University of Florida

College of Architecture

Initial Explorations for the Development of High Technology

Computer Industries in Palestine

Chapter One

Essential Characteristics of the Industry

THE IMPORTANCE OF TECHNOLOGY DEVELOPMNT

The birth of the Palestinian nation is occurring at an optimal point in history for the development of high technology computer industries. The changes that the world has undergone in the past decade have transformed the basis of economic power in an increasingly global world market. The availability of natural and military resources no longer guarantee economic success. Today, human and technological resources are the well from which nations must draw upon to nurture economic growth. Recent world history provides dramatic support to these arguments with the failures of the Soviet Union, and the successes of Eastern economies such as Japan’s.

The Soviet Union collapsed not due to any war or natural resource shortage, but because of a failure to keep pace with the world’s shift towards a technology-based economy (Peres, 1996). The Soviets did not have a technology development plan to keep them competitive with the rest of the world, and this contributed to their shocking and almost “over night” collapse. On the other hand, Japan is a perfect example of a nation which has become an economic super power based human resources and well developed hi-tech industries. The Japanese, who were all but destroyed at the close of the Second World War, built themselves up steadily and quickly based on a strategy of human resource utilization. Focusing on education and technology, Japan overcame its natural resource and geopolitical disadvantages to dominate many sectors of the world’s economy.

The lessons which the PNA should extract from recent history are simple. A strong focus on the development of technology infrastructure and industry in Palestine is imperative. The PNA should follow the example set by the governments of other small nations which have helped to train their citizens to cope with, and excel in the fast paced high technology world which we live in. Not doing so would relegate the Palestinian people to an economy based on manual labor.

Physical labor is not a smart bet for the economic future of Palestine. Agriculture, manufacturing, and other traditionally physical, “hands-on” processes are constantly being changed by industrial automation. Technological developments are taking human hands out of the dirt and factories of the Planet, and putting them onto the keyboards which program machines to do repetitive, physical work. It seems clear that a labor force that does not know how to work with technology will eventually be replaced by it.

Palestine has the exiting opportunity to orient the development of its economy and infrastructure to the new age of Information technology. Unlike many existing nations who must restructure their strategic and physical approach to technology, Palestine can “start off on the right foot.” The PNA can channel the funds it receives from donor nations and organizations towards investments in education and information technology infrastructure. Thus, setting up an economy, which feeds off of the emerging hi-tech market.

It is not enough to simply accept the fact the fact that computers and high technology are the wave of the future. It important to understand where this industry came from, where it is, and where it is going. This chapter will comment on the history; current, essential characteristics; and expecte future trends of the computer and high technology world. The text by no means attempts to present a thorough or comprehensive review of any topic, as this would require numerous volumes and thousands of pages of material. Rather, it conveys the message that technology has developed at a mind boggling pace, and now plays a critical role in every aspect of human existence. The PNA should view technology development as one of the key vehicles for the success of a young nation. Technology development has no limits.

COMPUTERS: A HISTORICAL PERSPECTIVE

Since English mathematics professor Charles Babbage proposed the first general-purpose computer, called the Analytical Engine, around 1830, the world has never been the same. Babbage’s computer was steam powered and consisted of over 50,000 components, including perforated card input devices, a “memory", and a “mill” to perform mathematical calculations. The concepts introduced by Babbage eventually led to the development of computers as we know them today (JME, 1996),

Another major breakthrough came in 1889 by American Inventor Herman Hollerith. Hollerith invented a punch card machine to tabulate the 1890 US Census. The machine accomplished in six weeks what Census offcials had feared would take ten years. This punch card reader which had complied the 1890 census was the first product introduced by the Tabulating Machine Company, which later became IBM. Both business and government used punch cards for data processing until the 1960’s (JME, 1996)

The first generation of modern computers is considered to have been from 1945 to 1956. The Germans and British had developed simple computers during W.W.II. Howard H. Aiken, a Harvard engineer working with IBM, succeeded in producing an all-electronic calculator by 1944. By 195( the transistor was at work in the computer. Coupled with early advances in magnetic-core memos, transistors led to the second generation of computers that were smaller, faster, more reliable and more energy-efficient than their predecessors (JME, 1996).

Second-generation computers replaced machine language with assembly language, allowing abbreviated programming codes to replace long, difficult binary codes. Second generation computers contained all the components we associate with the modern day computer: printers, tap storage, disk storage, memory, operating systems, and stored programs. By 1965, most large business routinely processed financial information using second generation computers. More sophisticated high-level languages such as COBOL (Common Business-Oriented Language) and FORTRAN (Formula Translator) came into common use during this time. New types of careen (programmer, analyst, and computer systems expert) and the entire software industry began with second generation computers (JME, 1996).

The third generation of computers is considered to have been from 1964 to 1971. Leading to this new generation, Jack Kilby, an engineer with Texas Instruments, developed the integrated circuit (IC) in 1958. The IC combined three electronic components onto a small silicon disc. Scientists later managed to fit even more components on a single chip, called a semiconductor. Computers became ever smaller as more components were squeezed onto the chip. Another third-generation development included the use of an operating system.

We are now ending the fourth generation of computer technology, which began around 1971. The Intel 4004 chip, developed in 1971, advanced the integrated circuit by locating all the components of a computer (central processing unit, memory, and input and output controls) on a minuscule chip. This generation saw the introduction and proliferation of the personal computer (PC). By the 1980's, very large scale integration (VLSI) squeezed hundreds of thousands of components onto a chip. Ultra-large scale integration (ULSI) increased that number into the millions. Computers were suddenly found in every part of our work and home life. Cars, telephones, microwave ovens, and other electronic devices harnessed the computer’s great processing power to bring us more efficient service. Computers continued to shrink from mainframes to desktop to laptop and finally too small hand held units. The developing software industry made these computers more users friendly and developed thousands of applications to bring computers into every aspect of business and personal life.

The IBM PC, introduced in 1981, became the most widely used computer in the home, at the office, and in schools. The 1980's saw an expansion in computer use in all three arenas as clones of the IBM Pthe personal computer even more affordable. The number of personal computers in use more than doubled from 2 million in 1981 to 5.5 million in 1982. Ten years later, 65 million PCS were being used. In direct competition with IBM's PC was Apple's Macintosh line.

During this entire computer revolution, equally impressive and progressive development was occurring in other technology sectors such as communications and consumer electronics. The 1980’s and 1990’s saw a huge push towards the integration of all these technologies, and a successful attempt to network various computer centers. Networked computers allowed individual computers to form electronic co-ops. Using either direct wiring, called a Local Area Network (LAN), or telephone lines, these networks could reach enormous proportions. A global web of computer circuitry, the Internet, for example, links computers worldwide into a single network of information (JME, 1996).

THE CURRENT STATE OF THE INDUSTRY

In 1995 the world hi-tech market was valued at 1.8 trillion dollars. Just as a point of comparison, hi-tech is Israel’s second largest industry, valued at 6 billion dollars. Israel holds only one third of one percent of the world market, and yet its hi-tech industry is its healthiest economic sector (with the possible exception of the diamond industry). Israel is an example of how entry into the world computer and technology market, however small it may be, can have tremendously positive effects on a nation’s economy. Hi-tech industries in Israel and directly employ about 40,000 people, and subsidiary industries employ another 40,000. Because Israel and Palestine are so close physically, and because they share many of the same geopolitical advantages to world markets, the hi-tech industry in Israel could serve as a prototype or example for development in Palestine. This subject will be explored in detail in Chapter 6 of this report. First, it is important to understand the overall characteristics of today’s computer and high technology industry from a more global perspective.

THE ROLE INFORMATION TECHNOLOGY PLAYS IN THE WORLD TODAY

For Information Technology (IT) to be fully utilized by the PNA as it plans for the future of the Palestinian nation, the members of the Ministry of Planning must understand the implications that IT has in every sector of society. This section of the report targets six segments of society that have been profoundly effected by information technology. These are: communication, health care, education, public administration and management, transportation, and entertainment. For each topic, one or two recent developments will be discussed with respect to the improvements that these developments have made over more conventional systems.

Communication

No technological development in recent memory has generated as much attention as the Internet. The whole world seems to be fascinated by this information highway which currently links together more than 40 million people around the world. By the year 2000, 500 million people will be on the Internet (source: SIMBA). In a matter of a few years the Internet has drastically changed the way people communicate. Some experts suggest that the Internet may one day replace telephones and fax machines as the world’s primary communication tool. It is already possible to speak via the Internet using audio converters, and computer video conferencing is rapidly gaining popularity. For a complete review of the Internet, see the article entitled “Economic FAQ’s About the Internet” in Appendix A.

In addition to reducing the time and cost components of communication, the Internet has also made a drastic change in the quantity of information that people can now share. Once hooked up to the Internet, users are free to explore endless amounts of information on any topic and to retrieve this information into their own private systems. It is radically changing the way academicians, professionals, and others perform research. Through the Internet anyone can access information which had previously been restricted to certain geographic areas or only to people with certain professional credentials. The freedom to access information anywhere at any time may be the greatest success of the Internet.

In considering Internet system development, planners for the PNA must understand that the Internet and other IT carriers are analogous to highway systems. When they are overcrowded they become very slow and lead to many "collisions". There is a definite need to invest in the information highway infrastructure to the extent that all Palestinians could be afforded access to the Interment.

In addition to the Internet, the communications industry is focusing on the following areas:

I. data compression

III. cellular and telecommunications

The communications industry is migrating towards networked ATM systems (Kaul, 1996). The PNA should encourage the telephone . Palestine to develop an ATM network in response to this very important trend. Bezeq (Israel's telephone company) is currently developing such a network in cooperation with the Technion and The Chief Scientist. Also, the development of Broad Band and Fiber Optics are important preparations which must be made for the multi-media age.

