Of course, there’s a good reason for that, says Knesset Member Robert Ilatov of the Yisrael Beiteinu party. “Until now, the hi-tech industry was able to hold its own. But with the recent worldwide recession, investment money has almost dried up.” With hi-tech such an integral part of the economy – constituting as much as half of the country’s exports – the government really has no choice but to get involved, at least temporarily, in order to keep the industry alive to fight another day.

Of course, nothing comes for free – and with the government set to become an investor in Israeli hi-tech, entrepreneurs should prepare for at least some strings, if they take the cash, says Ilatov. “Obviously there must be a balance – a comfort level that both the government and private investors and owners will feel comfortable with.” But, he adds, “Like any other investor, the government has a right to ask for conditions from those who benefit from the taxpayer’s money,” he says.

There is a difference between the government and private investors, though; while an angel or VC looks at the bottom line, the government is likely to look at the “greater good” its money can bring about. “It’s not just about the developers and engineers,” Ilatov says. “For every worker in hi-tech there are six or seven supporting workers – the waitresses in the restaurants where they eat lunch, the cleaning staff who prepare the office for the workers, the taxi drivers who take the software people home at night.” If 7,000 hi-tech workers lost their jobs this year, that means some 50,000 other workers  are out of a job, too. Any help the government proffers to the hi-tech industry must go to help those support workers, as well as the elite tech workers, the MK says.

Clearly, Ilatov has done some thinking about the troubles Israel’s hi-tech industry faces – and he has decided to do something about it. Ilatov has established the Knesset’s first Hi-tech Lobby group, which he hopes will bring together government officials, leaders of varied hi-tech industries, university administrators, and members of Israel’s financial community, in order to give Israeli hi-tech a boost in the arm during troubled times.

The first meeting of the lobby saw well over 100 people get together at the Knesset to try and put together an agenda for a plan of action. Amazingly, this was the first time the Knesset saw such a comprehensive discussion of the problems and plusses of Israel’s hi-tech industry, Ilatov told me in an interview later. And, he added, by “hi-tech” he means all the advanced industries Israel is known for – computer networking and security, Web 2.0, biotech, medical devices, cleantech, etc. Representatives of those industries were present at the first lobby meeting, with speakers summing up what their businesses were facing as the recession continues.

Startups and established companies are, of course, just one aspect of the industry, he adds; it all starts in the universities, and maybe even earlier, at the high school level. So, there were also a number of top university officials at the meeting as well, discussing the difficulties faced by computer and science departments in the schools. Fact: The student to lecturer ratio in the country’s computer science departments are among the worst of any department, hovering at about 40:1.

With so many diverse ideas and interests represented, more than an initial exploration of the issues could not have been expected, says Ilatov. “The meeting was very helpful in clarifying a possible agenda, to help us decide what, if any steps to take or legislation to pursue in order to help the industries survive and thrive.”

One of those pieces of legislation is likely to be a rule that will require Israeli pension funds to invest at least some of their money in Israeli hi-tech. “Much, if not most, of the investment and VC money in Israeli hi-tech comes from abroad,” says Ilatov. But pension funds, arguably the Israeli investors with the biggest pockets, have barely given a shekel to local hi-tech, preferring to invest their money in far-flung places, says the MK. If it’s good enough for American VC’s to sink their money into an Israeli startup, Ilatov says, it’s good enough for a huge pension fund to allocate at least some of their funds to the same purpose. “It’s not like it’s any riskier than some of the other things they’ve invested in,” like Central European real estate, Ilatov says. “Americans who invest in Israeli hi-tech get excellent returns, and pension fund investors will as well. We intend to bring up the issue with the heads of the pension funds and try to persuade them that it’s in their, and the country’s, best interests to invest locally. If they agree, that’s fine. But if not, legislation of some sort may be necessary.”

