Different paths to success - the growth of the electronics sector in Ireland and Israel

Both Ireland and Israel have, over the last three decades, established inte rnationally competitive electronics industries. Israeli electronics has its origins in locally initiated R&D, is dominated by indigenously owned firms , and has its main export-market strengths in the research-intensive leadin g-edge markets for telecommunications and medical diagnostic equipment. In contrast, large-scale, US-owned plants producing computer equipment and com ponents dominate the Irish electronics sector. The authors explore the fact ors that have contributed to these very different development paths. Social and political factors are examined, along with differences in technology a nd industrial policy, and the availability and cost of suitably skilled lab our. The suggestion is that Ireland retains some cost advantages for large- scale manufacturing operations whereas Israel provides a more attractive lo cation for research-intensive activities or niche manufacturing. The experi ence of the two nations suggests important policy lessons for Israel if it is to capture more of the value added generated by the products it develops and for Ireland if it is to move towards more research-intensive electroni cs activities.