Health Care

Imagining and informatics management are two technologies which are 'improving the way doctors and health care managers handle their work. Medical imaging, technologies have advanced to the point that some hospitals have phased out the x-ray slide system that has been the standard for decades. New computer pro-rams are able to display and analyze medical images- and help doctors diagnose any problems that a patient may have. The imaging. technologies provide greater detail and resolution than conventional systems, and eliminate much of the human error which can occur during analysis procedures.

Through the use of E-mail doctors can instantly send images or patient information to other doctors. The speed at which medical information can be processed and communicated is potentially life saving.. It also allows specialists from all over the world to consult each other and make decisions based on the expertise of many doctors. Imaging and information communication technologies have certainly improved the quality of medical care that the health professional is capable of providing.

Hospital informatics management is another of the many areas which IT has improved. Hospitals are infamous for piling up mountains of paperwork. The recording and organisation of hospital records requires ' fleets of personnel and tremendous storage space. If record keeping procedures are not efficient and systematic, they cost hospitals great amounts of money, and interfere with the safe care of patients. To solve this information management problem, many hospitals are turning to outside contractors to come in and computerize their systems.

Outsourcing can be both a temporary solution for short term financing needs, and a permanent way to create more efficient informatics management. Relationships between hospital clients and outsourcing suppliers work best when the client controls the degree of service and clearly defines its expectations of the supplier. A group of hospitals in Israel which recently computerized all their record keeping, systems reported that a 30 percent reduction in the manpower needed to run labs paid for the entire equipment and systems investment. This did not even account for the increased quality and reaction time allowed by the new informatics systems.

Education

Education and information technology form a unique partnership. The education system provides the hi-tech sector with the manpower it needs to survive, and in turn, the technology sector continually improves the teaching methods used by the education system. Unfortunately,

Universities have not been able to produce technology professionals at a fast enough-h pace to keep up with the demand set by the expanding hi-tech market. Many governments with healthy hi-tech industries have set up special programs to expose their youth tthtechnology professions, and to encourage these career paths. Such programs would be necessary in Palestine should the covernment decide to pursue a technology-based economy. Promotion. and investing in education is first step towards creating hi-tech industries.

Three dimensional integration (3DI) and computer managed distance beaming, (CNML) exemplify the progress that IT has brought to education. 3DI is a technique where computers are added to the traditional student-teacher relationship, replacing the former dialog with a new "trialog." An application of 3DI would be hooking up a computer to a physics experiment. The computer,-.r could monitor the experiment along with, or instead of the instructor. The computer prevents Calculation errors and does not allow the student to reach illogical conclusions. The computer may also act as the tutor or instruction manual

Computer managed learning is a technique where the teacher is linked to each student through a LAN. While students work on assignments presented on various software applications, the teacher is able to monitor the progress of each student. This allows students to work at their own pace and still receive attention from the instructor. Ale teacher maintains control over the class by being, able to monitor any workstation at any 6=. When it comes time for examinations, they are administered by computer and are graded immediately. Instant feed back for students and no more grading for teachers are just two of the many advantages of CML.

It is impossible to ignore the Internet when discussing the effect of IT on education. As a research tool of unprecedented quality and quantity, the Internet offers an excellent opportunity to invest in the younger Generation and in education. Despite this fact, less than 5% of schools in the United States are hooked up, and only 2-3% of Israeli schools are connected (Rashty, Heb. U., 1996). If Bill Gates was correct in saying that, "the most important use of IT is to improve education", then the PNA should make it a priority to connect its learning institutions to the Internet.

Public Administration and Management

The PNA should conduct an in-depth study on the benefits that IT can provide to public administration services. Since the Palestinian goverment is building its public services and administration complex from the ground-up, it has the ability to implement the most effective systems that IT has to offer. Public organisations have more freedom to invest in IT than private companies, because there is less pressure to worry about returns. Long term projections encourage investing now in systems that connect government offices together through communication networks. The goal of IT in public administration is to eliminate the need for high numbers of bureaucratic offices geograpl@cally and informationally spread out around the country.

Israelis can now go to the post office to transfer the ownership of vehicles. This kind of linkage of governmental records and sevices through IT is creating, a more efficient and user-friendly system for the public. The PNA may look forward to a day when government employees are primarily manners and decision makers, and free from the' task of being "middlemen" who disseminate information and documents to the public. Implementing IT in public administration could help the PNA avoid the kind of excessive bureaucracy that costs the United States billions of dollars every year.

Transportation

Information Technology currently plays a huge role in the shipping and transportation industries, and may eventually provide a solution to the metropolitan world's traffic problems. Communication and global positioning system (GPS) technologies allow people to arrange and monitor travel like never before. Airlines use complex computer systems to control air traffic and to organize and book their travel schedules. Shipping companies depend on IT to route their cargo and ensure it arrives on time.

Nobel Prize Winner, Amo Penzias of AT&T Bell Laboratories in the United States has proposed an IT based solution to the seemingly insurmountable traffic problems many of the world's cities are facina. Dr. Penzias' proposal involves the creation of a taxilbu&'limousine system which is fully tracked by GPS and which can be accessed by all travelers who have their own personal GPSequipped cellular phones. The details of the proposal are not important for this discussion. The $ important issue is that technolo. professionals are constantly working, on solutions to problemswhich will make our lives more efficient and effective.

Entertainment

Two very important thinas are happening in the entertainment industry. Consumer electronic devices are meraing to nether, and the world's broadcasting standards are chan-ing from analog to digital Major electronics fl= around the world are working on the creation of a single appliance which combines today's TV, stereo/CD, PC, VCR, telephone, etc. Such an appliance would revolutionize the electronics industry and change the way people or-anize their living, rooms forever. This "afl-in-one" unit will interface with cable, telecommunications, satellite, and other multi-media information

delivery systems.

An important consideration for the PNA as it plans for national infrastructure is the gradual shift in the world's broadcasting standards. The world transmission standard for decades has been analo,a, but several European nations have recently adopted digital broadcasting standards. Palestine couldbecome the first Middle Eastern nation to adopt the diaital standard for audio and video broadcasting. Accordina to George Waters, Director of the Technical Department of the European Broadcastina Union (EBU), analog transmission is being phased out due to crowded frequency bands and poor quality reception.

The EBU's new standards for radio and television broadcasting are called EUREKA 147, and DVB (digital video broadcasting), respectively. The first wave of digital mass media products includes CD (Compact D!-,b), S-dat (digital tape), S-dat, DCC (Digital Compact Cassette), MD (mini disk),and CDI (interactive CD's). Eureka 147, which uses DAB (digital Audio Broadcasting) has many advantages over traditional radio broadcast, and has been adapted as the new European standard. it produces hi-her quality (CD quality using VHF, UHF, or other); is free of interference; and is designed to service a mobile audience. DVB is not as far advanced as Eureka, but is nearly a complete system. DVB is the digital delivery of satellite, cable, and terrestrial transmissions. The systems for satellite and cable are finished and standardised, and the terrestrial system will soon be complete.

Mr. Waters advises that the infrastructure investment for the switch to digital broadcasting will focus on receivers. Most broadcasters around the world have sufficient equipment to send digital signals, and it will be the consumers who will have to upgrade to digital quality receivers. Depending on how well digital broadcasting systems are accepted by the public, this could lead to a huge future market in digital broadcasting receivers.

WHAT THE FUTURE HOLDS

The brief discussion in this chapter has established the importance and presence of the computer and high technology industry in today's world. All indications are that the importance of this industry will only increase in the future. IT will continue to make the world a smaller place and bring. economic opportunity to places which have excellent human resources. It is exciting to ponder what technology development may have in store for us in the future.

The next generation of computers will open up new economic markets. and further impact the way we live our lives. Following. Recent engineering advances, computers may soon be able to accept spoken word instructions and imitate human reasoning. The ability to translate a foreign language is also a major goal of the next generation of computers. Many advances in the science of computer design and technology are coming together to enable the creation of this next generation ofcomp: parallel processing, and superconductor technology, which allows the flow of electricity with little or no resistance, greatly improving the speed of information flow.

The challenge awaiting those who want to develop high technology computer industries in Palestine is figuring, out where to start. This first step in this process will be to analyse the various market segments of the global industry to identify where the best economic prospects lie.

Chapter Three

Explorations of Israeli’s HI-Tech and Computer Industries

INTRODUCTION

The high technology computer industry has transcended political boundaries and geographic barriers to become a truly global industry. The descriptions of many of the world's computer and hi-tech markets contained in Chapter 2 attest to the fact that Palestine's options for entering this industry a-re quite broad. Opportunities and potential markets can be found at nearly every corner of the globe. It is important to mention, however, that some of the best opportunities can be found very close to home, within the Israeli computer and hi-tech industry.

If the Palestinian government wants to encourage development in the hi-tech, computers, and electronic fields, it should take note of Israel's impressive 6 billion dollar hi-tech industry, and understand the business potential that exists there. In a relatively short amount of time, Israel has managed to become a technologically independent nation, as well as a world leader in several computer and hi-tech fields. The industry overall is growing at a rate of about 20 percent per year, and certain submarkets are experiencing explosive growth of 30 to 50 percent annually.

Segments of the Israeli industry, such as computer software, biotechnology, and electro-optics, are perfect examples of what an excellent human resource base can accomplish in short amount of time. Over 4 billion dollars of the hi-tech industry's 6 billion dollars of annual production are presented by exports. Exports of Israeli software have crown from 5 million to about a quarter of n dollars in the past decade. During the 1980's alone, the electro-optics industry grew in sales m $112 million to $912 million. The biotechnology industry, which was non-existent in Israel ten years ago, reached $265 million in sales by the start of 1994.