Several other issues were brought up at the meeting: A number of speakers derided a new law that is to be passed as part of the “package deal” between the government and the Histadrut, which gives the union the right to organize among workers in any workplace, including in hi-tech companies (Ilatov thinks this is a bad law, because it will only scare off investors, and won’t help workers, who make far more than the average wage anyway). The names “India” and “China” were mentioned by more than one speaker, the latter for the potential business opportunities available, and the former in the context of the formidable challenge Israel faces in maintaining its position as a hi-tech power. And, there were calls to simplify the investment process, eliminate red tape, and generally do everything possible to encourage foreign investment.

One would have thought that many of these issues would have been hammered out, considering the importance of hi-tech to the country’s economy. But they haven’t, and that’s worrying. Where does one begin? With the universities? Helping existing companies stay in business? Helping fledging startups with great ideas to survive long enough to turn a profit, instead of selling their technology to multinationals for a relative pittance? Do we start with the universities, helping them produce more qualified personnel to fill the great need for top quality people? Or do we try and encourage a love of the sciences in high school and even elementary school students – many of whom, according to one speaker at the meeting, don’t know their multiplication tables as late as sixth grade? Yes, MK Ilatov says. All these areas are important, and we are just going to have to find a way to fund programs to work on all these levels. A tall order indeed, it would appear.

To all those who think being a Knesset member is a cushy job: Take an example from MK Ilatov. I’m sure he didn’t think setting Israel’s hi-tech policy right would be easy, but I’d guess he didn’t realize it would be this complicated. Like Charlie Brown, he has a chance to be a hero, if he succeeds. Let’s not think about the alternative.

In an exclusive Yom Ha’atzmaut interview with the Jerusalem Post, Oron says he is decidedly optimistic about Israel’s hi-tech future. In fact, he says, “the consensus seems to be that by the beginning of 2010, companies will begin to see significant growth in revenues, that will be translated into financial performance several quarters later.” And that growth, says Oron, will be strong enough to “raise the boats,” fueling development in all facets of Israeli hi-tech – and not just in the hot areas of cell communication or Web 2.0 applications, but in “traditional” areas of IT development – bringing back in its wake the hi-tech jobs that were lost during the current downturn, and then some.

Oron has been working with Israeli hi-tech companies for decades. He was, among other things, President and CEO of Aryt Industries; Co-Founder, President and CEO of Reshef Technologies; Co-Founder and Chairman of Telegate Ltd; and former chairman of the Israel Venture Association (http://www.iva.co.il/). Among his fund’s recent successes was the acquisition of anti-fraud solutions provider Actimize (http://www.actimize.com/), since acquired by Nice; semiconductor maker Siliquent, acquired in 2005 by Broadcom (http://bit.ly/195gPF); and optical measurement solution provider Cognitens (http://www.cognitens.com/), acquired in 2007 by Hexagon. Plus, he’s brought many companies to market with successful IPOs. He’s seen companies come and go, and helped businesses thrive through good times and bad. And, Oron says, while there is what to worry about, the overall picture is better than most people realize.

“One needs to differentiate between the market for tech products and services, and the funding sources available to hi-tech developers,” Oron says. Echoing the sentiments of many economists and experts, Oron says the problem is more one of Wall Street than Main Street. “The large U.S. tech companies like Apple, Microsoft, and the cellphone producers and service providers are doing OK, with sales down at most 5% or 6% overall. Lower sales in the U.S. and Europe are being compensated for by steady demand in Asia. We have a similar situation in Israel; it’s not that demand for products has evaporated, it’s the financing for fledgling companies that is hard to come by.” While most of us are familiar with the credit crisis at the banks, VC and angel funding is extremely weak as well, Oron says – and the investment markets is basically treading water. “The financing food chain for startups is on the verge of collapse. One hopeful sign is that we have seen some activity in the mergers and acquisitions area recently, but overall, tech companies that have only their ideas and patents as assets are suffering,” Oron says.

