ISRAEL’S CULTURE OF INNOVATION IS CHANGING THE WORLD, FROM U.S.A., TO CHINA, AFRICA, & BEYOND

Good Schools Aren’t the Secret to Israel’s High-Tech Boom: Naftali Bennett, Wall Street Journal, Mar. 20, 2017— I am often asked how a country the size of New Jersey, with fewer residents than New York City, became a global high-tech force.

Can Israel's High-Tech Sector Make America Great Again?: David Patrikarakos, National Interest, Mar. 2, 2017— Here, in Israel, a joke is making the rounds. How does a Saudi do business with an Israeli? Very quietly.

An Economic Powerhouse and a Rising Hi-Tech Superpower – 25 Years of Diplomatic Relations Between China and Israel: Avi Luvton, Times of Israel, Mar. 23, 2017— This January, Israel and China marked 25 years of diplomatic relations.

From Tragedy to Tech: Israelis and Rwandans Partner to Build the ‘African Start-up Nation’: Shterny Isseroff, Jerusalem Post, Mar. 18, 2017— With a modest population of 12 million, bordered by the Democratic Republic of the Congo to the west and Uganda to the north, Rwanda today is renowned for its green highlands, active volcanoes and rare silverback gorillas.

               

On Topic Links

 

Israel Aims to Become World’s 15th Largest Economy by 2025 — Minister: Raphael Ahren, Times of Israel, Mar. 19, 2017

The Sky is the Limit for China and Israel: Meir Javedanfar, CGTN, Mar. 20, 2017

Tech Talk: Israeli Satellite to be Launched into Space: Ariel Shapira, Jerusalem Post, Mar. 14, 2017

Trump, China, and the Middle East: Roie Yellinek, BESA, Feb. 7, 2017

 

     

 

GOOD SCHOOLS AREN’T THE SECRET TO ISRAEL’S HIGH-TECH BOOM

                                                            Naftali Bennett

                                                     Wall Street Journal, Mar. 20, 2017

 

I am often asked how a country the size of New Jersey, with fewer residents than New York City, became a global high-tech force. In a dynamic world, where innovation and adaptation are crucial, everyone wants to know Israel’s secret educational ingredient. Despite its small size, Israel lists 93 companies on the Nasdaq—more than India, Japan and South Korea combined. In 2016 investors sank $6 billion into Israel’s more than 6,000 startups. Google, IBM, Apple and Intel all have research-and-development centers located here.

 

Many people look to the Israeli education system to explain this success. During my two years as minister of education I have come to understand that although Israel’s schools are good, our secret weapon is a parallel education system that operates alongside the formal one. This is where our children learn to become entrepreneurs.

 

Israel’s shadow education system has three components. The first is our heritage of debate—it’s in the Jewish DNA. For generations Jews have studied the Talmud, our legal codex, in a way vastly different from what goes on in a standard classroom. Instead of listening to a lecture, the meaning of complex texts is debated by students in hevruta—pairs—with a teacher offering occasional guidance.

 

Unlike quiet Western libraries, the Jewish beit midrash—house of study—is a buzzing beehive of learning. Since the Talmud is one of the most complex legal codes ever gathered, the idea of a verdict is almost irrelevant to those studying. Students engage in debate for the sake of debate. They analyze issues from all directions, finding different solutions. Multiple answers to a single question are common. Like the Talmud itself—which isn’t the written law but a gathering of protocols—the learning process, not the result, is valued.

 

The second component of our shadow education system is the peer-teaches-peer model of Jewish youth organizations, membership-based groups that we call “movements.” Teenagers work closely with younger children; they lead groups on excursions and hikes, develop informal curricula, and are responsible for those in their care. As an 11th-grade student, I took fifth-graders on an overnight hike in the mountains. Being given responsibilities at a young age helped shape me into who I am today.

