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DEEP NEWS ANALYSIS

INNOVATION LESSONS FROM

ISRAEL
09.12.2019

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 Innovation lessons from Israel
Why in News
● When the Global Innovation Index ranking was announced in July,
the expectations were high. India, many believed, would break into the top
50 leagues for the first time.
● India ranked 52 among 130-odd economies.
● Its performance was commended as it topped the Central and South
Asian region for the ninth consecutive year and its growth from 81st rank
in 2015 to 52nd this year — is the fastest by any major economy.
● Israel converted its challenges into competitive advantages, exhibiting
its intellectual prowess.

Background
Global Innovation Index 2019
➢ This is the first time that the GII is being launched in an emerging
economy.
➢ The Department for Promotion of Industry and Internal Trade (DPIIT)
of Ministry of Commerce and Industry, Government of India, World
Intellectual Property Organisation (WIPO) and Confederation of Indian
Industry (CII) are co-hosting the event.
➢ Switzerland tops the GII index followed by Sweden, United States of
America, Netherlands, United Kingdom, Finland, Denmark, Singapore,
Germany and Israel.
➢ It is published annually by Cornell University, INSEAD and the UN
World Intellectual Property Organization (WIPO).
➢ India stands out in the world’s top science and technology clusters,
with Bengaluru, Mumbai, and New Delhi featuring among the top 100
global clusters
Why Israel become the superstar?
➢ The biggest news from the 2019 rankings was Israel breaking into the
top 10 list.
➢ Israel is the first by any country from the Northern Africa and West
Asia regions.
Focus on Education
➢ Today, Israel spends 7 percent of its GDP on education. Over 45
percent of its adults' complete tertiary education.
➢ Its investment in R&D is the highest in the world (4.2 percent of its
GDP) with a third of that going into universities.
➢ Israeli universities, today, top in patent applications in the US.
➢ Such is the quality of manpower that Israeli colleges produce, over
250 global companies including the likes of Facebook, Google, Apple, HP
and Microsoft have set up their R&D labs in the country which also boasts
one of the highest concentrations of Nobel laureates on earth.
➢ Israel has the largest number of hi-tech startups per capita than any
other country in the world.
➢ Tel Aviv houses the second largest startup ecosystem after Silicon
Valley.
➢ The hi-tech exports account for 45 percent of its overall exports. Its
Yozma venture funding plan and technological incubator programme are
case studies across the world.
➢ Israel has become a leader in desert agriculture due to drip irrigation
and precision farming.
➢ The startups have indeed solved the country’s pressing problems.
Focus on Culture
➢ Jews are natural risk-takers, an essential quality to become an
entrepreneur.
➢ Faced with adversities, Israelis are never happy with the status quo
and constantly try to improve things. This has given birth to a trait they
call ‘chutzpah’. Failure is accepted in society and a person is encouraged to
try again.
Focus on Security and Technology
➢ To tackle the security issue that comes from being surrounded by
enemies and constantly fighting terrorism, the country invested heavily in
cutting-edge technologies. Today, the Israeli military is a national incubator
and a significant catalyst for innovation. Stories about the famed
Intelligence Corps Unit 8200 is legendary.
➢ With compulsory conscription, every youth, based on talent and
aptitude, gets exposed to the latest technology that the military uses.
➢ They are taught to work as a team, solve problems in a structured
and disciplined manner.
➢ These qualities help them to come out and build successful
enterprises. Check Point, the world’s largest cybersecurity company, is one
such organisation.
➢ In fact, Israel controls as much as 10 percent of the global
cybersecurity market.
➢ Then there is the culture part. Forced to run, hide and fight in the
past, Jews are natural risk-takers — an essential quality to become an
entrepreneur.
➢ India too has its share of challenges when it comes to food, energy,
water and national security.
➢ It badly needs to enhance sustainability and take healthcare to every
nook and corner of the country. All of this needs to be done at a low cost.
Focus on Agriculture
➢ Agriculture being a top priority for the two countries is being attested
by the fact that India and Israel have a robust bilateral agreement for
cooperation in agriculture. Different Centers of Excellence in the agriculture
sector have been established in states such as Haryana, Maharashtra,
Rajasthan, Gujarat etc. India has a lot to learn from the Dryland
agriculture of Israel. The Economic Survey 2016-17 batted for Indo-Israel
cooperation in drip-irrigation technologies.
➢ India has a lot to learn from Israeli expertise and technologies in
horticulture mechanization, protected cultivation, orchard and canopy
management, nursery management, micro-irrigation and post-harvest
management. There have been a Declaration of Intent for further
cooperation in agriculture during the visit of President R. Rivlin to India in
November 2016.
Focus on Economic and Commercial Relations
➢ The bilateral merchandise trade was US$ 200 million in 1992 which
largely consisted of trade in diamonds.
➢ As the bilateral relations got further intensified the two-way
merchandise trade zoomed up to US$ 5.19 billion in 2011 followed by a
period of stagnation.
➢ More than fifty percent of the bilateral trade consists of trade in
diamonds.
➢ However, in recent times it has diversified into sectors such as
pharmaceuticals, agriculture, IT etc.
➢ Diamonds and metals, chemical products and textiles are the major
exports from India to Israel.
➢ Major imports by India from Israel also include Diamonds and
metals, chemicals (mainly potash) and machinery and transport equipment
are major exports from Israel to India.
➢ Almost seventy-five percent of bilateral trade in services flow from
India to Israel.
➢ Apart from direct investments, Foreign Direct Investment (FDI) from
Israel to India also flows through the USA, Europe and Singapore.
➢ Companies from Israel have made substantial investments in India in
fields as diversified as renewable energy, telecom, energy, real estate, water
technologies etc.
➢ An affirmation of India’s investment in Israel came with 100%
acquisition of Israeli drip-irrigation company Naandan by Jain Irrigation.
➢ The State Bank of India opened a branch in Tel Aviv in 2007.
➢ During the last decade, Indian IT majors such as Infosys, Wipro and
Tech Mahindra have also made significant investments in Israel.
Focus on Space Collaboration
➢ India and Israel have signed a cooperative agreement promoting
space collaboration between both nations.
➢ The two countries have also signed an agreement outlining the
deployment of TAUVEX, an Israeli space telescope array, on India's GSAT-4,
a planned navigation and communication satellite. The GSAT-4 itself failed
to launch, due to the failure of its cryogenic engine.
➢ In 2008, TecSAR was successfully inserted into orbit by India's PSLV.
One of TecSAR's primary functions is to monitor Iran's military activities.
➢ In 2009, India successfully launched RISAT-2, a synthetic aperture
radar imaging satellite. The launch of the RISAT-2 satellite aimed to provide
India with greater earth observation power, which would improve disaster
management, and increase surveillance and defence capabilities.
Recent Developments
➢ "India-Israel Industrial R&D and Technological Innovation Fund” was
concluded in July 2017 when Prime Minister Narendra Modi visited Israel.
➢ This will support high value-added R&D and enhance the knowledge
base of Indian technology industries.
➢ The techno-economic collaboration is expected to increase
significantly.
➢ Israel will invest $68.6 million to boost cooperation with India in
areas like tourism, technology, agriculture and innovation over a period of
four years.
➢ India has been trying hard to balance its relationship with Israel with
its support to the Palestinian cause.
➢ Israel seems to understand India’s position, which is a sign of
maturity.
➢ India and Israel are set to jointly develop new crop varieties and
share post-harvest technologies following the success of the 10-year-old
Indo-Israeli Agriculture Project (IIAP).
India in Palestine-Israel Conflict
➢ India recognizes the existence of both Israel and Palestine and
engages with them on separate levels.
➢ While India has significant military and water cooperation
agreements with Israel it has also been involved in engaging actively with
Palestine and sending it aid when needed.
➢ When the International Criminal Court is involved in a resolution,
India tends to abstain from voting unless the situation is exceptional.
➢ India has thus, been involved in a careful balancing act due to the
enormous economic, security as well as cultural significance of these
relations.
Challenges faced by Israel
• Scarcity of water and Natural Resources.
• Geographically arid area.
• Israel has a very small domestic market.
• Neighbouring countries as Israel is surrounded by enemies.

