The Australian business and investment community currently has an opportunity to become more closely connected with Israel, a country which is now among the world’s most innovative, dynamic economies.
While Australia can do more to link with Israel there is no doubt many other regions understand the investment and innovation possibilities in this small Mediterranean nation – they see a modern Israel which has transformed from being an agricultural, “kibbutz collective” economy to one now being colloquially referred to as “Start-up Nation” or “Silicon Wadi” and taking a lead in areas such as cybersecurity, autonomous vehicles and AI.
In many ways, Israel complements Australia perfectly thanks to its tech, innovation and start-up prowess.
To understand how Israel’s technology sector has flourished during the last decade consider that Israel now has the largest number of start-ups and NASDAQ-listed companies outside North America.
Aside from technology, Israel has built a reputation as a leading nation in financial services, pharmaceuticals, defence, healthcare, clean energy, crowdfunding start-ups and a range of industries.
Israel’s economy is stable and growing, with a highly regarded central bank. The country has shown an ability to establish long-term economic plans and has a reputation for seeing them through – programs developed in the mid-1980s controlled inflation and produced rapid growth throughout the 1990s, which has led to the economy we see today.
Israel has the ambition to become the world’s 15th largest economy by 2025, according to an announcement by Economy and Industry Minister Eli Cohen.
Many foreign investors are seeing Israel’s potential, including Warren Buffett, who chose Israel as the locale for his first major acquisition outside of the USA. Other large global funds look to Israel for opportunities beyond Silicon Valley, NYC and Boston.
Consider some key reasons why global investors are increasingly becoming connected to Israel, and why it’s now time for Australia to act:
Big deals are being done, including a history-making deal in 2017, which saw Intel pay $15.3 billion for autonomous driving technology firm Mobileye: Intel is establishing this as its global autonomous driving hub and R&D centre.
Other notable deals since the beginning of the decade include:
- the 2012 acquisition of Waze by Google for over $1 billion
- the 2013 sale of security software firm Trusteer to IBM for $1 billion and
- Cisco’s 2013 takeover of cell phone software firm Intucell for $475 million.
Israel is now established as a global tech hub. Its technology sector is dense and includes “deep technology” abilities with broad application – examples include medical technology, AI, machine learning, robotics, cybersecurity & digital health, cars and software – navigation, autonomous driving. Many of these are cutting edge tech sectors which could deliver huge benefits to Australia.
Israel’s technology hub status should not surprise when you consider the innovation culture Israel has developed over decades. This tiny nation has had to innovate to grow and flourish against some formidable geographical and geopolitical challenges – Israel has long been a leader in water and agriculture, the drone and aerospace industry, and solar power.
More international firms are looking to Israel for R&D: over 300 international firms have high-tech research centres in Israel, including Microsoft, IBM, Apple, HP, and Cisco. Facebook’s second-largest R&D centre is based in Israel. Foreign R&D centres are exploring possibilities in chemicals, industrial machinery, communication equipment, scientific instruments, medical devices, flash memory storage equipment, computer hardware components, software, semiconductors and internet.
Israel is among the global leaders in crowdfunding – an industry which has struggled to get off the ground in Australia.
There is plenty for Australia to offer Israel too, and there are compelling arguments for greater knowledge sharing between Australia and Israel. By forging closer business ties Australia too can benefit from the connections, investment and business deals available in Israel.
How can Australia be better positioned for closer business and economic ties with Israel?
- See this “second Silicon Valley” first hand
- Interact with those leading innovations and start-ups in Israel
- Make connections within the investment, business and political communities
- Share information and knowledge with others
Harry New is travelling to Israel as part of the CVS Lane Australia Israel Chamber of Commerce Trade Mission during May 2018