Israel’s tech secto r is about to accelerate into a Star Trek style warp speed, says OurCrowd CEO Jon Medved..
(photo credit: REUTERS)
Israeli innovation is about to enter warp drive, OurCrowd CEO Jon Medved tells me, borrowing a phrase from the iconic Star Trek TV series that described the propulsion system that would take the USS Enterprise into faster-than-light flight.
With a bunch of good news in recent weeks, such as fourth-quarter 2016 growth figures of 6.2% – pretty much warp drive itself – and record low unemployment of 4.3%, I decided to skip the usual politics and gloom and doom. If you are looking for something upbeat, no one fits the bill better than Medved, who describes himself as “a guy who believes in miracles.”
“What, me worry?” he says as I try to squeeze a little pessimism out of him on manpower shortages, the overly strong shekel and geopolitical risk.
But seriously, Medved sees Israel’s tech sector getting even stronger than it is now and that can only be good news.
The tech community, he explains, and especially its investment arm, is shifting its interest to deep technology. In other words, while a lot of tech companies made it big on things that “didn’t require changing the laws of physics” as he puts it, today’s tech is intensely complicated, be it machine learning, computer vision, autonomous driving or whatever.
“These aren’t apps. This is beyond the app economy – this is really complicated stuff and this is stuff where Israel shines. Things are about to get more intensely into Israel’s favor, because as the market shifts into deep technology, Israel becomes more important,” says Medved.
As Prime Minister Benjamin Netanyahu would put it as he pushes Israel’s tech on every stage, “Israel is at the nexus of the great change taking place in any technology.”
So what does all of that difficult stuff translate to in economic terms? “If Israel has already taken a disproportionate share of the innovation economy, which it has, then it is going to be getting even more,” says Medved. In 2016, he notes the tech sector in the whole of Europe – population several hundred million – attracted $13.6 billion in investment, while Israel with a population of 8.5 million drew some $4.8b. “Do the arithmetic,” says Medved, that’s 30 x on a per capita basis more than the European levels.”
While choking Medved’s enthusiasm seems about as hard as breaking the laws of physics, he does admit that there are challenges to making sure Israel’s tech sector picks up speed fast enough to go into warp drive, in particular a chronic shortage of manpower.
“We have to do essentially three things all at once,” says Medved. “The way we solve that problem is, No. 1, to widen the circle of employment in tech to include the three big underrepresented groups.
The biggest one is women; we need to bring in women in a major way, women entrepreneurs, women venture capitalists, women engineers and that’s starting to happen, but not quickly enough. We need to bring Arab Israelis into tech and finally the haredim, where we have gone from a couple of thousand to 14,000 haredim in four-year colleges.”
Second on Medved’s list: importing engineers.
“It’s really meshuga that we can import Thai farm workers and Romanian construction workers, but we can’t import Indian coders,” he says before adding, “Where do we get more added value for the economy?” That, as he notes, is changing with government programs such as start-up visas for entrepreneurs and expert visas for coders and programmers.
Third up for Medved is recognition that start-up economies are no longer about single country companies. “The smart and good start-ups today are baby multinationals with people all over the world not just selling but also in development,” he says. “Sharp Israeli companies are now relying on all kinds of talent from all over the world, with development teams in Ukraine, India, the Philippines and God knows where, and that trend is going to continue.”
While careful not to get drawn into politics, Medved notes that with United States President Donald Trump putting an emphasis on cyber security, Israel will have enormous opportunities on that front.
What Medved is willing to say is that he is a believer in the growth of Israeli technology companies and the growth of the Israeli tech sector regardless of who is in charge.
“People have got to get out of this perspective that strategic issues change over matters of weeks. The relationship between Israel and the US is so much bigger than whoever is sitting in the Oval Office,” says Medved. “It is so broad and so deep, with so many elements involved, but increasingly it’s technology and business. And what’s really interesting is how little coverage that gets, the fact that there is a $25b. trade relationship between the US and Israel. The fact is there is so much joint development of products, that academic research has gone up nearly 50% in the last decade.”
And, throwing political correctness to the winds, he adds, “Let the BDS morons choke on that.”