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Israel's High-Tech Boot Camp: the Army From The LA Times
August 24, 2000
Talpiyot is not a country club, but a rigorous training course aimed at
turning out a corps of master technologists for the military--and more.
"Our idea was to build the next generation of the country's leaders," says
Yair Shamir, a high-tech businessman here who, as chief of electronics for
the army, helped found Talpiyot.
Rather than enlisting for the standard army term of three years, the fewer
than 25 youths selected for Talpiyot each year serve for nine. Rather than
map out their own academic career, theirs is chosen for them from among the
physics and higher mathematics offerings at the Hebrew University in
Jerusalem. There they are sequestered from most of the other students--not
physically, for they share many classes, but by unspoken social tokens: They
are younger than most other college students, who have already completed
their army service, and unlike anyone else on campus, they attend in
uniform.
Nevertheless, almost no one ever turns the invitation down. Talpiyot--the
nearly untranslatable Hebrew word of biblical origin suggests a structure
built to be imposing and impregnable--not only represents the pinnacle of
brainpower in the Israeli army, it is an open ticket into the country's
high-tech world.
The Israeli economy has transformed itself over the last few years from an
economic laggard into one of the world's most important high-tech
competitors, boasting the third-highest number of Nasdaq-listed companies in
the world and billions of dollars a year in new venture investments.
"After I got chosen, my friends said, 'You'll be in a start-up [business]
after the army,' " recalls Ma'ayam, now 36 and a vice president and general
manager at Compugen, a private company that makes tools for the analysis of
genetic code.
Talpiyot is also a sign of how closely tied the Israeli army has been to
this country's high-tech boom. Far more than any other government
institution or even the country's world-class establishments of higher
education, the army has been the indispensable factor in the creation of the
entire industry.
This catalytic process has been so successful, in fact, that the army itself
now faces difficulties competing with its own offshoots for the best young
talent in the country.
As small a group as they are, Talpiyot veterans are prominent among the
founders or managers of Israel's most successful or promising high-tech
ventures. Some companies brag about their array of Talpiyots the way others
do the number of PhDs on their research staffs. At Compugen there are 12
Talpiyots, including one co-founder.
Across the industrialized world, of course, military demand has always been
a factor in technological innovation. But in Israel, the relationship goes
far beyond the conjunction of money and necessity that defines what Dwight
D. Eisenhower branded the military-industrial complex.
Israel's military has not only been a customer of advanced technologies, but
a training ground for its high-tech leaders. Many honed their competitive
skills in the cockpits of its jet fighters or as managers of
multibillion-dollar research and procurement programs. They in turn have
carried the Israeli army's creative and independent character into the
country's high-tech sector to a degree that would be impossible anywhere
else.
"The military plays a different social role here [than in other countries],"
says Gideon Tolkowsky, a former fighter pilot who now heads his own venture
capital firm. "It's compulsory. This is a smaller country, and the military
is more entrepreneurial--for better and worse."
In contrast to the United States, where today's all-volunteer army is very
much an expression of socioeconomic class, the Israeli military sits
squarely at the center of Israeli society. To people here, the army is more
than a military organization that has repeatedly saved the country from
extinction; it is invested with a large part of the national mystique, the
way the French identify with their language or the Japanese with their
imperial history.
Israelis have viewed service in the army as a unifying ritual ever since its
founding in 1948, when it was feared that not even a common religion might
do the job of synthesizing a single nation out of tribes of Jews from dozens
of social and ethnic strata across Europe and Asia.
Israelis like to believe, at least superficially, that it is a "people's
army" that reflects their communal character. Its popular image is that of
brashness, innovation and self-confidence. And its respect for learning is a
byword: Where American families might regard the army's interest in their
children as a threat or intrusion, Israeli families are more likely to brag
about their school-age children's army dossiers.
"The Israeli army is not a real army," says Yitzhak Molcho, a prominent
lawyer and advisor to former Prime Minister Benjamin Netanyahu. "It has the
traditions of an army, but also a plan where the smartest, most courageous
youngsters find new challenges. The law enables the army to screen
everybody, then it exposes them to new technologies at the age of 18 when
their minds are at the top."
Because most Jewish Israelis must complete their compulsory service of up to
three years (one year and nine months for women) before they can enter the
work force or attend college or university, it is probably the country's
single most important socializing force. It is in the military that many
Israelis typically forge friendships and connections--and make
reputations--that last a lifetime.
"How do you find out about someone in this country?" remarks A.I. Mlavsky, a
leading venture investor in Tel Aviv. "Make one phone call to someone who
can tell you what he did in the army."
