Joseph Morgenstern, an Israeli technology consultant, was speaking from Tel Aviv, just a few blocks away, he said, from the cafe where a Palestinian suicide bomber struck last weekend. As he spoke late Wednesday, Israeli Defense Forces were laying siege to Palestinian cities.
But Morgenstern, like many others who commented on how Israel's high-tech sector might be affected by the turmoil, painted a surprisingly upbeat picture of the situation. The daily terrorist attacks, the warnings against travel, the precarious political situation -- these were all reasons to be concerned, Morgenstern allowed, but he said nobody in Israeli tech is panicking ... yet.
A primary worry of many companies is security. While declining to detail the specific measures taken, Israeli firms and American firms with operations in Israel said that they're doing all they can to keep their employees safe.
In an indication of Israel's new business climate, a weblogger in Jerusalem reported that his company, which he didn't name, sent out this message to staff this week: "All the company employees that are carrying weapon should contact (the) security officer, to clarify a few details about the policy of carrying weapon at work."
Chuck Malloy, a spokesman for Intel -- which has two chip fabrication facilities and about 5,000 employees in Israel -- said that his company is "not naïve."
"We've been looking at the situation for a number of months," Malloy said, "and ever since Sept. 11 all of our facilities are operating under an enhanced set of security measures. None of our facilities are located in close proximity to where any of the disturbances are taking place, but we're monitoring it all the time."
Morgenstern, who has published the Israel High Tech & Investment Report for the past 18 years, says that the Israeli economy has faced darker days than these.
For the first time since 1982, the government called up reserve forces this week, and there is some concern, Morgenstern said, that if its incursions into Palestinian areas continue for a while or war is expanded on other fronts, many men will be called into the army.
"But so far, it's only been about 20,000 call-ups, so we've had much more massive call-ups than that," he said. "So at the moment, since the decision to move in, they're essentially mobilizing combat forces and not high-tech executives -- not CEOs, CTOs, CFOs -- so we don't really think that the high-tech sector is at this stage affected too much."
But what about the fact that the U.S. State Department warned Americans against traveling to the region?
"That's a good question," Morgenstern said. He explained that business travel into and out of Israel has been hampered for many months, because foreign firms discovered they could not buy insurance to cover their executives headed to the Middle East.
"So then, 80 percent of normal travel ceased," he said. "However, you know, life cannot go on like that, and I know more than a number of examples of high-tech executives who said to their American customers, 'OK, you can't come here, why don't we meet halfway, why don't you meet us in Paris?'"
Back in the salad days of the global technology industry, Israel's tech economy boomed. Startups started up in scads, and there was even hopeful, venture-capital-funded talk of an eventual peace between Palestinians and Israelis cemented in microchips.
"We have discovered that science is richer than land. It has no limits," former Israeli Prime Minister Shimon Peres, and current foreign minister, said during his opening remarks at Comdex Israel in 1999. "I am very glad to see this gathering of our neighbors and ourselves discussing the future."
He added that the "Palestinians must be as advanced in high tech as us. Our philosophy must be that the better the Palestinians have it, the better neighbors we will have."
A year after that, as the Israeli economy and its hopes for peace began to simultaneously slide, a tech-aided peace between Palestinians and Israelis began to look more and more fantastical, and now of course it seems positively Pollyannaish.
The handful of technology firms Wired News could locate in the Palestinian territories could not be reached for comment this week. The official site of the "Palestinian Government" -- at gov.ps, the only site at the controversial dot-ps domain name -- seemed to be down all week.
Many Israeli businesspeople who commented were apparently unfazed by the deepening hostilities. Not only have Israeli businesses weathered the country's constantly cold relations with its neighbors, but they've done fine during its half a dozen hot wars, too, they said. And if Israel's once-white-hot tech sector feels tepid now, some said, the global recession, more than Mideast fighting, is the likely cause.
Indeed, Morgenstern said, there might even be some positive aspects for some firms. For example, the weakening of Israel's currency, the shekel, will make it cheaper to do business with their tech firms, many of which rely heavily on exports.
Eli Barkat, the CEO of BackWeb, an Israeli-founded software company, said that he thought the country's long-term tech prospects were likely to "flourish," especially for technologies (like his company's) that focus on "emergency communication and offline communication. If you name the top five Israeli companies, many of them are in security and communications. You won't find a lot of Amazons. The Israeli core strength is in security and communication, which is a result of the military and intelligence."
The Israeli daily Ha'aretz reported on Thursday a couple of large foreign investments in the Israeli biotech industry, which is one of its strongest fields right now.
Ora Coren and Oded Hermoni, the paper's business columnists, wrote: "Some of the participation agreements with the foreign companies were signed in the past couple of weeks, just as the Israeli government was declaring a state of war, and with an increasing wave of terror attacks. Some of the Israeli firms reported that the foreign partners had not even raised the matter as a possibility of withdrawing their involvement, which obliges them to invest for at least the next six years."
"One draws some comfort, supposedly, from the research potential of Israeli scientists, which overcome the dangers of the dark current times."
