This case study of Israel's ICT sectorhighlights the important role of the government in the emergence of Israel as apower house of high-tech in information and communications technology, by layingthe foundations for private industry to support innovation, and through heavyinvestment in building the much-needed human capital resource. The mainstrategic asset is human resources. The quality of human capital is essential toinnovation and economic growth. Skilled human resources are the most strategicassets in the knowledge society. The Israeli higher education system, mostlysupported by the government, contributed a great deal to the success of Israel inthe high-tech arena.