What does 2019 hold for Israeli hi-tech?

“I don’t see Israel being troubled by the trade war, either on a macro level – just America versus China – or on a micro level involving and affecting Israel.”

By EYTAN HALON
Updated: DECEMBER 30, 2018 09:53
THE SKYLINE of Tel Aviv as seen from Dolev, southern Samaria. (photo credit: MICHAL GILADI)
THE SKYLINE of Tel Aviv as seen from Dolev, southern Samaria.
(photo credit: MICHAL GILADI)
The Israeli hi-tech ecosystem has enjoyed another strong 12 months, with 2018 providing plenty of good news for local entrepreneurs seeking major investments and big-money “exits” on a global scale.
Carbonated drinks maker SodaStream, acquired by PepsiCo in a deal worth $3.2 billion; electronics manufacture Orbotech, bought for $3.4 billion by California-based KLA-Tencor; and ingredient business Frutarom, which was purchased for a staggering $7.1 billion by American company International Flavors & Fragrances, were among the big winners this year.
While it’s not all plain sailing for Israeli hi-tech, notably with the supply of local talent failing to match the rapid growth of the tech innovation sector, there is cautious optimism that 2019 will see Israel’s economy remain strong despite global trade tensions, increased Chinese and European investment in Israeli innovation, and Israeli tech taking advantage of increasingly diverse markets.
Haggai Ravid, CEO of Tel Aviv-based Cukierman & Co. Investment House, said he believes Israel may even be used as the “investment bridge” between China and the United States amid the ongoing trade war that has rapidly escalated in the last year.
“I don’t see Israel being troubled by the trade war, either on a macro level – just America versus China – or on a micro level involving and affecting Israel,” Ravid told The Jerusalem Post.
“The Chinese are an enigma, as their decision-making process is not always clear to us. But there is a very strong Chinese interest to continue to come to Israel and identify great opportunities,” Ravid said. “They know what they want – which is primarily healthcare, artificial intelligence, advanced manufacturing, agriculture, mobility, 3D printing, and even aerospace.”
While Israeli technology has benefited from a considerable increase in European investments over the past 12 months, with proximity providing significant advantages, Asian countries – including China and Japan – are likely to remain target markets for fostering economic activity.
Regarding the key fields for investment in Israeli technology in 2019, Ravid said we may see increased interest in cyber, deep tech and mobility innovation.
“Israel has been gaining a reputation in these fields ever since the famous Mobileye transaction, which has given rise to approximately 500 early-stage companies that are all trying to assist – whether it’s to prevent accidents or to reduce traffic jams,” Ravid said.
After meeting with incoming Brazilian President Jair Bolsonaro on Friday, Prime Minister Benjamin Netanyahu was eager to emphasize the potentially lucrative outcome of deepening relations with the populous South American country.
Ravid said he believes Brazil and its South American neighbors could be the key emerging market for Israeli innovation in 2019, despite the distance.
“Because we’re exporting technologies in the field of water, healthcare, agriculture and advanced manufacturing, eventually it’s going to give rise to a lot more activity between Israel and South America,” Ravid said. “Other emerging markets which are interesting are Central and Eastern Europe. There are now daily flights from Poland to Israel, and it’s not only due to increased tourism. We are currently seeing a lot more Polish businessmen coming to Israel.”