By: Arunas Karlonas, Commercial attache of Lithuania to Israel
Undoubtedly, the Israelis are the most successful innovation creators in the world. Where does the secret of a state with a large part of its territory covered by desert and with rather unfriendly neighbors lie? Why the country of 9 million people boasts more than 6.500 startups, 7.6 percent of its workforce is engaged in Hi-Tech and it generates 13 % of GDP with 38 % of export volumes? Why is Israel not a market but rather a gateway to global markets with more than 370 multinational companies operating there? What is the secret of Israeli innovation success?
The answers to those questions were provided during the Mission: Innovation 2020. This intensive session for European diplomats was organized by the European Institute of Innovation and Technology (EIT) Hub in Tel Aviv together with Innovation Without Borders (IWB). At the mission, we had a chance to meet the key stakeholders, including government experts, tech entrepreneurs, representatives from multinational companies, VCs, etc. We had a unique possibility to learn the ways the Israelis create and develop innovative products and services, establish connections in the ecosystem, jointly develop technologies and projects.
Representatives from Cyprus, Germany, Greece, the Czech Republic, the Netherlands, Belgium, Austria, Lithuania, Sweden, and the EU Delegation had the opportunity to participate in this Mission.
Israel‘s innovative thinking is an extremely complex recipe but following the discussions with Start-Up National Central, 8200 Alumni, Israeli Innovation Authority, Israeli Export Institute, Technion, and business representatives from Quedma Innovation, Deloitte, Road2, SAP, Enel, Volkswagen group, and others, we found out what the secret ingredient is. It is their courage to take risks, to fail, and to start again. This is in their blood.
In this regard, I would like to point out the key elements of why the Israelis are very innovative and respond to challenges so successfully:
- Desire to be safe and independent
Many Israelis seek to work independently and be self-supporting. They set up businesses alone or in groups and if they fail with what they do they keep starting from scratch again. They understand that failure is no punishment but rather an opportunity to learn from the mistakes made and so they keep moving again. I suppose that the ‘everything will be fine’ formula is deeply rooted in their minds. Israel is unique in its cultural environment, in fact, it is the cradle of cultures where Jews and Arabs coming from Europe, America, the former Soviet Union, and elsewhere complement each other and make a stimulus to create something new.
Israel ambassador Dani Dayan very well reflected on the Israelis’ ability to achieve this most remarkable success in entrepreneurship and innovation “I think that Israeli men and women really dream of being the next Bill Gates or to found the next Google or Microsoft“
Another important aspect is that the very specific geographical and geopolitical situation determines the wish of every resident of Israel to be safe, strong, and independent. Israel is situated in a region with very few friendly states so the people of this country must always be vigilant and watchful for alerts. Protecting the country means protecting yourself. This tense geopolitical situation provides a powerful stimulus for the development of new border and air protection, urban surveillance systems, air, water, and food security technologies. The feeling of personal insecurity is the best driver for being ahead and creating something new and innovative.
- Israeli Defence Forces: the school of innovation
At the meetings with Israeli entrepreneurs and founders of technology companies, we found out that lots of them have ‘graduated’ from the IDF school, mostly from the elite Unit 8200, the biggest and most sophisticated unit in the Army.
As representatives from the 8200 Alumni organization mentioned, for the Israelis, the army is the school where they learn to be an interpreter, engineer, programmer, constructor. This valuable education enables them to use their precious knowledge and skills gained for designing and developing new inventions. A good example that illustrates how the Army promotes innovation is presented at the Peres Center for Peace and Innovation. The story is about a military man, who worked with precise missiles and used his knowledge to invent a capsule to be used in endoscopy; so it is the miniature camera in a pill designed to take photos while traveling through the gastrointestinal tracts.
So in Israel, military service is a substantial step in every civilian’s life.
- Attention to R&D
The Government of Israel pays huge attention and provided considerable fundings to R&D. Israeli scientists and researchers are among the best ones in a world. Israel is ranked #1 in private R&D expenditure as a percentage of GDP was about 4.3 % (as of 2016), of which 84 % comes from the private sector, which is the highest indicator among the OECD countries reflecting the prospering innovation ecosystem of the private sector. Israel is also ranked #2 at the Innovation Index of the Global Financial Forum (Global Competitiveness Report, 2016-2017) that includes parameters such as scientific research institutions, R&D expenditures of the business sector, cooperation between the academia and industry, the pool of scientists and engineers and the number of patents in ratio to the size of the population.
The Israel Innovation Authority promoting international cooperation in R&D of significant technological innovation supports bilateral R&D programs based on government-to-government international agreements and implementation agreements between government agencies and regional authorities. These programs allow the sharing of risk inherent in project funding as well as offer assistance in finding technology and business partners. Israel is the first in the world for business investment in R&D as a percentage from GDP. This provides the answer to why Israel is home to more than 350 R&D centers of some of the world’s largest multinational corporations, such as Microsoft, Apple, and Google.
Obviously, it would be difficult to copy and reproduce all this in other countries. Because each country is unique in its own way; yet, we can definitely learn from Israel’s courage to create and to be not afraid of making mistakes.