ISRAEL

• Israel has been ranked as a country that has an extremely skilled programming workforce.
• Language skills within Israel are a strong competitive advantage as compared to almost any other outsourcing country in the world.
• Software export sales are under $1 Billion.
• Israel is also home to product software development and some of this license revenue contributes to the number of $1 Billion.
• Israel has a workforce of about 30,000 software programmers. It is also a center where high quality product software and embedded software is produced. Custom application development is a smaller percentage of this revenue.
• Israel with India enjoys the patronage of large multinationals such as IBM, Microsoft, Motorola, Compaq, HP and Intel. This just goes to show the trust and the reach the big MNCs have in that country.
• But the country does not possess the political stability due to ingoing insurgence with Palestine.

However Israel will maintain its status as a developer of licensed intellectual property and a large portion of the workforce will be employed in this development. It will have a limited ability to match India's capability of building a large Software infrastructure.

ISRAEL: Leader

Geopolitical risk: High

Infrastructure/Communications: Good

English proficiency: Good

Labor cost advantage (average IT programmer salary): Varies wildly-$15,000-$38,000/year

Pros: A lack of natural resources propelled Israel into the knowledge-based economy early. Today, it is a major software center for the world and is growing at 25 percent a year.

Cons: Ongoing regional turmoil and violence continues to taint Israel's image.

Technology Capabilities: Israel is home to mostly boutique IT consulting and services companies focusing on customized applications or shrink-wrapped software production, in contrast to India's large, project-oriented enterprises.

Cultural compatibility: Good.

Government support/laws: Good. Highly supportive of R&D.

Quality initiatives: 6,447 ISO 9000 certifications.

Major customers: Canadian Imperial Bank of Commerce, Merrill Lynch, Shaw Industries.

Cities/Centers of outsourcing: Haifa, Herzliya, Jerusalem, Rehovot, Tel Aviv.

National IT organization: Israeli Association of Software Houses (IASH; www.iash.org.il).

Size of industry: $2.6 billion; more than 400 companies employ 35,000 professionals.

Total labor force: 2.4 million

Areas of expertise: Application development, application maintenance, packaged software implementation, application integration, security, e-business.