 

The third component is the army. Because we are constantly defending ourselves from Islamic terror, 18-year-old boys and girls are drafted into the military for stints of two or three years. Young Israeli adults must literally make life-or-death decisions every day. As a 23-year-old officer in 1995, I led 70 soldiers behind enemy lines. The covert mission required me to prepare my troops, mobilize people and equipment, build contingency plans, and function under immense physical and mental pressure. These situations teach a person how to execute plans—or adapt and improvise. Consider a hypothetical 19-year-old soldier in the intelligence corps, analyzing aerial photographs or intercepted communications. She must decide if the material in front of her indicates an impending attack or not. This isn’t a rare occurrence. Thousands of Israeli soldiers experience it daily.

 

Good teachers in vibrant classrooms are necessary for children—and nations—to succeed. Schools provide a base of literacy, mathematics and social interaction. But Israel’s extracurricular system goes further. Peer-led debate and intellectual dialogue enhances learning. Actual responsibilities, like caring for younger children, nurture growth and maturity. Real-life tasks show young adults how much they are capable of achieving. These are the principles that anyone wishing to replicate Israel’s success should emulate.

 

Two qualities are needed to change the world: innovation, to think of new ideas, and entrepreneurship, to turn those ideas into reality. That is the essence of today’s economy. The way to create citizens steeped in the ethos of both is to give children, at a young age, the room to try.

 

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CAN ISRAEL'S HIGH-TECH SECTOR MAKE AMERICA GREAT AGAIN?                                      

David Patrikarakos

National Interest, Mar. 2, 2017

 

Here, in Israel, a joke is making the rounds. How does a Saudi do business with an Israeli? Very quietly. Like all the best jokes, it contains an essential truth: that in the face of mounting criticism and the spread of Boycott Divestment Sanctions (BDS) campaign on campuses across western Europe and the United States, Israeli business—notably its high-tech sector—is going from strength to strength. The “start-up nation” is living up to its name, and its benefits are being felt most strongly in the United States.

 

Donald Trump has entered the presidential office vowing to make “America Great Again.” It is hard to discern what this woolly statement—reminiscent of Obama’s “Yes We Can!” in its triumphant yet nebulous tone—means, or indeed what most of his policies actually entail. But it is clear that, as a businessman (albeit one of questionable success), his political ideology is largely economically based. Trump has said he wants to bring jobs back to the United States and to impose tariffs on imports, but this is twentieth-century economic thinking in a twenty-first-century world. As automation will increasingly come to dominate manufacturing and associated industries, technology and innovation will be the true drivers of economic growth. And nowhere are these two areas more prevalent than in the United States and Israel.

 

Jerusalem is cold. There is a biting February wind. Nonetheless, thousands have descended on the 2017 OurCrowd Global Investor Summit near the city center. With five thousand attendees, it’s the world’s largest equity crowdfunding conference. Investors looking for everything from artificial intelligence to robotics have made the trek to Israel’s capital.

 

And it soon becomes clear why. Last year, Eric Schmidt, formerly the chief executive of Google and now executive chairman of its parent company, Alphabet, told an audience at Google’s offices in Tel Aviv that “for a relatively small country, Israel has a super role in technological innovation. I can’t think of a place where you could see this diversity and the collection of initiatives aside from Silicon Valley . . . That is a pretty strong statement.” He also noted that several Israeli technology companies were on their way to being worth $1 billion.

 

Israel, with a population smaller than that of New York, has long punched above its weight in a variety of arenas—and there are reasons for that. Israel is surrounded by a mass of mostly hostile nations, many of which have tried repeatedly to defeat it. The country has had to fight—literally (and the word is used correctly here)—for its survival from its birth. It is also a Middle Eastern country without oil or an abundance of natural resources (though that somewhat changed with the discovery of the Leviathan and Tamar gas fields in the Mediterranean Sea, just off Israel’s coast). These factors have forced the nation to be innovative—in everything from the military to medicine. It is innovation born of scarcity.

 

And it is innovation that is now bearing ripe and timely fruit. According to Jonathan Medved, a serial entrepreneur and venture capitalist, as well as the founder and chief executive officer of the OurCrowd Global Investor Summit, “Israel high-tech is raising capital like nowhere else. Globally, venture-backed exits declined 26 percent in 2016. Israel, however, was the outlier—seeing record growth and a record year with $4.8 billion invested—up from $2.2 billion in 2013; 120 percent growth in three years.”