The hi-tech industry's impressive output and growth statistics translate directly to jobs in Israel. In fact, this booming industry is terribly under supplied with human resources, according, to the chairman of the Electronics and Software Division of the Manufacturers Association of Israel. Israel's hi-tech industry currently employs about 40,000 professionals and technicians, and subsidiary industries in Israel employ another 40,000. Israeli newspapers are constantly full of want adds to satisfy the demand for over a 1000 more professionals this year alone. Israel has even considered importing programmers and other technicians from abroad to allow the continued growth of the software and computer markets.

Studying the success and character Israeli computer and hi-tech industries offers several benefits to the Palestinian people:

- Israel provides a model for how to develop technology based industry in the Middle East.

- Resources critical to the development of hi-tech industry exist in Israel and may be utilized by the Palestinians.

- Joint venture, co-operative, and subcontracting-type relationships could be developed to help Palestine enter the high technology computer industry.

A brief study of the Israeli hi-tech industry was conducted to determine how this industry might best be utilized by Palestine in its efforts for economic development. The objectives of the study were to:

1. Characterize and quantify the components of the industry

2. Determine the key factors in the industry’s success

3. Obtain reactions from people within the industry as to the potential for developing business between Israeli and Palestinian Companies

CHARACTER AND SIZE OF THE ISRAELI INDUSTRY

The most recent Publication of the quarterly Foreign Trade Statistics by Israel's Central Bureau of Statistics listed exports of electromechanical and hi-tech products for 1994 at approximately 4.5 billion dollars. Sales are up for 1995 and the M-tech industry is quickly becoming Israel's largest revenue producer. The Israeli government has recognized the crucial role that this segment of the economy plays in the nation's overall economic health, and has created several organizations to encourage research and development, foreign investment, and start-up of new companies. Israel currently holds significant shares of the world market in the fieldsOf Computer software; agrotechnology control and measurement devices; electro-optics, medical and biotechnology; aviation; and hi-tech research and development.

Israeli SOftwire Export Sales

(source., Israel EXPort Institute)

The Israeli computer and information technology sector is focused On Software production and R&D. Many of the world's largest compter Companies have set up Operations in Israel. Israel's R&,D facilities read like a 'who’s who " Senli Of the COmr)uter world. IBM@ Microsoft, Dilitd Equipment U MotorOla, Inte@ and National, conductors are just a few of the giant c(Inpaiiies that have set up Plants in IsraeL in the past, Israeli operations have cej2tered on the developnej2t of new technolocv, and relatively few consumer products have been produced There seems to be a recent push, 0 Increase Production in the region, evidenced by'the const ruction of new fabrication Plants by Intel and IBM.

Experts in the computer industry state that Israel functions as a technology hub within the global

market. Products are typically researched and designed in Israel, sent to the cheaper labor market.

Far East for a-,,wmbly and production, and marketed throu@,h centers in the United States and

Europe.

Experts disagree over whether Palestine should consider breakinc, into East Asia's large share of the lies market. Proponents arcue that doina, so would not require highly developed technical an resources, and would provide Palestinians with an entry-level position into the high oloc,y computer industry. Opponents to this idea arcue that Palestinian wace rates and costs vina are not low enough to effectively compete with the Far East. Also, the trend towards mation in assembly and manufacturinc, is steadily decreasing the demand for cheap labor.

FACTORS TO ISRAEL'S SUCCESS

Human Resources

IsraeI's areatest asset is thought to be human resources. Israel's universities, research and

development institutes, the Technion, and constant inflow if hia,hly educated immigrants produces a well -stocked technological work force. That Israel has emerged as a world technology development leader is no accident. Israel's human technolo ay resources, on a per capita basis, are n,a,st the world's hiahest. There are well over 15,000 active computer specialists workinc, in Israel and over 7000 software designers. There are over 5000 scientists, encincers, and technicians working in other hi-tech fields. This rich bank of expertise has Guaranteed Israel's future in the hi-tech world.

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Israel's Graduate Training

in Scientific and Engineering Discpl.

In developing a plan for technological development in Palestine, the PNA should examine its current human resources and invest in education. V@He the assemblies and production markets are open to an only marginally skilled work force, the sophisticated production and development markets require extensive technical human resources. Institutions must be set up to begin an inflow of scientists.engineers, and technicians into the Palestinian work force.

Israel's Original Research

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Infrastructure

Israel's success in the hi-tech arena has also been highly dependent on the existence of excellent transportation, industrial, and communications infrastructure. Born out of military necessity, the Israeli aove=ent beaan the development of independent highway, industry, and telecommumcations networks in the 1950's and 1960's. Israis nofully linked to the world's "information highway." Israeli's can access limitless amounts of information from their living rooms by signing on to the Intemet. A much improved highway system allows for the efficient transportation of products and workers between the country's main centers of business. Major industrial parks operate at several locations in Israel. 71e largest are found in the Haifa, Tel Aviv, and Jerusalem areas; but several small communities are supported almost solely by their industrial parks.

Tle PNA can access one of the world's most advanced telecommunication infrastructures in Israel. In fact, the telecommunications industry is one of the fastest crowina sectors of the Israeli economy, with over 200 million dollars of foreicn revenue Generated in 1994 alone. The proximity of these resources to Palestine is an encouragina sign. Networks and systems in Israel could be extended to Palestinian communities at a much lower cost than building the infrastructure independently.

POTENTIAL FOR DEVELOPING BUSINESS RELATIONSHIPS

Palestine's proximity and ties to Israel present unique opportunities for doina business with Israel companies working in the hi-tech and computer fields. Beyond just the economic factors, there are sociological and political benefits to cooperation between Israeli and Palestinian business ventures. Econorm'c interdependence could help reduce many of the political and cultural strains between the two peoples, and help to ensure that a lasting peace is formed.

The focus of the last art of the stud of Israel's indust was to evaluate the otential for sending

business generated by Israeli companies to Palestine. The best way to do this was to interveiw people who are working in Israe’s industry, and find out what potential they saw in working with Palestinian companies.

Two general responses come from those who reacted positively to the idea of Palestinian and Israel companies working together. The first idea was that initially, the Palestinians should focus on obtaining a share of the work which Israel sends to the Far East. Factories in the Far East are responsible for producing and assembling millions of dollars worth of products developed by Israch companies each year. Israel also purchases miwons of dollars of hardware components from Far East manufacturing plants. Althou-h cheap labor is available in East Asia, there are high transportation costs in shipping, products back and forth from Israel. Also, barriers are placed on personal relationships between business partners due to the thousands of miles of separation.

Shifting production of computer chips, wiring harnesses, hioh quality lenses, or other hi-tech industry components to Palestine could potentially offer increased savings and profits to both Israel and Palestine. There are however, a few major concerns of Israch companies. The first and foremost concern is with quality control. Because the reputation of Palestinian producers will be unproved, it will be critical that they provide Guaranteed quality assurance. The best way to do this is to beoin manufacturing products which can be individually tested and delivered with proof that quality standards have been met.

The other concerns dealt with the professionalism and technical resources of the Palestinians. It will be critical that any Palestinian business venture in the hi-tech industry be managed and marketed by experienced and hiahly professional personnel. A study of how companies in Far East manage their businesses and deal with clients would be very helpful.

An important factor that will have to be considered if the Palestinians are to successfully enter the manufacturing side of the hi-tech business is initial capital outlay. For example, over 250 million dollars was invested into Intel's manufacturing plant in Jerusalem. Industry analysts note, however, that most major international companies would not be willing to come in and invest in manufacturing plants due to the instability of the current political situation in Palestine. This means that the high initial capital investment would have to come from the government or from development aid sources.

Critics of the idea of establishing hi-tech component manufacturing industry in Palestine agree that software is a much better option. Software, they argue, requires only a minimal initial investment, and has a much greater potential to provide jobs and produce profits. The emergence of new Arab markets all over the Middle East and North Africa are demanding that existing software applications be translated to Arabic, and that new specialized programs be developed. Palestinians have the potential to take charge and become the market leaders in Arabic software production.

The major requirement for creating a software industry in Palestine is training. While the lowest echelons of Palestinian society are in need of basic skills and literacy training, there is a significant portion of the population with the educational background to immediately start learning how to program software. Several Universities in the West Bank are well equipped to handle programming courses. People in Israel have suggested developing a training center in or near Gaza where Israel professors could come in and train Palestinians in software engineering.

Interviews

The following section provides transcripts of interviews, which were conducted with members of the Israeli computer industry.

(1) Meeting with Dr. Michael Addel; KLA Semi Conductors, Migdal HaEmek, Israel; Dr. of Physics and Mathematics from the Technion; Specialist in Computer Sciences

Q.: Mere is the best place to find quantitative information about the Israeli computer and hi-tech industry

A.:Misrad Hamishar BiTasiah (Office for the commercialization of industry) and the Machon

Hayitzoo Biyisraeli (Israeli Export Institute) both located in the Beit Hatasiah (Industry House) in Tel Aviv. They have marketing divisions which are responsible for encouraging, foreign investment into the Israeli computer and hi-tech industry and marketing the products and services which Israel offers.

Also, check the Central Bureau of Statistics in Jerusalem for more data.

Q.: What trends are currently occurring in the Israeli computer industry?

A-: The software industry is booming. Most of the work being done in Israel is source-code related. There is also a growing hardware industry. Intel is building a new chip fabrication center in Kiriat Gat (near Gaza). EBM, Digital, Motorola, and several other huge international companies have major operations within Israel.

Q.: What other areas besides computers are big within the Hi-tech arena?

A-: Telecommunications is going crazy. Two very successful companies are ECI and Tel Rod who deal with telephone exchanges and the compression of lines. Israel holds a very significant percent of the world market in telecommunications.

One good way to see which sectors of the hi-tech market are expanding is examine the employment adds in regional newspapers and publications around Israel.

Q.: What potential do you see for building some sort of computer-related industry in Gaza or the West Bank which would provide products or services to the Israeli industry?

