As policymakers search for ways to foster more innovative economies, many are turning to Israel for answers. Over the course of my tenure as ambassador, the embassy has made it a priority to present Israel to Canada as a partner in innovation.
With a population of 7.8 million and a territory two-thirds the size of Vancouver Island, what Israel lacks in size and natural resources, it more than makes up for in ingenuity. The Israeli experience has cultivated citizens who think outside the box, striving to find creative solutions. Israel is a leader in the fields that are beginning to define the 21st Century: brain research, nanotechnology, renewable energy, water management and biotechnology.
During President Shimon Peres’ visit to Ottawa last May, innovation was at the top of the agenda. Gov.-Gen. David Johnston praised Israel as the startup nation: “a place where entrepreneurs with big ideas can find a supportive environment in which to build a business.” Its reputation is not just reflected in accolades, but can also be identified by its standing at the top of many global indicators.
Recently, the Global Innovation Index, issued annually by the World Intellectual Property Organization (WIPO), ranked Israel as the best country for research and development and first in the world for the quality of its scientific research institutions. However, Israel was not always in such an enviable position. During the mid-1980s, the economy faced crippling inflation and economic stagnation. Unemployment was at an all-time high, skilled workers were leaving for jobs abroad and a general sense of unease was in the air.
All of this changed in a span of just a few years.
Between 1985 and 2011, Israel’s GDP per capita grew by an astonishing 423 percent from $6,171 to $32, 298 (Israel Export & International Cooperation Institute, 2012). Even when you adjust for inflation, this rapid economic growth is still impressive and unparalleled. Unlike other examples of economic turnarounds and miraculous expansion, this was not a result of new discoveries of natural resources. What allowed Israel to catapult its economy was the decision by policymakers to make a national priority of innovation, entrepreneurship and the commercialization of knowledge.
Explaining this economic success story has been the purview of many doctoral theses and lengthy reports by global think-tanks. For instance, the Canadian Advanced Technology Alliance recently teamed up with billionaire Terence Matthews to call for a national venture capital program modelled after Israel’s Yozma initiative. Created in 1993, Yozma helped to establish 10 new Venture Capital funds of about $20 million with each one capitalized 40 percent by government money and 60 percent by foreign investment. This allowed for an environment that encouraged entrepreneurship and a willingness to take chances on new ideas. Nevertheless, one element, by itself, does not tell the whole story.
When Israel’s chief scientist, Avi Hasson, was in Ottawa this past July, he explained that the Israeli advantage of excellence and initiative is a result of a complex innovation ecosystem — a network of researchers, R&D centres, incubators, entrepreneurs, venture capital, industry and a legal framework that protects intellectual property rights. David Naylor, president of the University of Toronto, used a hockey metaphor to describe what drives this network: “Like a good hockey team, [Israelis are] playing a shots-on-goal game … They’re building a pipeline to churn out hundreds of new ideas … knowing that only a few will ever fly in global markets.”
At the heart of this innovation network is a highly skilled workforce. A 2011 OECD report ranked Israelis right after Canadians as the most educated people in the world. Israel also ranks first in scientific journal articles per capita, first in the availability of qualified engineers, and first in PhDs per capita. Combining a highly skilled workforce with the other key components of the innovation network has turned this tiny country — 50 percent of which is a desert — into a magnet for R&D. More than 240 high-tech multinationals have set up research centres that employ more than 50,000 people. The list reads as a “who’s who” of the high-tech industry whose ticker symbols are found at the top of every stock index and whose products are found throughout your home and office. From Intel to Cisco and Microsoft to Google, everyone is setting up shop. Recently, Apple located its first research centre outside of the United States in Israel.
In these times of financial turmoil and volatility, Israel is not resting on its laurels. This brings the discussion back to the role of the embassy. Israel is in the process of expanding its innovation ecosystem beyond its borders and Canada is a priority. This past summer, we witnessed the fruits of some of these efforts with the launch of the Canada-Israel Technology Innovation Partnership. Funded by Israel’s Office of the Chief Scientist and the National Research Council of Canada, it supports joint projects and marks Canada’s first initiative under EUREKA — a collaborative European network for market-based R&D.
This partnership was the culmination of a process that began two years earlier when prime ministers Harper and Netanyahu identified three important areas of co-operation: renewable energy, water technology and brain research. We also have the Canada-Israel Industrial Research & Development Foundation that has generated an estimated $400 million for Canadian companies over the last 10 years. Since it was established in 1994, it has engaged more than 160 Canadian and Israeli companies in 90 joint projects.
By connecting researchers and business leaders from both countries, these partnership programs have and will continue to reap mutually beneficial results. They also provide the groundwork for greater collaboration in more sectors and on other levels. A bright future lies ahead with Canada and Israel standing side by side as partners in innovation.
Miriam Ziv is Israel’s ambassador to Canada.