 

Medved is a large and imposing man. Gregarious and charming, he wore a kippah and a bushy beard at the summit. He spoke with a broad American accent. I asked him about the effect of the BDS campaign, which has sought to exert political—and especially economic—pressure on Israel, lobbying international firms to cease doing business with the country. It’s all the rage in Europe and the United States, especially amongst the youth. Isn’t this, I asked, a huge problem, for Israeli-American cooperation?

 

His reply was as swift as it was unequivocal. “Israeli business is not like Israeli politics,” he said. “In India, China, Japan, Israel is a top brand—BDS is important on college campuses, NGOs and some part of the church, but not in business. And the trend is an upward one. Ten years ago, there was a fear that Asian companies would not do business with Israel because of pressure from Arab states. That no longer exists.” He continued: “I was sitting at my Shabbos table with one of [the] top U.S. hedge fund managers and an Israeli MK—and I asked him about BDS. His response? ‘What is BDS?’” “Look,” he concluded: “Anyone with a brain cannot support BDS. If you do: get off Google, Facebook, your laptop, anything with an Intel chip.”

 

What does this boom in Israeli tech mean to the United States? The answer, according to David Goodtree, who sits on the Board of Directors of OurCrowd, is simple: it creates jobs; it creates wealth. He takes the state of Massachusetts as a case study. “There are over 200 Israeli-founded companies in the state alone,” he said. “In 2015 those companies brought $9 billion in revenue and $18 billion in economic impact to the state, representing almost 4 percent of its GDP. They also brought twenty-seven thousand jobs and $400–500 million dollars of venture capital.”

 

“Israeli companies drive the mass economy in the U.S.,” he continued. “Similar influence can be found in NYC and Florida. Last year, thirty state governors visited Israel, and they came for economic—not political—reasons.” The Florida Israel Business Accelerator is an example of how a U.S.-Israeli partnership is flourishing across the country. The initiative was set up via Israeli inroads into Massachusetts. Meanwhile, in Vermont, Plasan, an Israeli company that pioneers armor technology, is now among the state’s top employers—along with Ben and Jerry’s—with around one thousand, mostly local, employees. Plasan also has a $30 million plant in Walker, Michigan, to mass-produce carbon composite parts for an automotive customer and application. “This country is on fire in terms of innovation,” Medved told me with a wide grin. “People say it will run out of steam but it won’t—it’s about collaboration and Israel is coming to be seen as international hub. And it’s gaining momentum.”

 

The secret to the growing the Israeli-U.S. technology partnership is that each country brings its own unique skill that the other critically lacks. Israeli companies need to hire American talent to compensate for their areas of weakness. At the center of the partnership lies the ability to scale up. Israeli companies have the innovation—the research and the skills to create a great product, often a prototype. Unfortunately, those companies lack the know-how to make that product go “big” by producing it on a mass scale, an American specialty. This phenomenon is seen from the case of Rewalk, an Israeli technology designed to help paraplegics walk again. The product was exceptional, but Rewalk’s creators lacked the knowledge necessary to get the funding to produce it to scale or get FDA approval. Then an American firm stepped in. Technology from Israel combined with management experience from Boston: it was the perfect combination.

 

This scenario is replicated everywhere. Israel is the fastest innovator in the world. Israeli companies start in beta mode back home, shake the bugs out of their products there, get funding and customer testimonials before importing—mid-stage—companies to the United States. The United States then, rather than incubating its own companies and then facing the prospect of possibly watching them fail, gets the cream of the crop. The process is simple yet highly effective. About 80 percent of Israel’s technology companies are majority funded by North America through increased cash flow. U.S. money flows into Israeli companies that then go to the United States to set up shop, employ people and pay taxes, before they are eventually bought out by U.S. companies. It’s the definition of a virtuous circle…

[To Read the Full Article Click the Following Link—Ed.]