A-: It sounds like it could be a successful idea, but it would have to be a very well thought-out plan. The Palestinians would be cutting. Into the labor-intensive assembly market held primarily by the Far East. The major obstacle that the Palestinians would have to overcome is Quality Control. The companies in the Far East have a proven reputation while the Palestinians do not.

The key to success would be to find products which could be manufactured with complete quality assurance. These products would have to be able to be practically tested and evidence provided about their quality. Because every product would have to be tested, the product would have to be somewhat valuable. Also, the method of testing must be reliable and cost effective. An example of such products would be high quality optical lenses. Lenses for expensive cameras or for applications within 's electoptics or control and measurements industries could be manufactured and polished in Gaza. Each product would be individually tested and evidence of its quality could be easily provided. If the industry in Gaza be-an with this philosophy -- to provide absolute quality assurance, then slowly the Palestinians could build a reputation that would allow them to capture more of the assemblies mark-et of Far East companies.

(2) Meeting with Yuval Sherman; Cannel Software Engineering Ltd., Haifa, Israel; Author of Turbo Anti-Virus Program (top selling anti-virus program, marketed by Central Point Software in US)

Q.: What's going on in the Israeli computer and hi-tech industry?

A-: Check Beit Hatasiah for exact statistics and listing of companies.

Several major American companies have plants in Israel There are several Hi-tech industrial parks in Israel. The largest is in Haifa. Intel has a major manufacturing plant in Jerusalem. IBM is very big in Israel

Microsoft does major R&D in Israel.

El-'Dit is an Israeli company working mostly for the military sector. They manufacture hardware and computers.

El-Sint is another Israeli company that develops imagine, for medical purposes.

Digital's office in Hertzalia deals- mostly with sales.

Motorola has a huge operation in Israel.

National Semi-conductors does R&D and manufacture in Migdal HaEmek.

Most of the labor-intensive or assembly-type work is sent to Malaysia or the Far East.

Q.: What role has the government taken in the computer and Hi-tech indust7?

A-: The government is extremely supportive. There is an office called Hamodan HaArsee (The Chief Scientist) which provides funding for start up Israeli companies. Also, the present government is making huge investments into infrastructure and economic development. Israel is putting billions of dollars into roads, industrial parks, communication systems, and utilities needed to support industries such as computer and Hi-tech.

Q.: What potential do you see for building some sort of computer-related industry in Gaza or the West Bank which would provide products or services to the Israeli industry?

A.: The Israeli industry definitely creates a demand for the assembly of electrical circuits, printed circuits, and many other electrical and computer components. This demand is currently being met predominantly by markets in the Far East and also by factories in the Galil (Northern Israel) and in the Negev (Southern Israel).

There would probably be resistance within the Israeli industry to developing "subcontractors", in Gaza because the companies in Israel would prefer to see the continued development of the manufacturing which is taking place in the Negev and Galil There would have to be tremendous cost savings to lure companies away from doing business with Israeli/Jewish subcontractors.

(3) Meeting with Amnon Leibovici; Israeli Export Institute, Marketing Division; Executive Electronics and Software

Q.: Does the Israeli computer industry produce consumer products?

A-: Outside of software, not really. There is very minimal product manufacture and a decent amount of component manufacture, but basically, Israel does not build consumer products. The focus of the work done in Israel is research and development. The main products are software and data communications technology.

Q.: Could you describe the relationship that large international computer companies such as IBM or Intel have with Israel?

A-: Israel is a major word center for research and development. There are so many highly qualified experts in the computer field in Israel that many companies have chosen to develop new technology here. The labor-intensive work is then sent to markets in the Far East and the products return to the United States where they are marketed world wide.

Q.: What potential do you see for building some sort of computer-related industry in Gaza or the West Bank which would provide products or services to the Israeli industry? What are he constraints or barriers?

A: There is definitely a potential for doing, work associated-with building, memory chips, board assembly, housing for CD-ROM, and any other assembly work.

The main problems which, would have to be overcome deal with professionalism and quality control. It would be difficult to convince the executives within the Israeli industry that the Palestinians could handle the business with the same professionalism and quality control that the Asians exhibit.

(4) Meeting with Israel Asher, Chairman of the Electronics and Software Division of the

Manufacturer's Association of Israel; President, Degem Systems Ltd.

Q.: How does the Manufacturers Association of Israel view the development of computer/hi-tech industries in Palestine?

A: We are supportive of it . In fact, I was the only Israeli presenter at the Amman Conference last November. I was there to encourage the training of Palestinians for work in software programming and other hi-tech fields.

From our perspective, there are three rationales for this kind of development:

1. There is great lack of manpower in the Israeli hi-tech industry. For example, in 1995 there was a demand for over 2000 additional professionals in the computer and electronics industries. In 1996, this demand is projected to increase by 50 to 100 percent. Newspapers are "exploding," with want ads for programmers, and other types of technicians. Two days ago in the Knesset, there was a debate about whether to import 800 software engineers from India.

The Palestinians could form small software houses which would be subcontracted by larger Israeli companies. The Palestinian professionals would never have to leave their places of business, and could profit from the growing, Israeli industry.

This type of situation is very common in the software business. For example, my company, Degem Systems Ltd., subcontracts work to a small Israeli Arab software house in Nazareth. Last year we sent work to Hunzarian programmers. There is no reason why the same type of business arrangements could not be made with Palestinians. It would be a win-win situation.

2. From Israel's perspective, the recent peace agreements have meant the opening of some potentially huge Arab markets. Egypt and Jordan are officially and functionally open, and Saudi Arabia is on the way. Many other countries such as Qatar and possibly even Syria may soon be buying, Israel products. All of this necessitates Arabic lanauace support.

With their knowledge of English, Hebrew, and Arabic, the Palestinian.,, would be perfect for the job of adapting ., US, European, and Israeli software to Arabic. This process would require considerable manpower, and could employ significant, numbers of programmers.

3. The third rationale deals with the needs of the Palestinians. Telecommunications, airports, infrastructure, government administration, etc., all need IT services. - It is likely that large muli-nationals (companies such as Siemens, etc.) will be coming in to Palestine for large development projects. These companies will also need local IT services and support. If none exist, they will have to be imported and not only will efficiency be hindered, but the Palestinians will have missed an excellent employment opportunity.

Small IT service-related companies should be set up for the sole purpose of working with the development effort in Palestine. This will provide guaranteed work for these companies during the early years of the autonomies. By providing services for the government and large developers, they will gain the experience needed to go out and compete on more of a free market basis.

Q.: What should be done about manpower training for the development computer and hi-tech industries in Palestine

A: It is likely that very large amounts of money will be, invested by donor nations to fund education and training in the Palestinian Autonomies. It is critical that the PNA addresses the huge gap that exists between the "elite" of their society and the base of more uneducated citizens.

There is a large percentage of the Palestinian population that is very uneducated and insome cases, il. Many of these people formerly earned their living as construction workers in Israel. However, with the political problems of the Intifada, Israel chose to import workers from Romania,Thailand, etc., and forced the Palestinians to become a much less significant part of the Israeli Construction Industry. This has led to increasing levels of unemployment in Gaza and the West Bank.

At the top of the educational spectrum is an elite portion of society which has completed high school and University curriculums and is ripe for training and entry into the hi-tech professions.

Israel has suggested the development of "Cities of Education' for the Palestinians. One idea is to establish a "zone" at the border of Gaza that Palestinians and Israelis could both enter. There are enough Israeli professors/teachers (Arabic speaking) to make-up for the shortage of teachers in Gaza.

There would be two focuses of the education for the Palestinian. One focus would be on the development of basic skills and trade knowledge for the uneducated. The other focus would be on the development of IE-tech/pre-professional skills for the more "elite" It is important not to focus only on the first objective and the second.

It is also important to recognize the huge difference in Education between the West Bank and Gaza. The West Bank has several, fully equipped Universities and a relatively good infrastructure. Gaza's educational infrastructure, on the other hand, is in much worse condition. Therefore, if a technical training school for the development of hi-tech skills was Lyoina to be built, it should definitely done in Gaza. This not only because conditions are worse in Gaza, but also because it is difficult for citizens of Gaza to commute to the education centers in the West Bank.

Q.: What about the production or manufacturing aspects of the hi-tech industry, with respect to development in Palestine?

A.: It's sort of like the old question of the chicken or the egg. Which comes first, training or productions? In more conventional industries, such as textiles, the first step would be to build a factory, fill it with unskilled workers, then hire a few skilled technicians.

The opposite is true in hi-tech. It is an industry where training is what creates jobs. Because the level of innovation is so high, and initial capital investment depends on the size of the venture, people can easily create their own businesses. Witness the many hundreds of start-up companies each year in Israel.

So, to answer your question, the initial focus should be on trainee as opposed to developing manufacturing plants. Unless of course, a huge company such as Intel or IBM or Motorola wanted to invest in a plant in Palestine. But that seems unlikely at this time. The production process will have to grow out of the entrepreneurial initiative of trained technicians.

(5) Meeting with Ud Gandar, President, Kunda Desi(,n, former head of the News Dept. at HaAretz (major Israeli newspaper) and current head of I-Ii-tech Dept. of Globes (Israeli Business Publication)

Q.: What strategy would you recommend for the Palestinians to develop some sort of computer or hi-tech industries?

A.: First of all. I would not, recommend entry into the labor intensive production markets. The reason is because although labor is cheaper in Palestine than Israel, the cost of Evinc, is very similar. There is no way the Palestine could compete with Singapore, Korea, Malaysia, and other Far East Markets. If they did, they wouldn't be able to feed themselves.

Manufacturing in the hi-tech industry is also very capital intensive. It is doubtful that large international companies would be willing to come in and invest a billion dollars in such an unstable environment.

Q.: So what do you think about the idea of focusing on software development, and particularly, subcontracting with Israeli software houses?

