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More than positioning: Israel's tech challenges

ByKARIN MAYER RUBINSTEIN
September 5, 2016 17:18

Israel seeks to also take the lead in other realms related to innovation development.

Israeli tech top executives talk

Israeli tech top executives talk. (photo credit:Courtesy)

When referring to the image of Israeli high-tech in the world, many are quick to mention the slogan "Start-up Nation," which helped position Israel's status at the top of the world’s high-tech and entrepreneurship. There are a few suggested answers to the great mystery – how did a small, young country, at the center of the Middle East, turn into a technological entrepreneurship superpower, second in its achievements only to the American Silicon Valley? The explanations vary: from Israelis tending to take chances, to our youngsters still getting educated during their military service to be task oriented and to be team players. This is evident in the ever-growing ecosystem, thriving with innovation and high-tech centers from the country's north to its south.

However, being highly positioned and well branded is not enough for us. Israel seeks to also take the lead in other realms related to innovation development, i.e. in the activity scope of multinational corporations' (MNC) R&D centers, in increasing private and governmental investment in R&D, in establishing sustainable industry in Life Sciences, etc. At IATI, the umbrella organization for the high-tech and life sciences industries in Israel, we work to promote the industry in a way that will allow the Israeli economy to continue to thrive in a global competitive environment. There are around 700 entities from Israel and abroad operating under IATI's umbrella: entrepreneurs, start-ups in different stages, multinational companies, venture capital funds, accelerators, incubators, R&D and innovation centers, tech transfer companies, academia, etc. We create hundreds of connections and opportunities for entrepreneurs and Israeli companies, while strengthening the connections between different sectors of the industry, and between the local industry and other countries. IATI also works with the government in order to raise support and to set in motion strategic moves for the advancement of the industry in Israel. 



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And indeed, Israel is at the center of attention for investors and funds worldwide and for MNCs seeking investment opportunities, as shown by the numerous R&D centers and by acquisitions conducted by Facebook, Apple, Google, Microsoft and other leading companies. There are about 300 international R&D centers operating in Israel, employing almost half of the industry's employees.

This activity is paramount for the country, creating numerous employment possibilities, generating income for the state of Israel through taxation, bringing vast knowledge, and enhancing collaborations and acquisitions of local Start-ups.

Nevertheless, we are facing more than a few challenges we will have to tackle in order to preserve or even strengthen Israel's leading position in technological innovation.

Firstly, many countries are breathing down our necks, investing vast funds in attracting R&D activity. In order to encourage the construction of new R&D centers in Israel and the expansion of operating ones, collaboration between the industry and the government is required. To that cause, IATI works vigorously with the governmental and business sectors. The more the MNCs will feel that Israel is offering not only fertile ground for entrepreneurship, but also financial and regulatory stability and certainty – through, for example, taxation or IP laws – the more appealing Israel will become for them; following the OECD's BEPS project, this is more so today than ever before. With joint work we will be able to see the life sciences field turning into a significant branch of Israel's economy, with more MNCs' R&D centers and with more export of medical technologies. The life sciences industry is already prominent in Israel; IATI's database alone has over a thousand life sciences companies registered in it. The tech transfer companies, representing research labs from universities and hospitals, constitute today a copious source for patents and innovative IP in the fields of pharma and medical equipment. In the past year we have seen vast activity in the field, with global investments of hundreds of millions of dollars going towards the local industry.

These days we are also working to encourage Israel's financial institutes to invest in local tech companies. The investment in technology companies is good for the investors, good for the saving public and good for developing Israel's advanced industries, and we believe that increasing the investments from the financial institutes, that control over a trillion shekels, will lead to a huge leap for the industry.

Another challenge is training the next generation and promoting workforce diversity in the industry. Tomorrow's high-tech employees are today's elementary and high-school students. In order to secure the industry's future, we must work on several levels to promote STEM education. We need to teach children, as young as elementary school students, to love knowledge and we need to remove obstacles to technological and business education and make it accessible for all walks of the Israeli society – including the social and geographical periphery. Increasing the workforce diversity in the industry is not only a moral imperative, but also a key factor for excellency. Enriching the diversity gives access to varied mindsets that complete each other, encourages creativity and enriches the DNA of the human resource. Supporting programs of workforce diversity and increasing the investment in STEM education, will allow us to raise the next generation of the Innovation Nation.

We must continue and work, with the opportunities presented to us, as well as with new opportunities we create, to make Israel even more appealing to MNCs and to base Israel's innovation industry on a diverse workforce, consisting of women, men, haredim, Arabs and people with special needs alike.

More than anything, we must understand that Israel should not settle for the (in itself dignified) title of the "Start-Up Nation" and similar slogans, but to strive for a long lasting status as the "Innovation Nation." We can see signs of the internalization of this change in mindset with the recent rebranding of the Office of the Chief Scientist into the "Innovation Authority" - a new, stronger and more operational entity, that I had the honor of serving on its search committee alongside the Chief Scientist and under the Minister of Economy. IATI is working for the entire innovation industry – Start-Up companies, MNCs, Venture Capital Funds and any other factor of interest in the Israeli High-Tech. Despite the challenges we face, the potential is already here and it's enormous. All that is left is to join hands and work with persistence in order to realize that potential in the best way possible.

Karin Mayer Rubinstein is the CEO of IATI (Israel Advanced Technology Industries).

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  • israel business
  • israel tech
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