An aging population, deep pockets of poverty, environmental hazards – some of Asia’s most pressing worries – present a wealth of business opportunities for innovative Israeli companies. That, at least, was the message from the first annual Israel-Asia Summit in Tel Aviv on Wednesday.
"Asia is rarely discussed at the major conferences in Israel" said Rebecca Zeffert, the founder and executive director of the Israel-Asia Center, which sponsored the conference.
“If they do, they ask, ‘Why Asia?’ But it doesn't reflect the issues that are being discussed in Asia. I wanted to discuss major trends in Asia that nobody is talking about in Israel.”
Foremost among those trends are the demographic changes occurring in many of Asia’s most important economies.
A “silver tsunami” in Korea, the fastest-aging population in the world, means that more than 20 percent of its population will be elderly by 2026, according to Korea Economic Research Institute president Choi Byung-il. In China, the proportion of elderly is set to triple by 2050. Japan’s graying population, said TMT Strategic Advising partner Levi Shapiro, “is a great opportunity for investment.”
With a lower proportion of young people to care for the increasingly old population, technology can play an important part in not only care, but recreation as well.
“Is anyone thinking about the over-60 market for iPhone apps?” Zeffert asked. Whether building technological toys for the elderly, robotic dogs or age-friendly cars, she said, Israeli technology could fill a major gap. “We have the technology, we just don’t fully understand the market,” she said.
Israel’s clean technology also gives it an edge when it comes to the immense environmental challenges facing fast developing Asian countries.
The lack of energy alternatives contributes to overwhelming air pollution, both an environmental hazard and a health one, as a result of smoke inhalation, said Janet Pau of the Asia Business Council.
“Green innovation is a constant problem,” she said. “Israel has lots to offer on that front.”
In India, there are two distinct markets for Israeli business, said Arvind Gupta, an adviser on business and technology to India’s opposition Bharatiya Janata Party.
While on the one hand, there is a Western-style quality-of-life market in search of ways to make the good life even better, “there is also a world that is bottom of the pyramid, that live on less than $2 a day,” he said. “How can we change their lives? Do we have innovations, and what kind of platforms can we build?” Health, energy and education are the most important fields for that market, he said. For example, an iPhone or tablet in a semirural area offers relatively staggering computing power and could be used as a microbank or a diagnostic device.
“It’s two different markets, but it’s not a matter of choosing between them,” Gupta said.
A similar dynamic exists in China, said Ron Waldman, a partner at the Asia Business Gateway. “The nicest mall will be right next to a slum where people are living on $2 a day,” he said. While the slum residents don’t have much consumer power, their local government has access to capital and is hungry for technological ways to solve their problems, he said.
Why would Israel, of all places, hold possible solutions to this sea of problems? The recurring conclusion at the summit was that Israel has a comparative advantage in its culture of innovation.
In many Asian education systems “the common theme that comes across is that there’s a culture of performance and conformity,” Pau said.
A student from Singapore on a fellowship in Israel said in his home country, known for its world-class education in math and sciences, the focus on rote learning stymies innovative thinking.
“The education system we are moving toward is conformity and standardization,” he said.
A Korean colleague agreed, saying the hours of repetitive studying was, perhaps, “not efficient.”
Such educational and cultural differences make a big difference in the kind of output nations produce, said Gang Lu, who runs the Chinese technology blog Technode/.
“We also see many start-ups in China,” he said. “The young generation want to be entrepreneurs. The weakness is the innovation, and that’s the strength here.”
China’s start-ups depend more on copying pre-existing models, Gang said, while Israelis “are concerned about the innovation, the creative chaos.”