A.: Software development may be a very viable alternative for the Palestinians. Particularly, the West Bank and Gaza could serve as "Arabization Laborites" for software from the US, Israel, Europe, etc. Also, since so many Palestinians are spread out around the Arab world, an excellent network of connection could be set up to introduce Palestinian-produced software to other Arab markets.

On the other hand, 1 would not encourage the use of Palestinian labor by Israeli software houses. I do not believe in importing programmers, because programming is "culture oriented". Software often reflects the culture of its programmers, and this require consistency. The success of the US and Israeli software markets is based largely on the fact that the programmers speak the same languages (figuratively speaking: spoken, written, cultural, etc.). Also, I do not think it would be in Israel's best interests to build up the competition.

Q.: What contacts would you recommend that UF make in its investigation?

A.:

1. Professor Danny Dolev, Hebrew U.; Head of the National Committee for Comptuing and Communications. Try to get a hold of some of the papers they have recently published (you will have to translate to English)

2. General Shahaf, Military Governing. of West Bank (Civilian Management)

3. The Chief Scientist of Israel (located in the Industry House, Tel Aviv)

4. Ed Malovski, former managing director of the Bird Foundation (promotes cooperation between US and Israeli firms in hi-tech), currently CEO of venture capital fund called Gemini (Hertziba)

(6) Meeting with Dr. David BenNahum, The Hebrew University of Jerusalem, Director of Language Laboratories, and specialist in computer and education systems.

Q.: How should the Palestinians plan to develop high-technology computer industries?

A.: The Palestinian's approach to entering the computer and high technology market should focus on the development of small businesses or projects which require small capital investments and produce products which would be used internally. In other words, technology products and services that the government would use to operate and connect its various branches. Once the Palestinians are able to successfully develop technology products for themselves, they can begin to look at external markets.

Q.: What do you think of the idea of setting up labor-intensive assemblies factories or

Manufacturing plants in Gaza or the West Bank?

A.: Turning the Palestinian population into the Israeli hi-tech industry's "cheap labor pool" would not be a positive-action for relations between the two peoples. The current situation in the Construction industry is an example of why this is not a good idea.

Q.: What would you suggest as an alternative?

A.: The best thing that could happen for the Palestinians is if they could develop a skilled technology-profession-oriented workforce capable of innovating, and designing new technology products and software. The only way to do this is through Education.

Q.: Where should the PNA be focusing its efforts with respect to technology development?

A-: The focus for the Palestinians right now should be on helping their educated professionals begin small business ventures, and on training other segments of their population in various computer skills.

Q.: What are the pros and cons of Palestine Is proximity to Israel?

A-: Having Israel so close to them has a major advantage and disadvantage for the Palestinians.

ADVANTAGE: Israel can serve as a excellent example for how to create a successful educational system and hi-tech industry. Israeli Universities have already expressed an interest in sharing information with the Palestinians (if the Palestinians are willing, to work with them). Israeli companies may also be willing to offer some sort of assistance to Palestinian start up companies in the hi-tech sector.

DISADVANTAGE: The Palestinians will have to compete with Israel in the hi-tech market. This will be very tough for the Palestinians.

CHAPTER FOUR

Building a Software Engineering Industry in Palestine

INTRODUCTION

This chapter will discuss the options and resources that the University of Florida has identified as critical for developing, an SE indusin the West Banand the Gaza Strip. This chapter will also look at the ways other countries in the area have approached the development of their technology industries. Furthermore, this chapter will identify the resources available in West Bank and Gaza and w these resources can be best utilized to further the coal of technology development in Palestine.

RATIONAL FOR THE DEVELOPMENT OF A SOFTWARE ENGINEERING INDUSTRY IN PALESTINE

The development of a software engineering (SE) industry will provide the Palestinian economy with productive sector that not only produces revenue, but also aids in the national development effort By choosing to embrace the information technology (IT) revolution and the age of computers, the Palestinian government can facilitate the development of a domestic software engineering industry. This industry will work to solve the unique IT problems of the emerging Palestinian government and society, create databases and business applications to assist established and start-up local companies, contract services to international software houses, and produce finished products to be marketed in the national, regional, and international domain.

It is important to understand why SE should be the first hi-tech industry developed in Palestine, as opposed to something like computer component manufacturing. There are several disadvantages to of a hardware manufacturing, industry in Gaza or the West Bank. First of all, setting up manufacturing plant requires a heavy capital investment which, can easily reach into the hundreds of millions of dollars. For example, the initial investment into Intel's chip manufacturing plant in Jerusalem was over $250 million. It seems highly unlikely that any major multi-national firm would be willing to invest that kind of money into an unstable political environment and fledgling economy. it is also unlikely that Palestinians would be able to compete with labor rates in traditional manufacturing areas such as the far East or Indonesia, where the cost of living, is significantly lower. Palestinians would not be able to survive on the same wages that manufacturing giants in the Far East pay their semi-skilled workers.

Other disadvantages of hardware manufacturing include the influence of industrial automation, and the effect of perpetuating the “cheap labor pool”' character of Palestinian society. As robotics and artificial intelligence assume increasingly large roles in the manufacturing process, the need for assembly line workers is decreasing. This trend could seriously damage any economy that relies on manual labor to provide its citizens with jobs.

Furthermore, the social Vacations of relegating Palestinian workers to simple, repetitive manufacturing tasks could be harmful. The Palestinians who live in the West Bank and Gaza Strip have been utilized as a cheap source of manual labor for far too long. Workers depend largely on employment from Israeli construction companies or other companies which require low-skill level workers. When borders are closed for security reasons, a large percent of the Palestinian population is out of work; and because they are relatively unskilled, they can not create work opportunities within their own borders.

While creating factories and manufacturing plants inside Gaza and the West Bank would provide a more reliable source of employment, it would not accomplish the task of helping to empower the population with knowledge.

Software Engineering, on the other hand, is a distance and border independent profession which, focuses on human resource development, rather than physical capital input. Funds that would otherwise have to be put into building physical plants could be put into educating and training Palestinians in information technology. Empowered through education, the Palestinians will have the ability to innovate and direct their own economy, and to keep pace with the rapid changes in the technological world. Figure 4.1 summarizes the advantages of developing a software engineering industry.

1. Software engineering requires only a minimal capital investment in terms of plant and equipment.

2. Excellent potential exists for the Palestinians in other Arab markets. Palestinian programmers could focus on the " Arabic-ation " or translation of existing applications, so that Arabic-speaking users could interface them. Many other opportunities exist in emerging Arab markets.

3. Software engineering, is a human resource-intensive profession, which could be accessed by the highly educated segment of Palestinian society. Training resources are available in the region, and programmers could theoretically be taken from the classroom to the job in a matter of 6 to 12 months.

4. Software engineering is a "distance-less" profession, which means that issues of border control or political instability will not hurt business.

5. Software engineering could become a vehicle for Palestinians to interact on an economic and intellectual level with people all over the world.

AS with any development effort, the establishment of a software industry in Palestine will require the combined efforts of several specialist organizations with expertise in the training of software engineers and the incubation of start-up businesses in this field. First, the most capable IT professionals from within the West Bank and Gaza should be tasked with overseeing the industry's development, and working, with foreign sources who are rich in previous experience. For example, Egypt has recently set up a very successful Information Decision Support Center (IDSC) as part of its Cabinet. The IDSC has created one of the Middle East's foremost training centers for software engineers in Cairo (Information Technology Institute, ITI), and has created several technology development programs and an organization called the Regional Information Technology and Software Engineering, Center (RITSEC). Israel also has many organizations, which are capable of training software engineers and establishing industry. These and other organizations have agreed to provide services and support to the Palestinian development effort, and need only to be mobilized before they can becin to produce a resource bank of Palestinian software engineers.

The Palestinian Authority will have to set the tone for such development by implementing policy, which promotes an information technology-based society. This means paying for infrastructure and education. The PA must help its citizens access the Internet and other information databases, and make opportunities to work with regional computer experts available to its potential technology business leaders. Government policy towards technology development in India, Singapore, and Egypt Gust to name a few countries) should be studied and emulated by Palestinian lawmakers.

MARKET NICHES

Richard Heeks, in his report on software production in developing countries (from the IFIP W09.4 Cuba conference, Havana, Feb 1994), writes that, "software industries need some 'spice' to succeed a specialist application area, a particular competitive advantage through skills development or state action, or a novel idea... " Mr. Heeks, who is one of the world's leading, experts on software industries in developing countries, stresses the need for identifying, specific market niches. As part of its pilot study, the University of Florida has identified several market niches that are unique to the Arab world, and could be taken advantage of by the Palestinians. In addition, there are some mark-et niches (such as domestic public administration and cooperative work with Israeh software houses) that Palestinian programmers could effectively monopolize.

The Arabic Language Niche

Computer markets in Arabic speaking countries have experienced radical growth during this decade (see marketing reports on the Egyptian, Turkish, and Saudi Arabian computer markets in chapter 2). Regional leaders such as the IDSC and RITSEC, with support from the United Nations and Arab governments have introduced the Internet and IT industry to several Arab nations which previously had no ac. The Arab world hrecognized the value and importance of IT, and its businesses and governments are becoming increasingly willing to spend money on hardware and software for the purposes of process improvement.

All of this translates into a large demand for Arabic language-supported software. The largest producer of software in the Middle East is Israel, but the Israelis have little or no edge in the Arabic market. The Palestinian SE industry could potentially become the leader in Arabic language interface applications. With an understanding of both the cultural and linguistic character of the Arab world, Palestinians companies could, take existing applications and modify them to be used by the millions of Arabic speakers who will eventually be working on computers. This is in addition to new applications which, can be written by Palestinian programmers.

Palestinian software engineers will be able to access the "Arabic Language Niche" in several ways. One option is to enter into contracts with foreign software houses who, are interested in having their programs translated to Arabic, and then marketed to the Arab world. This would either be handled on a fee-for-services basis (if the foreign firm wanted to take the marketing risk) or on a percent of sales basis (if the translating firm wanted to accept more of the risk).