Challenges in India-Israel Relationship

● Delinking Israel and Palestine in India’s foreign policy is not that
easy. India has continued political, diplomatic and developmental support
to Palestine. Although there is an increased focus on closer ties with Israel,
India must create a balance between traditional support to Palestine and
new emerging geopolitical situations.
● India maintains its position that strengthening the relationship with
Israel will further strengthen the Palestinian Cause not weaken it. India is
firm on its stand over Independent Palestinian state through peaceful and
diplomatic means.
● India abstained on a UNHRC resolution in 2015 and criticized Israel
for aerial Bombing in Gaza. Increasing defence ties with other defence
partner and balancing it vis-à-vis Israel is a cumbersome task.
Way Forward
● Like Israel, India needs to invest heavily in education and R&D. Our
investment in R&D is a paltry 0.7 percent of GDP.
● Very little of this goes to universities considering that the bulk of
public R&D goes into space, energy and defence sectors.
● China, another large economy, has managed to up its R&D
investment from 1.3 percent in 2006 to 2.18 percent in 2018. So size is not
an issue here. It is just the intent.
● Many experts have faulted India’s innovation that focuses on getting
products and services to people at an affordable cost, rather than aiming
for global leadership. They are wrong.
● Solving India’s challenge will eventually open opportunities for Indian
enterprises globally. That is exactly what Israel did.

For Prelims: Global Innovation Index

Source: The Hindu, The Diplomat