 

                                                                       

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    AN ECONOMIC POWERHOUSE AND A RISING HI-TECH SUPERPOWER –

25 YEARS OF DIPLOMATIC RELATIONS BETWEEN CHINA AND ISRAEL

                                                   Avi Luvton

                                                               Times of Israel, Mar. 23, 2017

 

This January, Israel and China marked 25 years of diplomatic relations. Israel was the first Middle Eastern country to recognize the People’s Republic of China in January 1950, but formal diplomatic relations were only established in January 1992. This move enabled cooperation in a variety of fields, peaking in recent years with joint activity in trade, tourism, healthcare, academia, technological R&D and more. Nevertheless, the great economic potential has yet to be fully realized. Today, trade between the countries stands at over $11 billion, of which only $3 billion come from exports.

 

China is perceived by many as the world’s center of manufacturing, but it is less often considered a center of innovation. We are used to thinking of “Made in China” but vary rarely think of “Designed in China” or “Invented in China.” This may have been true in the past, but China has been working energetically to become a central player in the global innovation ecosystem. Over the past several years, China has invested tremendous efforts in the field of innovation. This is evident in its investment in R&D as a percentage of GDP (2.1%), in research ($200 billion) and in human resources (30,000 PhDs in the sciences and in engineering), annually. This profound transformation in China from a production to an innovation powerhouse – has created an invaluable opportunity for Israeli hi-tech companies.

 

The Chinese government’s goal of turning the country into a global economic leader, in part by harnessing innovation to create a competitive edge in the international arena, has created a range of opportunities for Israel, itself a global innovation trailblazer. China is therefore of the utmost significance to Israeli industry and an important target market for technological exports and business cooperation in fields like cloud computing and big data, medical equipment, artificial intelligence, advanced automotive technologies, FinTech and more. China’s unique interest in Israel is evidenced by the dozens of delegations of senior government officials and businesspeople who have visited Israel in recent years. Representatives of large companies and private investors from China often arrive in Israel in an attempt to crack “the Israeli code,” to understand the local innovation ecosystem and to implement the innovative and entrepreneurial Israeli character into their own DNA.

 

Likewise, China’s involvement in Israel’s economy has grown over the past five years as evidenced in major M&A activity like the purchase of controlling shares in Makhteshim Agan by ChemChina in 2011, the purchase of Alma Lasers by Fosun Pharma in 2013, the sale of Tnuva in 2014 to China’s Bright Food and the acquisition of Ahava Cosmetics by Fosun in 2016. Growing Chinese investment in Israeli hi-tech is further evidence of this phenomenon. At the same time, the interest of Israeli companies in Asian markets, specifically the Chinese market, is growing as well. If in the past Israeli companies were primarily active in Western markets, today they look eastward to seek opportunities and expand their opportunities. This trend is not without its challenges: penetrating this giant market comes with numerous obstacles on the road to success.

 

The Israel Innovation Authority (formerly the Office of the Chief Scientist) has developed tools to help meet these challenges. The Authority offers eight unique funding programs to Israeli industry, in cooperation with the Chinese Ministries of Science and Technology. These programs help Israeli companies find a potential Chinese partner in innovative R&D, and spread the risk inherent in joint projects through Israeli and Chinese government grants…

[To Read the Full Article Click the Following Link—Ed.]    

                                                                           

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FROM TRAGEDY TO TECH: ISRAELIS AND RWANDANS

PARTNER TO BUILD THE ‘AFRICAN START-UP NATION’

Shterny Isseroff

Jerusalem Post, Mar. 18, 2017

 

With a modest population of 12 million, bordered by the Democratic Republic of the Congo to the west and Uganda to the north, Rwanda today is renowned for its green highlands, active volcanoes and rare silverback gorillas. In the 1990s, the narrative of the Rwandan people revolved around stories of political strife, genocide and war, but today it is one of the safest places in Africa for volunteers, tourists and entrepreneurs alike. Relative to its sub-Saharan neighbors, Rwanda is a small, landlocked country lacking valuable natural resources with a population that does not fit the criteria needed to support a labor-based economy. As a result, the country developed a culture of innovation and entrepreneurship, often teaching its students not to “find a job, but to create a job.”