The Israeli Market Niche

in a recent meeting with a University of Florida researcher, the head of the Computer and Software Division of the Israeli Manufacturer's Association, Israel Asher, expressed a great interest in the training of Palestinian software engineers. Mr. Asher first shared his ideas with the international development community at the Middle East /North Africa Economic Summit in Amman, Jordan, October 29-31, 1995. The Israeli software industry is currently facing a huge manpower shortage with respect to software engineers. There have been proposals from within the Israeli Knesset to import as many as 1000 Indian programmers to help the Israeli industry out of the bind it is in. Mr. Asher, and many other influential Israeli leaders, would prefer that this surplus work be given to Palestinians.

It is difficult to quantify exactly how much work could, be shared by Israeli and Palestinian firms, but the current size and growth statistics of the Israeli software industry are very encouraging. With annual sales increasing at a rate of around twenty percent (see figures in chapter three on the Israeli hi-tech industry), Israel is not producing enough software programmers to feed its growing industry. Israeli-Arab software houses in Afula, Nablus, and other Arab cities are already profiting from the business they get from Israeli companies. Current figures show that the Israeli software industry could employ anywhere from 500 to 1000 Palestinian programmers this year alone.

Not only would cooperation between Israeli and Palestinian software houses have mutually beneficial financial results, but there would be social benefits as well. Building. professional relationships might help ease some of the political and cultural tensions between the two peoples, and promote peaceful coexistence, which is an important goal of both the Israeli and Palestinian governments. Israelis and Palestinian., could interact not only in the business phase, but also in the earlier training phase. Israel has a well developed infrastructure of public and private training institutions, which could be used to instruct Palestinian students in software engineering. This will be discussed later in the section on available resources.

The Regional Information Database and Consulting Niche

One of the new businesses that the IT industry has created in the Middle East is information consulting (Agamawi, 1996). IT companies and software engineers are able to market their services directly to Arab governments and private companies. The Egyptians are the current leaders in this segment of the Middle Eastern market. Members of the IDSC and RITSEC have designed IT management systems and database programs for the government of Kuwait, for Saudi Arabian oil conglomerates, and huge Egyptian corporations, just to name a few examples. These types of clients are willing to spend large amounts of money to have capable Arabic speaking programmers design business and administrative systems to meet their specific needs. Because awareness of IT is so new, but increasing quickly, the Palestinians could break in and establish themselves in this kind of market if they act soon.

The old Middle Eastern attitude that information, market trends, and "tips" should be shared casually between business men is quickly waning (Agamawi, 1996). The corporate world has accepted the value of well-organized and meaningful data. Middle Eastern companies understand that business decisions must be based on information, and are willing, to pay for IT services. These new attitudes have opened up a whole economic market in information and decision support. Palestinian software companies could specialize in the compilation, organization, and presentation of data which, their clients need to analyze options and make critical business decisions.

The Internal Public Administration Niche

The Palestinian Authority and the international organizations that will be working, on the internal development of Palestine will require substantial IT service. Every bureaucratic office, and every arm of every Ministry of the government, will require specialized software to meet its computing, needs. Large companies who are brought in to build ports, airports, roads, power generating stations, and communication infrastructure will all require local information management systems. Palestinian software engineers could focus their professional work on designing, programs and systems for the development of their own country.

If enough local IT companies are available to service the needs of the government and international developers, then a larger percentage of the aid money given to the PA will stay within the Palestinian economy. Also, the expense and cultural problems of bringing in foreign specialists will be avoided. This will have the combined effect of boosting the Palestinian economy, maximizing, the efficiency of development projects, and allowing the Palestinian people take an active role in shaping, their country.

The IT projects necessitated by the development of a new nation in Palestine will produce enough work to employ hundreds of software engineers. Some of the jobs created by these projects will be permanent, while others will provide new programmers with the opportunity to put their skills to practical use and prepare for careers in the private sector. Providing IT services to the public sector could be handled as an extension of government sponsored training programs. These jobs would allow programmers to develop their innovative skills, and sustain the young SE industry until can support itself in the private market.

The International Software Market Niche

Software industries from developing countries have made a strong impact on the global software industry, previously dominated by North America and Europe. The following article by Edward Yourdon, describes the path most developing countries are taking to get a share of the multi-billion dollar global software industry.

Offshore software producers are grabbing a noticeable chunk of the global software pie. While the US still dominates the industry, over the next few Years, You can expect an increased presence of non-US-made software in both domestic and international markets. And a number of these products will come not from the industrialized nations of Western Europe but from third-world developing countries. The leaders in this movement will be countries such as India, Singapore, the Philippines, and Russia, where labor costs are low, and skilled programmers are abundant.

We can expect the world's developing countries in particular to take a clear path with regard to software development. This path has four distinct stages, and each stage offers some interesting opportunities.

Stage 1: Live-in ContrProgrammers. At first, teams of third-world programmers will be knocking on doors, offering to develop software with teams located at the customer's local site. The Primary advantage to this approach is low price. Even with the overhead of travel, lodging, and administrative expenses, the client often finds that he or she is paying only half the cost of a comparable American work force. In some cases, cost is not as important as availability. If the project involves a "hot" technology (e.g., using Visual Basic for a client/server application), it may be difficult for the client to find available talent in the normal labor pool. There is also the issue Of Stability: The "body shops" that provide offshore programmers often argue that their people are less likely to quit and take another job in the middle of a critical project.

MOST of the problems associated with the first stage of development within the software industry are obvious: The overhead expenses reduce the competitive advantage of lower salaries, without providing any benefit to the client or the software vendor. Visas and work permits can involve enormous red tape, and the delays may be unacceptable to a client with a tight deadline. Language problems, cultural differences, and the difficulty Of trying to maintain a life-style comparable -to the higher-paid US colleagues with whom the foreign programmer is working -- all these are obvious but predictable problems. Similarly, the client will often express strong hesitation about hiring a foreign Programmer without an on-site interview; this poses a financial risk for either the overseas vendor or the client, depending on who pays the travel costs.

A subtler problem involves the "brain drain" from the foreign country. In the long run, perhaps the US should rejoice in the fact that its software industry is becoming a "melting pot," just as its manufacturing industries did throughout the nineteenth century. But national planners in the developing countries are very concerned: They are losing their best and brightest minds, because many of the programmers who go to the US for a software project never come home. (Ironically, one government study in the Philippines actually encouraged this practice, because expatriate workers typically send home a steady stream of cash to their relatives. This was judged to be a more effective way of bringing hard currency into the country than such traditional mechanisms as building, a factory.)

Stage 2: On-site Analysis, Offshore Code. The second stage involves having a small group of systems analysts who, will work with the customer, on-site, to define the system requirements, which they then transmit back to programmers in the home country. Most of the first-stage offshore players are planning to move in this direction. Using, a small number of on-site analysts saves considerable transportation and overhead costs. Having home-country software engineers implement the design also minimizes the brain-drain problem and allows the offshore software firm to beam budding its own infrastructure and long-term expertise in software technologies.

The problems and disadvantages of the second developmental stage are obvious: End users are reluctant to trust an offshore firm several thousand miles away with the development of a mission-critical system. It's often not clear to the customer whether the software developers will understand the nuances of his or her requirements, nor is it clear how well the developers can respond to ongoing, chances in those requirements.

Most developing countries have a mediocre telecommunications infrastructure, compounded by bureaucracies that Americans would find mind-bo c, cling. For example, when I recently tried to establish E-mail communication with a colleague in India, my colleague apologized for the delay caused by the need to file government applications and obtain permits -- just to get an E-mail address on someone else's Internet node. In theory, modem technology allows easy fax and E-mail communication from New York to Bangalore just as it does from Bangalore to New York; however, in practice, it doesn't always turn out that way.

The second stage, however, isn't an all-or-nothing, proposition: It works in song instances, not in others. It's particularly mood for certain kinds of systems programming projects, where the interface and the end results are well understood and clearly defined. For example, a software engineer who's building a C++ compiler for yet another Unix hardware box doesn't need much communication with the programmers whom will be the product's end users. This explains why many US hardware and software companies a-re heavy users of second-stage software organizations. Also, if you're part of a multinational company that has already dealt with the telecommunications issues for its overseas operations (e.g., Andersen Consulting, which recently established an office in Manila), you probably won't encounter many new problems when you farm out some of your software projects.

And if your users and developers are accustomed to working with rigorous software to Methodology that CASE tools support, you can reduce the communications problems substantially. The Pact Group, a company based in Lyons, France, has taken this approach. It works with European clients and documents user requirements in a Knowledge Ware ADW CASE tool. The ADW repository is then shipped to Manila, where a "software factory" of Filipino programmers, each equipped with a personal Knowledge Ware CASE tool, carries out the design, implementation, and testing.

Stage 3: offshore Generic Software. The third stage in the growth of the offshore software industry is the development of generic software products -- such as word processing packages, and database programs - that. can be marketed both in the home country and in the world This stage often begins with the offshore software developers producing for their local markets. This is possible because off-the-shelf American software may be unsuitable for a variety of reasons. The American software giants might consider the software Uruguay, for example, too small to bother with. Also, senior managers at Microsoft have told me that a new product doesn't even show up as a "blip" in the accounting system until it generates $ 50 million in annual revenues; but this would represent a phenomenal success for a software producer in many developing countries, who, would be happy with even a small fraction of that amount. Similarly, American software producers might ignore Brazil because of problems with government bureaucracy or concerns about rampant piracy. They may have ignored North African and Middle Eastern countries for political reasons or because they couldn't or wouldn't cope with the difficulties of Arabic script.

