ISRAEL INNOVATION NATION Israel INNOVATION NATION SECTION I Report in Foreign Affairs magazine, September-October 2014...................................... pages 1-3 SECTION II Extended report available online at www.countrystrategic.com............................................. pages 5-21 Sponsored Section INNOVATION NATION Company Highlight ISRAEL StraUSS’ mISSION In the past twenty-years, Israel has “In Israel, we have our own DNA of earned the nickname “start-up nation” policy innovation” explains the Ministry TURNINg ISRAEL exporting solutions to global human of Economy’s Chief Scientist, Avi into THE fOODtecH challenges in the field of water and Hasson. His office supervises twenty nation food technologies, healthcare and life incubators for early stage projects. Along- Started in 1936 with two cows in sciences, ICT, cybersecurity and en- side private venture capital, Israel provides Northern Israel, the Strauss Group ergy. Since the state was established in its entrepreneurs with the necessary has grown to become a significant 1948, kibbutz and moshav (communal backing to turn their innovative ideas into global player. Ofra Strauss, third and cooperative agricultural commu- profitable businesses. The country has the generation to lead the company, nities), then state companies and start- highest density of start-ups per capita, and the head of the Israel-US ups have led the way. which aim high and global with more Is- Chamber of Commerce, explains raeli companies listed on the NASDAQ the recipe for her group’s national than the entire European continent. and international success: carefully Harel Locker, Director General of selected partners and an insatiable the Prime Minister’s Office, wants quest for better products. Israel to further open to the world. In “The encounter of several companies Locker’s words: “We help foreign inves- into one mission creates innovation, tors and companies that come to Israel creativity and an added value to remove any barriers”. Supported by these consumers,” she notes. Today, the regulations, almost half of the world’s top Group is in numerous international technology companies have bought start- partnerships with agro-industry and ups or opened R&D centers in the coun- appliance giants such as PepsiCo, Kibbutz Sdot Yam’s engineered stone try—200 of them from the U.S., such as Danone and Haier, in products surface company, Caesarstone, is an ex- IBM, Cisco and Intel, and more recently ranging from candies to fresh food, ample of kibbutz perpetually renewing Apple and Facebook. dairies and water appliances. Thanks their range of activity. to these alliances, Strauss Group has Here: Calacatta Nuvo, latest design from become the world’s first hummus Caesarstone producer together with PepsiCo through their brand Sabra. It is also Dan Senor and Saul Singer, in their the fourth largest producer of coffee eponymous book, explained it is all at the global scale. about creating the right innovation eco- system, which drives the remarkable A leading company at home, Strauss economic performances of the country. Group wants to take its mission Growth projection for 2014 is pegged further. It recently launched Alpha at 3.4—Israeli performance will exceed Strauss, an open platform to register that of OECD’s other members. Israel-developed food technology, Israel, a world leader in life sciences in an effort to turn the country into High tech products account for half of technology, has the world’s highest number the foodtech nation. Strauss, bank- industrial exports from Israel. Investing of patents per capita in the medical device ing on the country’s innovative po- the highest ratio of GDP into R&D Isra- area, as illustrated by pioneer Insightec, tential, explains: “The world doesn’t el is the world’s second most educated leading the therapeutic use of ultrasound have enough food or enough water. country after Canada. The engrained technology. We want investors and multina- quest for perfection and the local sense Here: Physician and patient during ExAblate tional companies to look to Israeli of chutzpah—audacity—create a partic- Neuro treatment technology in the food sector.” ularly competitive business culture. Strauss Group has sufficient le- verage to take game-changing Read more innovations to the global stage. ¾ Shimon Peres: Extended interview of Shimon Peres Thanks to the Group’s interna- ¾ Oil & Gas: How the new discoveries will benefit Israel tional network, they will have im- ¾ Cybersecurity: Be’er Sheva, the world’s cybersecurity hub mediate access to global markets, ¾ Start-Up Region: Thinking regional thus tackling a pressing 21st cen- www.countrystrategic.com/Israel2014 tury issue challenge. 