Military service leaves a durable mark on many Israelis. Entrepreneurs here
spout maxims from their army experience the way American CEOs spout football
analogies. ("My first day of training in the army paratroopers, the sergeant
major gave the best business advice I've ever had. He said, 'If you stand
still on the ground, you're dead. You have to outrun the bullets,' " and so
on.)
Aryeh Finegold is a former paratrooper and serial entrepreneur now on his
third successful software start-up. "At almost every company I've worked
at," he says, "people hear from me about the battle of San Simone, war of
'48. The Arabs were surrounding a small Israeli group, heavy casualties on
both sides. The Israelis radioed back to their commanders, asking permission
to withdraw. They finally got it on the third day. Halfway down the hill,
they realized it's too quiet. It turned out the Arabs had left first. So if
you think you're having a hard time, look at your competitors."
The storied cohesiveness of Israeli research and development teams can often
be traced to the bonds of mutual service.
"Every Israeli kid undergoes two ceremonies: his bar mitzvah and the
'blanket,' " says high-tech investor Yossi Vardi. "On the first night of
basic training, the commander says, 'This barracks is filthy and you're all
going to have to stay here over the Sabbath and clean it.' So one guy stands
up, points his finger at another, and says, 'He's the dirty one. It's his
fault.'
"That night 25 guys put [the finger-pointer] under a blanket and beat him
until he's unconscious. That's so he learns how dangerous it is to point
your finger at another in your unit. And nobody has to put up signs in the
barracks saying they believe in teamwork."
A disproportionate number of Israel's high-tech managers are drawn from one
of several elite army units whose very names have a special resonance for
the average Israeli--the intelligence corps' fabled 8200 unit, for example,
which is so secret that, even years after they have mustered out, its alumni
are often loath to talk about what they did in the army.
For its part, the army takes its role as a nurturer of talent for the
civilian sector seriously.
"This is the leading computer institute in Israel," says Lt. Col. Shai
Basson, director of the military's School for Computer Science, located on
an army base nestled among the high-rise office towers of Tel Aviv's diamond
district. The program, he contends, is less theoretical and more demanding
than those at the country's leading institutions of higher learning.
"Some students who are able to pass easily in university can't adapt
themselves to the demands of the army," he says, surveying 25 olive
drab-clad students developing a tank battle simulation. (The assignment aims
to teach them how to compile computerized data to help commanders make
tactical decisions in the field.)
"The [university] passing grade is 60; ours is 70. We teach our students to
think as soldiers, not to surrender. When our students have a bug to solve,
they know they will solve it, not pass it on to their professor," Basson
says.
None of this is to say that the army's influence on high-tech is invariably
positive.
Groups excluded from military service, for one thing, risk ending up on the
wrong side of Israel's widening digital divide. That includes Israeli Arabs.
Exempt from the draft, they are permitted to volunteer for the army, but
even then they are unlikely to win assignment to the intelligence or
communications units that afford the greatest entree to the civilian
high-tech economy. The same goes for ultra-Orthodox religious students, who
are granted deferments into their mid-20s.
Moreover, there is a growing concern here that the soldierly attributes that
have been most beneficial to Israel's entrepreneurial start-ups become
impediments when companies need to evolve into mature organizations.
"The army's less disciplined and more aggressive," says Tolkowsky, the
venture capitalist, "but its ability to manage large structures is in
question."
Another concern is the impact of the high-tech phenomenon on the military
itself. In a sense, the army has become a victim of its own success in
seeding the civilian sector: It is no longer able to compete with high-tech
start-ups for the best young engineers, who can earn more than $80,000 a
year in civilian life. It is not unheard of for trained engineers to begin
shopping their ideas to venture capitalists before they even complete their
service.
"A [civilian] engineer with one year of experience gets more than I do in
salary and gets a car, which is something we don't give to anyone below the
rank of lieutenant colonel," laments an air force colonel at military
headquarters.
To combat the brain drain, the army has started new programs offering
signing bonuses of up to $15,000 to talented soldiers who extend their
enlistments--along with the all-important rank of lieutenant colonel. Also
under consideration is a plan to allow some soldiers near the end of their
enlistments to work part-time in the private sector.
Still, there is a feeling in Israeli business that military service will
remain the foremost element in the shaping of the Israeli entrepreneur.
"The whole Israeli army is oriented toward quick decision," says
entrepreneur Finegold, preparing to fire off another maxim from the Israeli
military.
"When the U.S. is at war, you have all the time in the world. If
everything's not there, you wait. In the Israeli case, you don't have all
the time in the world, not when a tank can be driven from Damascus to Tel
Aviv in a few hours. You can't cover all the bases; you don't have
everything you need. And you have to win."
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