American-made software can pose other, more subtle problems once it crosses the border. Standard, shrink-wrapped PC software packages from software giants like Lotus and microsoft are intended primarily for operation on American-built hardware boxes by English-speaking, programmers. No matter what vendors tell you about their support for non-English languages and less-common PC clones, programmers in developing countries such as Mexico, Brazil, and Chile find the reality quite different; they talked to me at length about their problems getting "standard" software (e.g. , word processors or spreadsheets) working on their machines. Sometimes the problem was with the hardware or the operating system, and sometimes it was with the foreign language dictionary or thesaurus.

Stage3 becomes more interesting when the offshore developer decides to bring its software to the North American marketplace. Obviously, the same kind of problem can exist when dealing, with the European or Japanese marketplace or any other market that already has an advanced, 4' computer-literate user population. Even if the new software is bug-free, the developer's cultural assumptions and trappings may cause problems (e.g., with user manuals and GUI interfaces that the American user finds subunacceptable). (For anoperspective 011 -Cultural differences. see "Crossing the Cultural Boundary", page 107).

But the real problem involves marketing. Ale cost to bring even the smallest PC application into the American marketplace can be daunting enough for the American start-up software company, let alone its third-world counterpart in Montevideo or Sao Paulo. Moreover, access to a million dollars providers no guarantee of success. You can argue that Microsoft and Lotus are juggernauts, not because of their software technology but because of their marketing muscle. Suppose a software organization in India developed a look-alike version of Windows NT that was functionary equivalent but half the price, twice as fast, and only half as big. Even aside from the issue of copyright-infringement lawsuits (which is also an extremely potent marketing weapon), what chance would the Indian Company have to market the product successfully

Perhaps NT is too ambitious. What about a word processor? Many articles in the trade press complained about rampant bugs and bloated "fatware" characteristics of the latest releases of Microsoft Word and WordPerfect 6.0 (see "Fighting Fatware," April 1993 BYTE). It's easier to imagine an offshore software producer successfully marketing a $ 100 word processor provides 80 percent of the functionality of the big-name brands but manages to fit in 256 KB. Even if you were to give it a full megabyte, you'd still be far ahead of the fatware products that require 8 to 10 MB of disk space -- and that's just for the DOS versions; Windows software can take 15 to 30 MB or more per package.

The natural reaction is to dismiss such a scenario as unrealistic, if not downright impossible -but is it any less plausible than Japan's marketing the Honda Civic and Toyota Corolla against Detroit's 1970s-era gas-guzzlers? In fairness, I should point out that the Japanese had been producing automobiles for their own marketplace for 20 years before they decided to enter the US, and they also had a great deal more capital than the typical two-guys-in-a-garage software organizations that are popping up in third-world countries. On the other hand, it was barely over a decade ago that Microsoft and Lotus were, for all practical purposes, two guys in a garage; things chance quickly in the software field. In the meantime, you should expect to see foreign-developed software that is shrink-wrapped inside an American software box; the consumer won't know that Russian programmers have developed the software (see the text box "Software in Russia").

Stage 4: Exploiting HomeGrown Expertise. The fourth and final stacre in the development of a software industry involves the development of products that take full advantage of the native country's unique areas of applications expertise. I have seen unique applications that originated in Egypt, Brazil, Chile, India, Singapore, and the Philippines. All of them involve indigenous applications expertise that is completely independent of the software technology per se, and all are being, packaged as commercially salable products.

The article by Yourdon does an excellent job of explaining the strategies currently being used by developing countries to enter the international software industry. First the Palestinians must train a sufficient amount of programmers to set up several start-up companies. Then they too can begin to play a role in the lucrative international software business.

RESOURCE GROUPS FOR INDUSTRY DEVELOPMENT

Once the research team at the University of Florida decided that SE was the most viable option for hi-tech development, the process of identifying critical resources began. The Committee will be responsible for overseeing consultants and outside sources that can design and implement training for Palestinians, and facilitate industry development. The task of locating the most qualified and practical resources is critical to the Committee's potential success. To accomplish this task, the University of Florida research team consulted various experts and organizations in the region who have been responsible for creating software industries. The logical point of departure for this research was to begin locating Palestinian resources. Unfortunately, data on hi-tech companies in the West Bank and Gaza is limited, and access to these areas is somewhat restricted due to closures by the Israeli government. However, several important Palestinian organizations and contacts were located, and they are presented in the following section. The research of Israeli and Egyptian resources was more thorough than those of the Palestinians, since these industries were better developed, and much more accessible.

Palestinian Resources

There is a small presence of hi-tech firms and software houses in Gaza and the West Bank. The final results of the 1994 Establishments Census, conducted by the Palestinian Central Bureau of Statistics, showed that there were 29 Palestinian businesses in the hi-tech sector. Seventeen of these establishments were in the software business. Maha Najjab of the Delegate of German Industry and Trade reports that the number of hi-tech companies in Gaza and the West Bank has more than doubled since the 1994 Census. Maha Najjab also stated in a recent interview that there has been serious talk in the Palestinian business community about forming a union or association of software and hi-tech companies.

Chambers of Commerce

Some of the best sources of information about hi-tech and software firms in the West Bank and Gaza are European trade organizations. For example, the Delegate of German Industry and Trade (DGIT) in Ramallah functions as the chamber of commerce between Palestine and Germany. Ale DGIT conducts economic studies of Palestinian businesses and promotes trade and investment. The DGIT is currently involved in identifying the hi-tech market in Palestine and working to network with German companies for economic growth. They have excellent contacts in the Palestinian business community, and would be helpful in mobilizing the existing hi-tech community to work on the issue of software industry development in Palestine. Another valuable resource, similar to the DGIT, is the European Palestinian Chamber of Commerce, located in East Jerusalem.

DATA Studies and Consultation

In Bethlehem there is a research group known as DATA Studies and Consultation, headed by Dr. Samir Hazboun. Dr. Hazboun is the former Dean of the Faculty of Commerce and Economics at Birzeit, University. He has recently published a book entitled, "Possibilities for Industrial and Entrepreneurial Development in the West Bank and Gaza Strip." This book presents the results of years of studies on the industrial and economic infrastructure of the West Bank and Gaza. Dr. Hazboun, through DATA, has also co-authored, "Sustaining Middle East Peace Through Regional Cooperation," which gives a descriptive analysis of the main economic sectors in the Palestinian Territories from 1967 to present, and explores the reviving of the Palestinian economy.

In a meeting in April with Dr. Hazboun and his research assistant, Riyad Ideis, it was explained that DATA's current objectives include facilitating technology transfer to Palestinians, and working towards regional economic C0OperatiOrL DATA has identified technology transfer as one of the most important issues for economic development in Palestine. Dr. Hazboun is currently researching ways to facilitate the transfer of information technologies from world leaders such as the US and

Japan to Palestine. He is in contact with the engineering and IT a leader of Palestinian

Universities businesses, and has a very capable staff of market researchers. The staffs at DATA are willing to participate in a project to develop SE industries in Palestine, and would provide excellent resources.

Development Resource Center (DRC)

Another excellent resource from within the Palestinian community is the Development Resource Center (DRC) in Gaza. This non-governmental organization (NGO), directed by Ala'edeen Shawah, focuses on industrial develand technology transfer. TDRC performs market research, conducts feasibility studies, and develops databases on companies in the West Bank and Gaza. They also organize various training programs for Palestinian businesses. The staff at the DRC has many important connections and much valuable experience working in the Palestinian business community. They would be able to help coordinate activities between Palestinian software and computer companies, and aid in setting up training programs.

Other Business Development Groups

There are other organizations in the West Bank and Gaza whose functioning, parallels or

overlaps with groups such as the DGIT, DRC,DATA. The Bisan Center for Research and Development and the Econon-iic Development Group (EDG) are two examples. The Bisan Center is located in Ramallah and headed by lzzat Abdul-hadL Samir Huleileh is the director of the Jerusalem Office of the EDO. Hind Sanun directs EDG's Gaza Office.

Academic Resources

There are several Palestinian Universities which could prove to be valuable resources in training software engineers. These universities are capable of providing both facilities and personnel. Four institutions with engineering programs were recommended by Riyad Ideis of DATA Studies and Consultation.

1. Hebron College of Engineering, tel: 02-928912

2. Islamic Science College, Gaza, tel: 02-284532

3. Science of Technology College, Jerusalem, tel: 07-851023

4. Jerusalem University, Jerusalem, 02-274974

in addition, there, are, several other universities including: The Islamic University of Gaza, Bethlehem University, Birzeit University, and Al-Najah National University.

Palestinian and Israeli, Arab Hi-tech Firms

Some of the most valuable resources t at will be available to the Committee are existing businesses and software engineers from within the Israeli Arab and Palestinian communities. Many of these professionals are committed to strengthening the Palestinian economy through growth in the, hi-tech sector. These companies can be seen as "Pioneers" for the development of computer and software industries in Palestine, and their experiences will be invaluable to the Committee as it attempts to expand on their efforts.

An example of an Israeli Arab company working in the software industry is Informative of Nazareth. Information supplies the Israeli Ministry of Education with school administration software which has been translated into Arabic. Their experience in this type of working makes them a valuable resource to Palestinian programmers wishing to take advantage of the “the Arabic Language Niche,” discussed earlier in the chapter. The manager of Informative is Rami Shaheen who received his bachelor’s degree in computer sciences from the Technion in Haifa. Mr. Shaheen strongly supports the development of an SE industry in Palestine, and would be happy to provide consulting services or cooperate with committee in other ways.