 

At the geographical heart of Rwanda lies its capital Kigali, which has put its start-up scene at the center of its initiative to rebrand itself as a city of tech and creativity. Now two Israeli entrepreneurs, Hezi Bezalel and Guy Cherni, have tagged along for the ride. Their goal? To use all their hometown resources to help support the small African city on its journey to become the African Start-up Nation. “In a lot of aspects, they [Rwanda] are pretty similar to Israel; there is a great commonality that the two countries share,” explains Cherni, who has an MA in global community development from the Hebrew University and in 2012 was one of the first proponents of the Jerusalem start-up ecosystem. “Both grew out of a tragedy; Israel, in Europe, and Rwanda, with its genocide 21 years ago. This has created a link between us.”

 

Bezalel first arrived in Rwanda in July 1994, and has been taking part in the development of the country ever since through investments in fields such as infrastructure and telecom. During his frequent trips to the country, Bezalel, a Ramat Gan native specializing in banking and private equity, began to take notice of the city’s start-up potential. Through chance encounters, the two met and began brainstorming possibilities of what could be done to support the developing ecosystem in Kigali. But to have a real impact on the Rwandan ecosystem, they would first have to understand it – as locals. Next thing he knew, Cherni was on a flight to Rwanda to spend the next month mapping out the start-up ecosystem.

 

He began working on identifying the local resources that were available to the community to assess the key challenges Kigali’s tech scene had been facing. He spoke to everyone and anyone who could provide information, interviewing local entrepreneurs, government officials and existing companies in the region. His findings concluded that there was a thriving local tech scene, including co-working spaces, academic initiatives, and active stakeholders – yet almost no link between them. A start-up ecosystem, according to Startup Commons, is formed by people, startups in their various stages and various types of organizations in a location (physical and/or virtual), interacting as a system to create new start-up companies. “We realized what was missing was an incubator, investments and a way to connect them. Based on this, we decided to build an incubator, invest in some later- stage companies, and work on creating connections between the different parts of the ecosystem,” Cherni explains.

 

Interestingly, his observations in Kigali were quite similar to his experiences when first arriving on the Jerusalem hi-tech scene seven years ago. All ingredients for a successful ecosystem were there but not working collectively with one another. At the time, this led to the creation of Jerusalem’s first start-up accelerator program, Siftech, a grassroots project of the Hebrew University Student Union that is now preparing for its sixth batch of start-ups. Today, the 42Kura project is the outcome of all their planning. Starting its new program this month, 42Kura will accept 10 early-stage start-ups and provide them with Israeli and Rwandan expertise, mentorship and support…

[To Read the Full Article Click the Following Link—Ed.]

 

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On Topic Links

 

Israel Aims to Become World’s 15th Largest Economy by 2025 — Minister: Raphael Ahren, Times of Israel, Mar. 19, 2017—Israel aspires to become the world’s 15th largest economy by 2025, Economy and Industry Minister Eli Cohen said Sunday, arguing that Israel’s power depends on its economic growth.

The Sky is the Limit for China and Israel: Meir Javedanfar, CGTN, Mar. 20, 2017—Looking at the current levels of bilateral trade between Israel and China, it is difficult to believe that the two countries only established diplomatic relations 25 years ago.

Tech Talk: Israeli Satellite to be Launched into Space: Ariel Shapira, Jerusalem Post, Mar. 14, 2017—Duchifat-2, a small satellite built at the science center in Herzliya with the active participation of high-school students, will be launched on the morning March 20 from Cape Canaveral, Florida, toward the international space center along with 28 other small satellites from around the world. The aim of the constellation of satellites will be to map the thermosphere, which will help in the transfer of GPS signals.

Trump, China, and the Middle East: Roie Yellinek, BESA, Feb. 7, 2017—Ever since Donald Trump won the US presidential race, the issue of US-China relations has been high on the agenda of both parties. The subject preoccupies the president more than Islamic terror, Vladimir Putin, and other more pressing issues facing the world.