Barclays to Establish R&D Center in Israel to Support their Global Operations
Barclays Capital is a global investment bank that began operating in Israel in 2008, after acquiring the Lehman Brothers operation, which included a large team of investment bankers as well as an equities research department.
The Barclays team provides advice and guidance in securities offerings, mergers and acquisitions. Since acquiring Lehman Brothers it has led many of the largest and most important Merger and Acquisition deals in Israel and has expanded its operations to include domestic bond sales, bond trading, equity sales and risk solutions.
Under the Israeli Government's Competitive Advantage Program, Barclays Capital is to establish a research and development center in Israel to support the investment bank's global operations
The Barclays Capital investment bank announced plans to open a technology research and development center in Israel, to be called the Israel Development and Engineering Center (IDEC). The center, which is to open in Tel Aviv, will supply development and engineering services meant to support Barclays' international financial activity. Barclay's plans on hiring 200 Israeli employees trained in technology and finance.
The decision to establish the center was made by the Barclays Group's management following the unveiling of the government's Competitive Advantage program to promote high-tech industries in Israel, which was formulated by the Ministry of Finance and the Ministry of Industry, Trade and Labor.
The Israeli Government's 'Competitive Advantage' Program
The program calls for the provision of incentives for the establishment of financial R&D centers by multinational financial corporations in Israel. The centers will research and develop advanced technologies meant to serve and promote the global financial industry, which employs hundreds of thousands of people in the technology field. The incentives will be provided by way of government participation in the costs of employment of new workers under a special program developed by the Chief Scientist in the Ministry of Industry, Trade and Labor. The two ministries expect more banks on the level of Barclays to follow suit and set up an increasing number of R&D centers in Israel.
The establishment of a financial R&D center by a bank such as Barclays Capital is the first step in a comprehensive plan that aims to expand the scope of exports of financial services from Israel.
The plan, currently being drafted, is to include a series of recommendations for regulatory and tax measures applicable to financial entities and potential workers in the financial services industry, that could help Israel boost exports of these services.
Minister of Finance, Dr. Yuval Steinitz, welcomed the Barclays Group's entry into the Israeli market, saying: "In the high-tech industry, as in anything else, one has to choose between moving forward and falling behind. Therefore, when considering the continued future development of the Israel high-tech industry, we chose to strengthen research and development in the field of finance and to induce leading banks and institutions to set up R&D centers in Israel. Following a year's work we reached a breakthrough, and today we see the first vanguard. We welcome the decision of Barclays Capital bank to set up an R&D center in the State of Israel".
Minister of Industry, Trade and Labor Shalom Simhon added: "The Ministry of Industry, Trade and Labor sees this plan as the first stage in expanding our business R&D policy to additional areas, such as the service sectors. I believe that the R&D activity to be carried on by Barclays in Israel will advance the Israeli banking industry by training manpower and assimilating new technologies in the financial sector".
Andrew Witney, CIO at Barclays Capital, said: "We are very excited about opening the technological center in Israel. The center will benefit from Israel's large pool of talented high-tech workers and will provide solutions for Barclays Capital's technological challenges today and in the future".
Ministry of Finance Director General Haim Shani added: "We hope very much that Barclays is only the first swallow that heralds an expansion in financial R&D in Israel. The government has shown that a little bit of creativity and investment on its part can serve as a basis for new opportunities for Israel's high-tech and finance sectors. Israel is perceived as a leader in innovation and technology and as possessing world-class human capital. Moreover, already today many Israeli firms are providing technological solutions around the globe. It is important to utilize these two advantages in order to attract additional financial entities that will establish R&D centers in Israel, widen employment opportunities and encourage the return of skilled professionals to Israel".
Ministry of Industry, Trade and Labor Director General Sharon Kedmi noted that "this is a program with great potential for developing R&D in Israel's financial sectors. The program forms part of the ministry's policy of encouraging foreign investment and bolstering employment, and it is meant to fill an existing need for sophisticated analytical solutions in the world's financial markets, based on a first class local workforce using a solid technological infrastructure.
Chief Scientist Avi Hasson commented that "the service sectors account for a significant share of Israel's GNP, and innovation in these sectors can be expected to contribute to the growth of the economy". The chief scientist added that "this program is one of a broad array of R&D tools used by the Chief Scientist's Office for the benefit of the business sector, and I see it as being instrumental in the development of Israel's financial industry. The new support tools available to the Chief Scientist's Office should enable the Israeli economy to meet the challenges facing it in today's world, which is characterized by increasing global competition".
Len Rosen, CEO of Barclays Capital in Israel, said: "We are proud to be the first international financial corporation to take part in the project. The significant involvement of Barclays Capital in the Israeli market, and primarily our extensive work with clients in the field of technology, have allowed us exposure to Israel's strong high-tech capabilities. This venture is evidence of Barclays Capital's ongoing commitment to the Israeli market, as shown in recent years by the expansion of our range of services and activities".