R&D: At home or abroad?

ECI Telecom chose to set up its latest R&D site in Israel. Gazettabyte met with Chaim Urbach, ECI’s head of global R&D operations, to discuss why it decided to locate its latest site in Israel, and how the company can compete with the leading telecom players that have considerably larger R&D teams and budgets.

Omer Industrial Park in the Negev, Israel - the location of ECI Telecom's latest R&D centre.

Chaim Urbach likes working at the Omer Industrial Park site. Normally located at ECI’s headquarters in Petah Tikva, he visits the Omer site - some 100km away - once or twice a week and finds he is more productive there. Urbach employs an open door policy and has fewer interruptions at the Omer site since engineers are focussed solely on R&D work.

ECI set up its latest R&D centre in May 2010 with a staff of ten. “In 2009 we realised we needed more engineers,” says Urbach. One year on the site employs 150, by the end of the year it will be 200, and by year-end 2012 the company expects to employ 300. ECI has already taken one unit at the Industrial Park and its operations have already spilt over into a second building.

Urbach says that the decision to locate the new site in the south of Israel was not straightforward.

The company has 1,300 R&D staff, with research centres in the US, India and China. Having a second site in Israel helps in terms of issues of language and time zones but employing an R&D engineer in Israel is several times more costly than an engineer in India or China. 

The photos on the wall are part of the winning entries in an ECI company-wide photo competition.

But the Israeli Government’s Office of the Chief Scientist (OCS) is keen to encourage local high-tech ventures and has helped with the funding of the site. In return the backed-venture must undertake what is deemed innovative research with the OCS guaranteed royalties from sales of future telecom systems developed at the site.

One difficulty Urbach highlights is recruiting experienced hardware and software engineers given that there are few local high-tech companies in the south of the country. Instead ECI has relocated experienced engineering managers from Petah Tikva, tasked with building core knowledge by training graduates from nearby Ben-Gurion University and from local colleges.

Work on the majority of ECI’s new projects in being done at the Omer site, says Urbach. Projects include developing GPON access technology for a BT tender as well as extending its successful XDM hybrid+ SDH to all-IP transport platform, which has over 30% market share in India. ECI is undertaking the research on one terabit transmission using OFDM technology, part of the Tera Santa Consortium, at its HQ.  

“We realised we needed more engineers”  

Chaim Urbach, ECI Telecom

Urbach admits it is a challenge to compete with leading Far Eastern system vendors on cost and given their R&D budgets. But he says the company is focussed on building innovative platforms delivered as part of a complete solution. “We do not just provide a box,” says Urbach. “And customers know if they have a problem, we go the extra mile to solve it.” 

Omer Industrial Park

The company is highly business oriented, he says, delivering solutions that fit customers’ needs. “Over 95% of all systems ECI has developed have been sold,” he says.

Urbach also argues that Israeli engineers are suited to R&D. “Engineers don’t do everything by the book,” he says. “And they are dedicated and motivated to succeed.”

For more photos of the Omer Industrial Park, click here