Focus on Israel
 “At ISCAR, as throughout Israel, brains and energy are ubiquitous.”
Warren Buffett, Bershire Hathaway, Letter to Investors, March 2007
“It’s no exaggeration to say that the kind of innovation going on in Israel is critical to the future of the technology business.”
Bill Gates, Microsoft founder, 2005
Like Warren Buffett and Bill Gates, Link Capital Group (“LCG”) sees commercial interaction with Israel as good business. In that spirit, LCG invests in companies which engage the economy and people of Israel, be they Israel-based companies or, alternatively, non-Israeli companies whose growth can be readily enhanced by interaction with Israel.
Investing in Israel (contents below taken from website of Israel’s Ministry of Industry, Trade, and Labor)
Israel's large concentration of talented and innovative people makes it an ideal place for investment. Characterized by groundbreaking entrepreneurship, Israel yields pioneering technologies, profitable business opportunities and high investment returns. Israel's large concentration of talented and innovative people makes it an ideal place for investment. Characterized by groundbreaking entrepreneurship, Israel yields pioneering technologies, profitable business opportunities and high investment returns.
This is why have so many major multi-nationals - Microsoft, Berkshire-Hathaway, Motorola, Intel, HP, Siemens, GE, IBM, Philips, Lucent, AOL, Cisco, Applied Materials, IBM, J&J and more - chosen to invest in Israel.
The Record
The World Economic Forum has designated Israel as one of the leading countries in the world in technological innovation. In the 2007-2008 WEF Global Competitive Index Report, Israel was ranked as the 17th most competitive country out of 131 contenders - ahead of Canada, France and the Republic of Korea. The 2007 IMD World Competitiveness Yearbook ranked Israel as the 21th most competitive country in the world.
Further Israeli highlights from the report include:
• ranked 1st for availability of qualified engineers
• ranked 1st for total expenditure on R&D
• ranked 1st for business expenditure on R&D
• ranked 2nd for venture capital availability
• ranked 2nd for information technology skills
• ranked 3rd for flexibility and availability of the workforce
• ranked 3rd for entrepreneurship of managers
• ranked 3rd for direct investment flows abroad
• ranked 4th for higher education achievements
• ranked 6th for FDI in proportion to its GDP
 Israel’s successful track record of market-creating, profit-driving innovations includes:
• M-Systems was the first to offer Disk-on-Key and Disk-on-Chip flash memory products and changed the way people store and handle information.
• The Philips Brilliance CT Scanner, developed in Israel, takes a comprehensive picture of a patient in seconds instead of minutes, in the emergency room where every second counts.
• IP Telephony was invented by the two Israelis who founded VocalTec.
• ZIP compression technology was developed by two professors at the Technion, Israel's Institute of Technology.
• Given Imaging developed the first ingestible video camera to view the small intestine from the inside, and help doctors diagnose cancer and digestive disorders.
• The technology for the AOL Instant Messenger ICQ was developed in 1996 by four young Israelis.
• Comverse invented voice-mail.
• Revolutionizing present day agriculture techniques, Netafim developed modern drip-irrigation technology and Israeli companies continue to lead this field with innovative breakthroughs.
The Resources 
With the world's highest percentage of engineers and scientists, Israel's greatest natural resource is its skilled workforce. Highly motivated, resourceful and independent, they enable Israel to stay ahead of the competition.
Israel’s workforce is particularly competitive because of the informal but effective get-down-to-business culture, exceptional ingenuity and entrepreneurial spirit. The combination of culture, skill and initiative creates a flexible, working system that allows for great adaptability while producing breakthrough technologies and quick time-to-market solutions.
Israel offers one of the world's most advanced infrastructure and the services required to conduct business efficiently and effectively. Ranked 4th in the world for its technological readiness by the WEF, Israel boasts a sophisticated communications system; reliable energy infrastructure; well-developed transportation system with modern international gateways; protection of trademarks, patents, and other intellectual property; highly developed and transparent financial system and a legal system based on common and corporate law.
Israel: A Resilient Global Economy
Israel's market economy can be characterized as resilient, global-oriented, and advanced technology-based. Over the last two decades, Israel has become famous for its high-tech capacity, particularly in telecommunications, information technology, electronics and life sciences. Its capacity for innovation and highly-educated, skilled workforce have played a key role in its rating as a high-tech center next to Silicon Valley in California and the belt along Route 128 in the Boston area.
Outstanding Economic Performance
 Despite security events that sometimes make world headlines, Israel's economy has been growing steadily. Its 2007 GDP was $155.9 billion at current prices, representing a continuation of the sustainable growth over the last few years: 4.3% in 2004, 5.2% in 2005, 5.1% in 2006 and 5.3% in 2007. Furthermore, in Purchasing-power-parity (PPP) terms, Israel's GDP per capita is on par with developed countries such as Germany and Japan. In fact, over the past 20 years, the country – with a population of only 7 million – has ranked as one of the world's five fasting-growing emerging markets.
