HEALTH & LIFE SCIENCES
The Israeli Life Science Industry is rapidly growing, playing an important role in the world healthcare market. Israel’s life sciences industry and its commercial successes are propelled by a strong collaboration with academic research and government support and funding. Currently, over 1300 Israeli companies are leading worldwide innovation in the fields of medical devices, bio-informatics, medical technology, equipment, and imaging. Continuous, year-over-year, successful performance in the Israeli Life Science sector has attracted the attention of the worldwide markets. Israeli companies are responsible for some of the most important recent innovations in the field. Given Imaging, for example, pioneered capsule endoscopy technology, commonly known as the “PillCam”, which is currently used to detect gastrointestinal disorders in over 60 countries worldwide. More recently, companies like Zebra Medical are using artificial intelligence and medical imaging to help radiologists correctly detect and predict abnormalities.
WATER & AGRITECH
Israeli water technology has a global impact, represented by 50% of the world’s low pressure irrigation systems and over 350 desalinization plants in 40 countries. Israel has made wastewater treatment a primary concern; Israel is currently one of the world leaders in wastewater collection, treatment, and reuse, and is partnering with organizations across the globe to share its knowhow. It is also a leader in developing new methods for crop cultivation and irrigation in arid regions. The collaboration between Israeli agricultural research, farmers and extensions services has been one of the keys to Israel’s success. Global players in Israel are driving innovation in biological purification, in extracting drinking water from air, IoT systems for water utilities and more.
Global exposure, corporate collaboration, and extensive experience in security IT help power 480 Fintech companies in Israel. Israeli startups are easing payment processes, reducing fraud, saving users’ money, promoting financial planning, and ultimately pushing the global fintech industry forward. The most recent innovation involves the application of Artificial Intelligence – machine learning, deep learning, and neural networks – to existing fintech solutions. KPMG’s most recent annual “Fintech100” survey of the leading fintech companies across the globe includes 9 companies from Israel, including Lemonade, PayKey and Zoos.
Israel is a global hub for cybersecurity innovation, second only to the United States, with a sector that is estimated to represent 10% of global sales and 20% of global investments. Israel has five academic cybersecurity research centers, and nearly 20 international corporate cybersecurity facilities. Antivirus software developed in Israel protects one in six computers worldwide; from firewall protection to fraud detection and threat monitoring. The recent 2017 rankings of the “cybersecurity 500,” published annually by Cybersecurity Ventures, features 36 companies with headquarters in Israel. Given that several companies now headquartered in the US were originally founded in Israel, the Israeli impact is even larger. CyberArk, Checkpoint, and Checkmarks round out the top three Israeli companies on the list.
SPACE & AVIATION
Israel is one of only seven countries in the world, and the smallest, that has local space-launching capabilities. The Israel Space Agency (ISA), along with the Israel Aerospace Industry and Space IL, are responsible for pursuing continued innovation in the fields of space exploration, aviation technology, and drone technology. These three agencies, along with numerous academic and professional associations, are bringing aviation technology to the global forefront. Recent initiatives include the world’s first ever cyber-aviation innovation center, developed through a partnership between Tel Aviv University and the International Air Transport Association (IATA). In mid-2017, Israel, France and Italy launched the exploration satellite Venus (Vegetation and Environment monitoring on a New Micro-Satellite), through the European Vega launcher. The satellite was built by Israel Aerospace Industries with all Israeli-made components and is the world’s smallest satellite of its kind. Israeli-made vests for protection against radiation are set to be tested by NASA in the 2019 AstroRad mission.
ICT (Information and Communications Technology)
According to the World Economic Forum, Israel is an ICT “Powerhouse” of innovation, with over 800 companies powering the sector. Israeli ICT exports grew by over 25% in the last four years, to over 23 billion USD. ICT services constitute over 60% of its service export. Leading Israeli multinationals like Amdocs, Comverse, and Mellanox have all established global leadership positions in their respective niches in ICT. In addition, several prominent startups are pushing the latest innovations in the field of communication. Over the past decade, hundreds of leading Israeli ICT firms have been acquired, a testament to the strength of Israel’s ICT sector.