1 Sponsored Section PREPARING FOR TOMORROW AN IntervieW WITH SHIMON PERES The history of Israel coincides to a great degree with Shimon Peres’ own biography. Ever since Israel was born, the country’s immediate former president, 91, has pushed the country along the path of innovation. How has Israel become one of the world’s most in- novative and entrepreneurial economies? When Israel was started, the land we got was unfertile. We thus © Ouria Tadmor had to use technology. The need for weapons brought us to ‘real’ will know Israel is not their problem. If Israel helps without high tech, of which Ben Gurion put me in charge. My friend Al fanfare, we can contribute. Schwimmer, came from the US to help with this work. In spite “Concretely, we must move from the start-up of the failure the experts predicted then, our chutzpah helped us. nation to a start-up region.” What will be the impact of scientific innovation on tomorrow’s world? How can scientific development contribute to peace Tomorrow is already here but we think as we did yester- and stability in the region? day, ignoring reality. We have to adapt ourselves to a new For fifty years, poverty has been growing in the Middle East. age where competition, not wars, will take over. We have an People are overusing natural resources. The only thing we alternative way to government for governing: global compa- can do it is to improve quality of life. We must also ensure nies. Global companies do not have any force or power. It is men and women have equal rights. Concretely, we must a new sort of democracy, without delegation. They will be move from the start-up nation to a start-up region. Israel in charge of the future investing in innovation and research. has 13,000 start-ups involving 60,000 students. Everything will evolve around individuals. I suggest we open initiatives encouraging entrepreneurial ventures to Arab universities. Sixty percent of the 350 million “We have to adapt ourselves to a new age where Arabs living in this region are below the age of 26. One hun- competition, not wars, will take over.” dred million of them are connected to the Internet. Israel can How would you like to see Israel in the next few years? contribute indirectly to have all the youngsters connected. We must understand the decision-making processes in our Having completed your term, and as a “dissatisfied own brains. The brain is the most illustrious instrument that optimist,” what is next? exists. Israel must lead brain research. We live on our brain My dream is to help the region to escape poverty and more than our land. terror. I will do this working with multinational compa- Israel shall continue to prefer the moral code to any other nies. I want to create a sort of matchmaking Scan here for attraction on earth; values must come before power and bringing companies and people together. full interview wealth. If we overcome the difficulties in negotiations, Arabs This interview has been edited and condensed. Water TECHnoloGY Israel SETTING THE GloBAL PACE Israel’s founder and first Prime Minister, David Ben Gurion, 2016. Felber explains that when it comes to cherished the dream of a blossoming Negev desert. Ever water solutions the US is lagging behind: “U.S. companies can since, water technology has been top priority in a land that is learn from us in the fields of desalination, water treatment, and 60 percent arid. Watec Israel 2013 Chairman and former Wa- sophisticated water treatment solutions for complex projects”. ter Commissioner, Shimon Tal, refers to Israel as the “water Israeli technologies are also providing top-quality drink- solutions hub.” Technologies such as the desalination of sea- ing tap water in the home. Strauss Group, Israel’s second- water, reclamation of treated sewage “U.S. companies can learn from us in the fields of largest food group, is develop- for agriculture, early-warning meth- desalination, water treatment, and sophisticated ing patents for unique point of ods to detect leaks and computerized water treatment solutions for complex projects”. use water purification solutions drip irrigation, allow 80 percent of all available globally, and distributed water used in Israel to be recycled Avshalom Felber, CEO, IDE Technologies through joint ventures with Virgin and reused. Spain, the second biggest recycler of water by and appliance producer Haier, with products delivered in comparison, only reuses about one quarter of its water. the Israeli, European and Chinese markets. Ofra Strauss, Avshalom Felber, CEO of IDE Technologies, stresses that Chairwoman of the Group, reveals that the purification the water scarcity problem revolves around three angles: wa- technology is based on gravity, enabling its use in develop- ter conservation, water re-use and water desalination. IDE is ing countries with unreliable electricity sources. She guar- currently building the largest seawater desalination plant in the antees, “safety is inherent within this machine”. Thanks to Western Hemisphere, located north of San Diego in Carlsbad. this technology, “even if there is no electricity, and no water This US$1 billion dollar project has been developed with local pressure, one can get purified water,” thus suiting both partners to deliver 50 million gallons of water a day by early developed and developing markets.