News on Israel often concerns the Palestinian issue, but this small country, which places much emphasis on the development of cutting-edge technologies, has pulled off a lot of phenomenal technological achievements largely overlooked by global media.
In recent years Israel’s tech industry has undergone rapid growth, turning the country into an international hub for tech start-ups.
High-tech industries now account for 12.5 percent of its GDP, and their products represent almost half of the country’s exports.
Moreover, Israel is currently spending 4.3 percent of its GDP on research and development, taking the lead among OECD members.
While some might attribute Israel’s success in nurturing its hi-tech industry to the long-standing Jewish culture of encouraging innovation, individualism and entrepreneurship, one must not overlook the role of the Israeli government in the entire process.
In fact, the Israeli government has proven instrumental in facilitating the rapid growth of the industry.
As early as 1973 the Israeli government already set up the Office of the Chief Scientist (OCS) to oversee the country’s industrial development strategy.
Back in the ’90s the OCS first launched six “incubator projects” to cultivate tech start-ups by providing them with funding, financing and management advice. The number of these incubator projects has now increased to 24.
World-renowned for its high-tech innovation and ingenuity, the Israeli defense industry has also proven a cradle of young tech entrepreneurs.
Many of the country’s successful tech entrepreneurs had worked in the defense industry, where they acquired the necessary IT knowledge before they founded their own companies.
Also, the hundreds of thousands of Jewish scientists and technicians who fled the former Soviet Union following its disintegration and emigrated to Israel in the early ’90s have also played a pivotal role in building the country into a global high-tech center.
Realizing the immense potential for growth of the Israeli high-tech industry, tech giants such as Google, Apple and Intel are now working aggressively to seek partners or even acquire new companies in Israel.
Even Chinese investors such as the China Everbright, Ping An Insurance, Lenovo and QIHU 360 are trying to get a slice of the market by establishing venture capital funds targeting tech start-ups in Israel.
In fact, cooperation between China and Israel is mutually beneficial: China can provide huge capital and a vast market for Israel, while Israel can act as a window through which China can have access to the latest western technologies that it is eagerly after.
Besides, by intensifying cooperation with Israel, China can also dilute US influence in the region.
China is trying to kill two birds with one stone.
This article appeared in the Hong Kong Economic Journal on March 9.
Translation by Alan Lee
[Chinese version 中文版]
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