INVESTMENT AND BUSINESS OPPORTUNITIES
In recent decades, Israel has emerged as a preeminent destination for investment and business development encouraged in part through the establishment of regulatory cooperation, appropriate incentives, and financial security to protect equity stakes. Israeli high-tech firms raised a record breaking 5.1 billion USD in 2017, an increase of 22% from 2016. The average financing round, which has grown consistently over the past six years, reached 8.5 million USD in 2017. Exits, both M&A and IPOs, from the Israeli high-tech sector alone garnered over 23 billion USD in revenue in 2017. The average revenue from each exit has climbed to 106 million USD in 2017, a 110% increase from 2016. There are nearly 300 recognized investing entities in Israel; 30% of these entities are international, including foreign venture capital firms, private equity firms, and corporate investing entities, all whom invest directly in Israeli technology.
RESEARCH AND DEVELOPMENT
Creativity, technological prowess and the famous Israeli “chutzpah,” together with robust public and private support for research and development created the perfect storm for the startup ecosystem in Israel – also known also as the “Startup Nation” and “Silicon Wadi.” Whether it’s IoT, machine learning and neural networks, drones, cyber or virtual reality, Israeli companies, academic institutions, and R&D powerhouses deliver cutting-edge technologies on a global scale. Today Israel boasts a dozen Nobel Laureates, including six in chemistry. Israel also has the fourth highest number of companies listed on NASDAQ (after the US, Canada and China), with 94 companies listed as of 2018. Israel is the only country in the Middle East with companies traded on NASDAQ. Leading multinationals like Intel, Google, Microsoft, Motorola and Facebook, as well as top-tier venture capital firms like Sequoia, Bessemer, and LightSpeed have all established offices in Israel. Frequently, employees of these multinationals also form their own ventures.
A TRADITION OF INNOVATION
In many ways, modern-day Israel itself is a startup – a country that emerged from the desert sands without natural resources, facing turmoil and conflicts – to beat the odds and become an unprecedented global leader in innovation. Israel’s entrepreneurial spirit is rooted in its history of overcoming obstacles, and today it is home to myriad pioneering startups, backed by robust public-sector support, strategic partnerships, and extensive domestic and international investment. Israeli innovators today are pushing the technological envelope in practically every sector, including cyber, MedTech, autonomous driving, energy, machine learning, aggrotech, drones, aerospace and more. The innovation ecosystem in Israel is a “virtuous circle” that looks outward to solve global problems with vision and tenacity. Over 8% of the workforce in Israel is employed in the high-tech sector, as compared to just over 2% in Europe. In addition, women represent over 36% of all high-tech employees in Israel, as compared to 32% in Europe. There are over 7,000 startups throughout the country and some 1,000 operating in Tel Aviv alone. Reflecting on Israel’s creative energy, former Prime Minister and Nobel Laureate Shimon Peres remarked that, “In Israel, a land lacking in natural resources, we learned to appreciate our greatest national advantage: our minds. Through creativity and innovation, we transformed barren deserts into flourishing fields and pioneered new frontiers in science and technology.”
In Israel, military service is mandatory from 18 to 21 years old. There are multiple intelligence units that create tech experts, cyber experts and hackers like nowhere else. For instance, 8200 is the supreme IDF intelligence information unit and 81 focuses on supplying the newest technology to Israeli combat soldiers. The culture and educational methodology there is exceptional:
“There’s nobody around to tell you how to do it. “The culture inside–and it’s by design–is that your superiors just tell you to go figure it out. That gives you the huge freedom to think differently. It’s you or nobody else. And when you’re an entrepreneur, that’s the most important skill. When you do 5 or 10 or 20 of those projects, you’ve just built 3 things that could be a start-up.” Avishay Abrahami, Founder of Wix.
When we assume that most of the technological innovation that we know today such as GPS or the internet are coming out of the US army, we can imagine how Israel’s military contributes to the Innovation Secret. More than 1,000 companies have been founded by 8200 alumni, from Waze to Check Point to Mirabilis, the parent company of ICQ.. and 90% of the intelligence material in Israel comes from 8200 according Forbes.