With that, Oron says he has become much more hopeful in recent weeks – after speaking to high officials in the Finance Ministry regarding the government’s business bailout plan, announced last week. “The message is very clear that the people currently running the Treasury ‘get it,’ and their plan should help ease access to money for many startups. In addition, the government plans to significantly increase – perhaps double – the Chief Scientist’s development budget, meaning that many more companies will have access to development funds.” It’s the first comprehensive government response to the crisis, and it’s a good one, he says. “It’s a serious plan that should accomplish what it is setting out to do.”

And what projects, in his opinion, should the Chief Scientist be funding? Where are the strong growth areas going to be when things do bounce back? “Everything,” says Oron. “There is going to be huge demand for everything Israel specializes in, from broadband backbone to audio technology to last mile wired to wireless. Those who say that there is no need for many of the traditional technologies Israel has specialized in are just not aware of what is going on out there. Already there is a huge demand for technologies that can handle the heavy bandwidth necessary for the heavy internet traffic generated by online video. This market, along with many others, will continue to show strong growth, and it is in these traditional IT areas that Israel has a strong presence.”

Israel’s medical technology providers will also see strong growth, Oron says, while cleantech/greentech is likely to have less of an impact on local growth than many expect. “Much of the IT work being done by private companies trickles down from research and work being done for the IDF,” Oron says, “so we have a built-in market to produce for – something that doesn’t necessarily exist for cleantech applications.” That’s not to say there won’t be growth in that area as well, says Oron – but the areas that Israel has excelled in for years will continue to be just as important, if not more so, for local companies.

And despite rumors to the contrary, Israel’s technology base and innovative drive is as strong as ever. Commenting on the latest doom and gloom rumor – that China is somehow supplanting Israel as a world center of innovation – Oron says that nothing could be further from the truth. “I have been in this business for many years, and every little while someone comes up with a similar idea, that Israel is losing its edge. Everyone we speak to – world class investors, people from Silicon Valley, the elite of IT – who looks at the business plans, technologies, and business models of Israeli companies comes away highly impressed. I won’t say we don’t have some weaknesses when compared to China or India, but losing our innovative edge is definitely not one of them.”

And with all that expected growth, says Oron, those who were laid off this year have a good chance of getting a job – perhaps even their old job – next year. “The layoffs have not been uniform – we’ve been seeing two kinds of layoffs in recent months,” Oron says. “While everyone is cutting back, those working for local branches of multinationals are being more badly affected, since the multinational tends to protect workers in their home country, preferring to sacrifice their foreign satellites. But that’s this year; soon, hopefully by next year, the tech sector will be perhaps the world’s fastest growing sector. Based on the amount of data being generated and the services currently available to fulfill those needs, it’s quite clear that the market demand will be strong. And when the financial markets come back and funding is available, growth will be as strong – and probably stronger – than it has been in recent years.” It’s an optimistic forecast – but as someone in a position to know, Oron’s optimism can give all of us hope that next Yom Ha’atzmaut will be a lot happier for many more Israelis!

IMHO, they’re wrong: It’s a very useful service, but not necessarily for the reasons its boosters usually cite.

LinkedIn, as you may know, is to business networking what Myspace is to social networking. Actually, it’s difficult to really compare the two, since Myspace is much larger (the largest) as far as registered users go. In fact, LinkedIn is among the lesser of the social networking communities, with only 17 million users, according to the ever-accurate Wikipedia people; there are plenty of sites with far more users. What distinguishes LinkedIn, however, is that it is the only “trusted” site for business contacts, considering the jam its closest rival Plaxo got into not too long ago.

Thus, while you might find teenagers dominating Myspace and “party people” college types hanging around Facebook (not that either haven’t been courting other groups), the LinkedIn crowd is more of a practical, down-to-earth, get-it-done-now type of user – i.e. they are investing their time and energy in building up a network of users to somehow benefit materially at some point in the future. One reason adults like LinkedIn is its policies regarding whom one can link to (adopted now by many other sites); you either have to be invited personally by a user and/or introduced to him/her by someone in your network.

