Business ties between Israel and Japan continue to strengthen as companies from both countries explore new opportunities for collaboration and investment. From cutting-edge technology startups to established industry leaders, Israeli and Japanese companies are finding ways to work together to drive innovation and growth as they celebrate their 70th year of diplomatic relations.
On Tuesday it was announced that leading Japanese IT service conglomerate NTT has selected an Israeli company, C2A Security, as the first project of its new Global Automotive Security Test Center. Joining C2A on the project will be Marelli, an Italian automotive component developer and manufacturer.
The Italy-based center will deliver security tests on connected cars to secure and protect their systems from cyber-attacks for NTT’s clients around the world.
“We want to apply our expertise in cybersecurity to the connected car sector,” said Marco Garelli, Head of Automotive at NTT DATA Italy. “Thanks to our Global Automotive Security Test Center, NTT DATA will be an international reference point to protect connected cars from cyber-attacks and ensure the drivers’ safety.”
Israel and Japan: getting closer every day
C2A Security’s selection was facilitated by NTT Innovation Laboratory Israel (NTT Israel), which works to integrate Israeli technologies into the services and products developed by NTT, locate products that can be distributed and marketed to NTT’s customers worldwide, and find business collaborations and investment opportunities in Israeli companies.
In an interview with The Jerusalem Post, NTT Israel’s CEO Noa Asher elaborated on how the business relationship between Israel and Japan stands to tighten, particularly in the coming years, even though the countries have already enjoyed 70 years of diplomatic relations.
“Up until 2014, there were very limited business relations between Israel and Japan. It was mostly the Japanese cars and electronics in Israel, but Israeli technology or Israel as an innovation hub was not really acknowledged in Japan,” Asher explained. “Bit by bit from 2014 and onward, due [partly] to a change of the atmosphere in the Middle East and the increased understanding of sorts of innovative technologies coming from Israel, more and more Japanese companies have started to look into Israel.”
Japan as a foreign direct investor
Since that turning point 9 years ago, Japan has grown increasingly comfortable investing in Israel. In 2021, Japan represented 16% of Israel’s foreign direct investment, with a sum of around $13 billion in cumulative investments.
When asked whether Japan is wary of the Israeli government’s proposed judicial reform — which has been criticized by experts as a threat to Israel’s reliability to foreign investors due to its centralization of power within the Knesset — Asher suggested there’s a chance that it may ruffle some feathers, but there’s also an argument to be made against that inclination.
“It will probably take two to three years and until we have this Free Trade Agreement ratified, but this will really influence trade relations between Israel and Japan, taking down trade barriers and promoting all sorts of joint activities and investments. It’s really a great thing.”CEO Noa Asher
“Japanese companies are looking at investments in Israel for strategic reasons; they're really looking for deep tech,” she said. “I hope that they're not really worried or concerned about the financial aspects of investing, but more in the strength of the technology they’re investing in.”
Direct flights and free trade abound
Asher highlighted the business importance of direct flights from Israel to Japan, which are expected to launch this March from El Al. “It’s going to bring the Japanese and Israeli population closer together, which will continue to increase our desire to work together,” she said.
As well, increased movement from the Japanese government regarding the establishment of a Free Trade Agreement between the two countries is very promising, said Asher. She herself has played an important role in advancing that agreement, as she recently served as the Economic Minister at Israel’s embassy in Japan until she began working for NTT in 2020. “It's something that the [Economy Ministry] has been working on for two decades. And finally we’ve gotten to a stage where the Japanese government has said ‘yes, let's start.’”
The establishment of a Free Trade Agreement would throw fuel onto the current spark of business interaction between the two countries, enabling them to reach a heightened stage of international collaboration and cooperation.
“It will probably take two to three years and until we have this Free Trade Agreement ratified, but this will really influence trade relations between Israel and Japan, taking down trade barriers and promoting all sorts of joint activities and investments,” Asher said. “It’s really a great thing.”