(photo credit: Ariel Jerozolimski)
Rather than worry about establishing big companies, the key to the future of
Israel’s economic success lies in safeguarding its comparative advantage in
start-ups and innovation, Start-Up Nation coauthor Saul Singer said at the
Israeli Presidential Conference in Jerusalem on Wednesday.
RELATED:Israeli Start-Ups Get A for Innovation, B- for Business
sometimes underestimate or misunderstand their own comparative advantage in the
world,” he said. “And they have a tendency to ask, ‘Where’s our Nokia, where are
our big companies?’” After finding that business people in Finland looked to
Israel for examples on how to innovate, Singer said he quickly realized “that
while Israelis have Nokia envy, in Finland they have start-up envy. And it turns
out that in Korea, in Singapore and all around the world, people are trying to
figure out how to do start-ups, and they have been traveling here to find
Singer, whose 2009 book is seen as the leading guide on Israel’s
hi-tech miracle, was speaking on a panel entitled “The Israeli economy – a small
leading market?” He said the Israeli economy would benefit by focusing on what
it does best – innovation and start-ups – while synergizing those talents with
the management and long-term planning skills of companies from
“Our competitive advantage is this start-up phase… the premium on
innovation is going up and the need for big companies to innovate is going up,”
Singer said. “And big companies have their separate problem: They know how to
scale things up but don’t know how to innovate,” he said, noting that Apple was
the one exception.
“The who’s who of technology – IBM, Cisco, Motorola,
you name it – they’re here in a very big way, and what they’re doing here is
effectively injecting themselves with innovation by buying up,” he
But in Israel “there tends to be not enough emphasis on what the
potential is, which is huge and multifaceted.
“I think we have to very
careful about not losing our cutting edge…we can’t take for granted start-ups,
because if we lose them, we have a problem.”
director general Haim Shani said government policy was formed upon similar
beliefs, with a focus on two major areas: “strengthening the hi-tech and
advanced industry sectors.”
“We have launched a program we have branded
under the name of competitive advantage, which understands there is no silver
bullet for the single success of the hi-tech industry,” he said. “But there are
major areas in which the government cannot plan the market but can lay down the
tracks for success.”
Shani said as hi-tech constitutes 12 percent of GDP,
it is extremely important for Israel’s future, which was one of the reasons the
government had invested $500 million in four “excellence centers” that are
currently in the works.
Bank Hapoalim chairman Yair Seroussi said the key
to the Israeli economy staying relevant was to “keep the strategy we used to
have,” which is to focus on development work in Asia, Africa and developing
“Bank Hapoalim [recently] came out with the statement that
technology is the way to keep us relevant in the future economy, the creation of
know-how and [a presence] in growing emerging markets,” he said.
panelists were asked which area of hi-tech held the biggest potential for the
future of Israel’s economy.
New York University Prof. Ari Ginsberg and
Chief Scientist Avi Hasson said medical devices were one area for huge growth.
Jerusalem Global Ventures founder Shlomo Kalish stressed the importance of new
media and clean-tech. Most of the panelists agreed that the market will decide
the direction and that Israel must