LinkedIn user-profile pages often read like a resume, with users listing their work experience and education, along with noteworthy accomplishments, Web sites and other relevant information. You choose how much data you want to share (you can close yourself off to invitations as well); there is also a listing for recommendations of your work by others, or recommendations by you for others (more on that below). And, there are various tools, such as people and job search, questions and answers to people in or out of your social network, and social networking groups you belong to (ditto). And, of course, the all important contact list.

One interesting phenomenon I have noticed with this service is what I call “LinkedIn fever.” One person in an organization joins the site and starts contacting his or her co-workers in the office, inviting them to join. Chances are the invitee has heard of LinkedIn; that it’s a “good” site to join and can “help you get a job or something.” Very quickly they learn that the measure of success in LinkedIn is the number of contacts on their list, so they start inviting other people in the organization – the easiest people to invite (since they already have the invitee’s e-mail address, usually the only free way to “cold call” potential contacts).

The “fever” sweeps through the organization and within a week or so, everyone is connected. That’s it for most people; they occasionally visit their profile (LinkedIn is very good about sending out subtle reminders, telling you when other people in your network have updated stuff), but rarely look beyond that list of contacts. The more competitive among them may dun friends and acquaintances outside the organization to build more contacts. But for them, too, it stops there.

So, just what is LinkedIn really good for? Will it help you get a better job? According to most users I have met, the answer is no – even though they may have used the job-search function on their profile page (many of the jobs listed, by the way, claim to be “exclusive to LinkedIn”). But even that, I believe, is not the raison d’etre of LinkedIn – although it can be used that way if you have very high-in-demand skills. (But then again, potential employers are probably knocking your door down anyway if you do.) Plus, if you live in Israel, you’ll find that while there are some jobs available, the pool is very limited if you’re not a mid- to high-level programmer for Web 2.0, or a former CEO.

So, I ask again – what is LinkedIn good for? Here’s my answer: LinkedIn is an excellent tool to enable you to focus your career goals, advertise them to others inside and outside your industry, and get you noticed on the Web. If you use it properly, it can help create a “buzz” about you, which probably will lead you to opportunities you would not have otherwise been exposed to.

Here’s how I see LinkedIn working for you: Building a social network of people you know is a fine thing. However, since these people are probably already in your address book, the idea would be to leverage people you know professionally to “virtually” meet others whom you don’t know, but who have a profession or industry in common with you. The point of building a connection portfolio is to build a reputation among people who might know someone, somewhere, who can help you find information, potential customers – or even a new job. Used properly, the LinkedIn tools can help you build your reputation and enhance your professional standing.

Lest you think I am “on” something, let me elaborate. Honing your LinkedIn profile page is your first mission. It’s like a resume, but much better because people with whom you hook up will actually look at your profile. (LinkedIn provides information on how many people from which industry checked out your profile.) So what do you want to say about yourself? Remember: Your LinkedIn profile page gets picked up by Google, meaning that non-LinkedIn users may come across it as well. If for nothing else, LinkedIn is useful as a tool to help you focus, to get you to consider how you want others to see you professionally.

And once you organize your image, other aspects of LinkedIn’s usefulness fall into place. Presenting and answering questions is a great way to build up a portfolio of contacts and getting to “know” a wide range of people – as well as building up a portfolio of recommendations, another LinkedIn “power tool.” You could also start a LinkedIn group, another way to build contacts. Your name gets into other’s contact books as well, building your name and reputation. With this approach, many of the “100+ Smart Ways to Use LinkedIn” become relevant.

With the right attitude – i.e. looking at it as a way to get your name out in front of people who count professionally for you (otherwise known as networking) – LinkedIn can be of great service. After all, it is a networking site, and the tools it supplies do just that. And like any other tool, LinkedIn is what you – and only you – make of it. Maybe a LinkedIn job search won’t find you your dream job on the first try, but if the person who has the keys to finding that job is on the site too, you’re already halfway to your goal.