The growth has been fueled by a steady increase in exports and foreign investment. Exports have risen by an average of 13% over each of the past three years. Foreigners show their recognition of Israel's economic potential by increasing their investments in the country. Foreign Direct investment in 2006 was a record $14.3 billion, a 197% increase over 2005. The estimated Foreign Direct Investment in 2007 is $10 billion.
Sound and coherent economic strategies also play a role in the success. Israel's economic leadership has included some of the world's top professionals, including current Bank of Israel Governor Prof. Stanley Fischer and his predecessor, Prof. Jacob Frenkel, the former chairman of Merrill Lynch. Responsible fiscal and monetary policies have accompanied reforms that have liberalized the economy, accelerated the process of privatization and made the economy more competitive. In recognition of these accomplishments, Israel was recently invited to participate in talks with the Organization for Economic Cooperation and Development (OECD) towards membership in that grouping of the world's 30 top industrialized nations.
The effectiveness of fiscal and monetary policy is reflected in performance. Government expenditure decreased from 51.5% in 2003 to 44.9% in 2007; over the same period, Gross Public Debt contracted from 102% to 81.5%, while unemployment declined and price stability was maintained.
Israel's Economic Indicators
Criteria 2004 2005 2006 2007E
GDP (current prices, B$) 128.9 129.7 140.5 155.9
GDP Real Growth Rate (%) 5.2 5.3 5.2 5.3
GDP per Capita (Current Prices, thousands of $) 18 18.7 19.9 20.9
GDP per Capita (based on purchasing power
parity) 27,289 29,044 30,464 31,767
Exports of Goods & Services (B$) 52.8 57.9 62.6 70.65
Imports of Goods & Services (B$) 52.3 57.5 61.7 73.4
Unemployment Rate (%) 10.40 9.00 8.4 7.5
Inflation Rate ( CPI, end of year) 1.20 2.40 -0.1 3.3%
Inward FDI (current prices in B$) 2.1 4.8 14.2 10
Current Account (% of GDP) 2.30 3.30 4.90 3.7%
Sources: The Ministry of Finance (2008), International Monetary Fund (2007)
Exports Lead the Way
Exports ($70.65 billion in 2007) are the engine that drives the Israeli economy. First and foremost is the high-tech sector, which accounts for 75% of all industrial exports, the highest percentage in the world.
The increase in exports is supported and enabled by an extensive network of international trade and economic agreements, including investment-protection agreements and treaties for the avoidance of double taxation. Israel is integrated into the global economy, through free trade area agreements with the NAFTA countries (the U.S., Canada and Mexico), the European Union, EFTA, Jordan and Turkey. It also cooperates with neighboring Egypt and Jordan through Qualified Industrial Zone (QIZ) agreements with the United States, giving co-produced goods preferential access to U.S. markets.
Constantly seeking to expand its network of trade cooperation through bilateral agreements, Israel recently signed a free trade agreement with the Mercosur countries (Argentina, Brazil, Paraguay and Uruguay). In addition, Israel has developed an extensive network of technical cooperation, through R&D accords with many countries.
An Ecosystem of Support 
Through government agencies like the Ministry of Industry, Trade and Labor's Office of the Chief Scientist and Investment Center, a network of technology incubators for very-early-stage technologies and an active and alert private venture capital system, Israel provides extensive support for new ideas and technologies, as well as the refinement and further development of more traditional industries. Israel invests strongly in its educational system, the source of many of the new technologies for which it is famous, and in R&D, where the investment of 4.8% of GDP is the highest in the world. The investor-friendly environment is enhanced by government polices including tax rates and investment benefits.
It's hard to minimize the role of the Israeli venture capital industry, ranked second in the world (only to the U.S.) by the World Economic Forum. Venture capital continues to pump a steady stream of essential financial resources into the technology sector, channeling its funds and knowledge into early-stage companies, especially in the technology sector.
This ecosystem of support has fostered what has become the world's highest percentage of high-tech production relative to GDP, and the second-highest concentration of high-tech companies, behind only California's Silicon Valley. The fact that Israel is the foreign country with the most companies listed on NASDAQ, the main stock exchange for technology companies, is testimony of its high-tech prowess.
The Investors Keep Coming
 In recent years, Israel has become a magnet for foreign investors. Almost every day, someone else discovers the opportunities that Israel has to offer – and takes advantage of them by setting up a new plant or development center, or joining into partnership with an Israeli firm. The list of those who have taken advantage of Israel's unique assets – among them the skilled, educated workforce and cutting-edge R&D capabilities – by establishing subsidiaries, production lines or R&D centers include some of the top international companies, names like Intel, Microsoft, Motorola, Google and many more.
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