The headlines in recent weeks about the location of Intel Corporation’s (Nasdaq: INTC) next fab were worrying. To the average person who is not involved in high tech it may look as though this is just another tale of unreasonable behavior by the government, to put it mildly, the result of a mixture of political and other interests, the victim of which this time was a multinational company that is a household name. Or it may be that the average person was swayed by public figures and pundits who believe that this was a case of pure extortion to which there should be no surrender at any price.

But for someone who knows the high tech industry well, and allow me to take a personal position, the case of Intel is part of a far larger and more complex picture in which the government’s conduct casts a giant shadow, and the consequences are liable to see the darkness spread quickly.

Israel has been blessed by Intel. The attraction of this multinational for the Israeli economy is clear. Intel ought to be considered a bellwether for foreign investors and multinationals considering operations in Israel. From the point of view of absorbing managerial values, professional methods, productivity, growth and profitability – Israel can and should have more Intels. The government’s incentives program set itself several such targets in the past few years, and the Investment Promotion Center worked hard and even succeeded in boosting foreign companies’ investments in Israel.

Only someone who is involved in these processes can testify just how complex and complicated they are, how many work hours are needed to close such a deal, and how much subsequent investment is needed to build an R&D or manufacturing infrastructure in areas defined as needy. It is therefore even more astonishing how the officials responsible for this work allowed the possibility of Intel building another fab in Israel to slip away…Read More>>

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