-third the salary on H-1B, L-1 and other work visas.”

[SNIP]

Our “moonbat” frequent poster will no doubt agree with the following Robert’s assessment:

What is happening is that the hundreds of billions of dollars in TARP money given to the large banks and the trillions of dollars that have been added to the Federal Reserve’s balance sheet have been funneled into the stock market, producing another bubble, and into the acquisition of smaller banks by banks “too large to fail.” The result is more financial concentration.

The expansion in debt that underlies this bubble has further eroded the U.S. dollar’s credibility as reserve currency. When the dollar starts to go, panicked policy-makers will raise interest rates in order to protect the U.S. Treasury’s borrowing capability. When the interest rates rise, what little remains of the U.S. economy will tank.

‘The Purchase & Sale Of Paper Instruments’

Business, Debt, Economy, Federal Reserve Bank, Outsourcing, Political Economy

It is undeniable that, for better or for worse, economist Paul Craig Roberts is a fiercely independent thinker. Make up your own mind, but I have long agreed that America’s outsourcing and trade deficits—the last being emblematic of a consumer society—are a sickly specter, although I shun Roberts’ illiberal recommendations:

“The main cause of this decline is the offshoring of U.S. high value-added jobs. Both manufacturing jobs and professional services, such as software engineering and information technology work, have been relocated to countries with large and cheap labor forces.

The wipeout of middle-class jobs was disguised by the growth in consumer debt. As Americans’ incomes ceased to grow, consumer debt expanded to take the place of income growth and to keep consumer demand rising. Unlike rises in consumer incomes due to productivity growth, there is a limit to debt expansion. When that limit is reached, the economy ceases to grow.

The immiseration of working people has not resulted from worsening crises of overproduction of goods and services, but from financial capital’s power to force the relocation of production for domestic markets to foreign shores. Wall Street’s pressures, including pressures from takeovers, forced American manufacturing firms to “increase shareholders’ earnings.” This was done by substituting cheap foreign labor for American labor.

Corporations offshored or outsourced abroad their manufacturing output, thus divorcing American incomes from the production of the goods that they consume. The next step in the process took advantage of the high-speed Internet to move professional service jobs, such as engineering, abroad. The third step was to replace the remains of the domestic workforce with foreigners brought in at one-third the salary on H-1B, L-1 and other work visas.”

[SNIP]

Our “moonbat” frequent poster will no doubt agree with the following Robert’s assessment:

What is happening is that the hundreds of billions of dollars in TARP money given to the large banks and the trillions of dollars that have been added to the Federal Reserve’s balance sheet have been funneled into the stock market, producing another bubble, and into the acquisition of smaller banks by banks “too large to fail.” The result is more financial concentration.

The expansion in debt that underlies this bubble has further eroded the U.S. dollar’s credibility as reserve currency. When the dollar starts to go, panicked policy-makers will raise interest rates in order to protect the U.S. Treasury’s borrowing capability. When the interest rates rise, what little remains of the U.S. economy will tank.

American Newspapers Dying Of Self-Inflicted Wounds. Good.

IMMIGRATION, Journalism, Left-Liberalism And Progressivisim, Media, Multiculturalism, Outsourcing, Propaganda

I join Peter Gadiel in celebrating some creative destruction–the demise of the newspaper industry.

Writes Gadiel on VDARE.Com:

“American newspapers are dying. Let us celebrate, since in their extinction lies the only hope for journalism.” …

“Newspapers were largely owned, edited and to a considerable degree staffed by people who actually were from the town about which they wrote. Thus, when you got the Sheboygan (Wis.) Press, The Indianapolis Star or the Florence (Ala.) Times-Daily it was a pretty sure thing that when you read an editorial, the news pages, the women’s page—whatever—you were reading something written or at least edited by someone who had roots in that city.”

“Not so today. The people writing the editorial in the Hendersonville (N.C.) Times News or “reporting” about events in the Asbury Park Press are corporate gypsies who come from someplace else via some school of journalism located somewhere else. They are all waiting to move to a bigger paper in a bigger city on the way up to starting the trip all over again back down in the small towns as assistant editor.”

“What’s worse, the gypsies who staff those papers are hired by people who are answerable to the likes of ‘Pinch’ Sulzberger of the NY Times…”

More.