The following Israeli-Arab companies from Nazareth work in the computer field. They all do some work in Arabic translation of software, and have several other specialties related to IT and hardware:

1. Missan Computer, tel: 06-4+64-321; Contact Bassam

2. Ramzi Abu Nofal, tel: 06-563-110

3. Informative, tel: 06-565-148; Contact:Rami Shaheen

4. Siniar Co.

SAMCO Telecom and Computers in one of the leading Palestinian hi-tech companies. With locations in Nablus and Jerusalem, SAMCO produces both computer hardware and software, as well providing a variety of telecom, maintenance, and accessory services. Founded in 1982, SAMCO is one of the most well established computer companies in the Palestinian community, and has developed a reputation for having a well-trained work force and providing high auality products and services. SAMCO is an excellent potential resource for organizing SE development in the West Bank and Gaza. Contact manager Samir Abdel Hadi at 09-380-380.

Israeli Resources

The 6.2 billion-dollar Israel hi-tech industry is one of the greatest success stories in the global hi-tech market. With growth in annual exports increasing by nearly 20 percent annually, and world class research and development centers owned by Intel, IBM, Digital, Motorola, Microsoft, and others, Israel has proven its excellence in the world IT market. As far as finished products are concerned, Israel’s specially is computer software, The software industry in Israel is booming 1) billion dollars sales, with 300 million dollars in exports) and all indications are that this trend will continue for many years. For a more detailed description of the characteristics of the Israeli hi-tech market, see chapter 3.

There are two main categories of Israeli resources potentially available to the Committee for developing SE industries in Palestine, These are in training and in job creation. Israel has numerous public and private institutions which train software engineers. Courses range from basic programming skills development for high school graduates to full four year bachelors programs in computer science, to the retraining of engineers from other fields. There are also many Israeli companies who are suffering from a lack of manpower and would be willing to subcontract work out of Palestinian programmers if they are properly trained.

Training Resources

There is a well developed proposal to create a “Peace College” for Information Technology at the Border of Gaza and Israel. This proposal was developed by Amiram Shore, the President of the Israeli Association of Software Houses. According to Danny Dolev, Chairman of Israel’s National Committee for IT and Infrastructure, the Peace College idea has been “blessed” by many members of the European Community and by the Palestinian leadership. Given proper funding, a facility would be set up where trainers from Mediterranean countries, Western Europe, and the Middle East would teach students from the region. Special computer labs and software incubator facilities will spawn start-up software houses from within the Palestinian Community. Details about this project and its critical resources can be obtained from Amiram Shore in Tel Aviv at 03-565-6748.

Israeli Universities have some of the finest computer science programs in the world. The Technion, Israel’s renowned engineering university, has produced thousands of software engineers, along with Israel’s other major universities, Danny Dolev is the key contact for computer science resources in the Israeli academic community. He heads the Institute of Computer Science at Hebrew University in Jerusalem, as well as other national committees on computers in education, and IT. His phone number at Hebrew University is 02-6584116, and his Email address is dolev@cs.huji,ac.il.

Outside of the public education system, there are several specialized software engineering schools in Israel. Sivan, Dedem, Atid, and the SELA Group are just a few examples. Caro Segal, Senior Analyst and R&D Manager for the SELA Group, reports that his company has trained may Israeli-Arab software engineers, and would be willing to set up special programs to train Palestinians. Mr. Segal can be reached for further details at 03-619-0999 (tel), 03-619-0992 (fax), or by Email at caro@sela.co.il. A full description of course offerings and sevices for the SELA Group is available on the internet at Web:http://www.sela.co.il.8080/.

A final group of Israeli training resources comes from the government. The Chief Inspector on Computers in Education of the Israeli Ministry of Education, Ben Zion Barta, was interviewed to get the Israeli governments position on training Palestinian software engineers. The detailed account of this interview is found in Appendix A. The Israeli Ministry of Education would support the training of Palestinian software engineers. Mr. Barta suggests that courses provided by the Center of Productivity of the Ministry of Labor in Tel Aviv be checked out. These courses are aimed at retraining Russian engineers who have immigrated to Israel to work in the software industry. Resources used by the of Labor could be shared with Paletraining programs.

Job Development Resources

In an interview found in Appendix A, Israel Asher of the Israeli Manufacturer’s Association proposes sending surplus work generated by Israeli software houses of Palestinian programmers. Mr. Asher sites several reasons why software training programs should be set up for Palestinians. Among these reasons is the fact that Israel is heavily under-supplied with software engineers, and could potentially create jobs for hundreds of Palestinian companies, as opposed to sending the work to Indian or Eastern European programmers.

As the Chairman of the Electronics and Software Division of the Israeli Manufactures Association, Mr. Asher has the industry connections to put together work packages for Palestinian software houses. He has presented his ideas to both the Israeli government and the global community concerned with economic development in Palestine, He can be reached for further details at 03-647-9898 (tel), or at 03-649-4973 (fax).

Egyptian Resources

The third major resource bank, which was investigated, was the hi-tech community in Egypt. Under the guidance of the Egyptian Cabinet’s IDSC, several organizations have been developing a software industry in Egypt. As a government establishment, the IDSC has become one of the top 100 IT service providers in the world. RISEC and ITI are the two subsidiary orgainzations of the IDSC which focus most directly on software engineering. Representative of the IDSC, RITSEC, and the ITI were all interviewed in April, 1969. Each representative explained the expertise and current activities of his or her organization, and offered to participate in any potential Palestinian software industry development projects.

Information and Decision Support Center (IDSC)

In the mid 1980s the Government of Egypt adopted a far reaching strategy to improve Egypt’s managerial and technological infrastructure by:

•  
• developing an infrastructure for informatics and decision support systems;
•  
• developing a software service industry; and
•  
• developing a high-tech industrial base (i.e., electronics, computers, and communications).

The IDSC was an outgrowth of this plan. Established in 1985, the IDSC has sought to efficiently and effectively mobilize Egypt’s valuable human resources by implementing successful management decision-making and formation systems supported by advanced computer technologies. The IDSC provides a range of local, national, and international services, and currently has developed 48 independent projects. Description of these services and projects, as well as explanation of the objectives and framework of the IDSC are provided in the IDSC Overview in Appendix B.

The IDSC has been described as “a notable example of new management techniques, decision support system, and information technologies can be implemented to accelerate the pace of socioeconomic reform in developing countries”. Since the objectives of the IDSC are in line with the Palestinian Authority’s goals of improving its economy through the development of hi-tech industries, and since both Egypt and Palestine share similarities in Arab culture and language, tremendous potential exists for cooperation between IDSC and the PA. Members of the IDSC who were presented with the PA’s potential plan for developing software industries were extremely supportive, and offered to help with this development effort.

Amr El Agamawi, System Engineer for IDSC, discussed the differences between the western world’s concepts of decision-making and information databases and those of the Arab world. Due to differences in values, styles, and linguistic characteristics, technology industries in the Arab world must be altered from those of the United States and Europe. IDSC has more experience than anayone else in the Arab world at working out conflicts between hardware and software, and designing special IT system for companies in the region. They have even set up organizations similar to the IDSC for other Arab governments, including Kuwait. They would be willing to do the same for the government of Palestine.

Regional Information Technology and Software Engineering Center (RITSEC)

The Regional Information Technology and Software Engineering Center is a joint project between the United Nations Development Program (UNDP) and the Arab Fund for Economic and Social Development (AFESD), and is hosted in Egypt by the IDSC. RITSEC’s mission statements is, “To support and help develop the information technology and software industry in the Arab region in order to become a world-class industry able to compete at international levels and serve as a catalyst for accelerating socio-economic development”. RITSEC, from its Cairo headquarters, runs programs aimed at human resource development, software industry support, regional networks, product development, and business development.

UF contacted Heba Ramzy of RITSEC to discuss combining efforts on the Palestinian software development project. Ms. Ramzy explained that one of RITSEC’S functions is to help Arab countries develop software industries, and that she would be happy to commit resources to this develop software industries, and that she would be happy to commit resources to this project. She can be reached at (202) 341-1761 (tel), (202) 34102139 (fax); or Email: HRAMZY@RITSEC.COM.EG.

Regional Information Technology Institute (RITI)

The Regional Information Technology Institute (RITI) is a training facility located in Cairo and established by RITSEC in 1993. RITI’s mission is, “to support information technology, software and management development in the Arab region for delivery of first class professional managers and experts using state-of-the-art information technology concepts, tools, and techniques”. The Information Technology Institute in Giza is a modern hi-tech teaching facility where most students participate in a rigorous 9 month software engineering curriculum. RITI also provides and MBA program and several management, professional, and executive development courses.

A University of Florida researcher met with Mohamed Salem, Director of the Fresh Graduates Program a the Information Technology Institute, to discuss how RITI’s experience in training software engineers could be helpful to the Palestinian development project. Mr. Salem explained the framework of RITI’s Combined Software Application Development Program, which is divided into:

•  
• a 15 week Foundation Module;
•  
• a 15 week Focus Module; and
•  
• an 8 week Performance Module.

Entry into this fully government-sponsored program is restricted to only the top post graduate students, primarily with engineering backgrounds from Egyptian universities. Details of the curriculum are provided in the RITI documents in Appendix B.

Dr. Salem attributed the success of the Institute to:

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• Air conditioned, comfortable, modern computer labs;
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• The highest quality instructors;
•  
• A student to hardware ratio of 1:1;
•  
• A lab assistant to student ratio of 1:10;
•  
• A strict work ethic supported by rigorous performance criteria.

Student at the Institute typically have 7.5 hours per day of instruction, for 6 days a week. RITI boasts a 100% job placement rate for its graduates.

The RITI, in addition to the many Israeli software engineering training programs previously mentioned, is an excellent model for the Committee to use in creating a similar program for Palestinians. Due to RITI’s affiliation with RITSEC, it is committed to software industry development for the entire Arab region. Palestinian students are welcome to attend the information Technology Institute in Giza, provided they meet entry-requirements and speak English. Additionally, members of the RITI are available for consulting the Committee on how to establish a training center in either Gaza or the West Bank. Mr. Salem and his colleagues have recently gone through the trials and tribulations of establishing their Institute, and could provide invaluable support to a similar effort in Palestine.