It’s the innovations, stupid!

The phrase of the former US President Bill Clinton: “It’s the economy, stupid!” is world-wide known. With this statement the head of the White House wanted to emphasize the fact that the economic issues were the most important in order to gain support in the elections.

When it comes to Israel and, first of all, to the reasons of the success of a country with population of nearly eight million people, surrounded by nearly 800 million Arabs mostly hostile to it, we can paraphrase this statement: “It’s innovations, stupid!” And this becomes clear when you look at what multinational companies operate in this country and these are: Microsoft, Cisco Systems, Motorola, IBM, Intel, Google, and Apple. The latter opened its office only last year, but the others have been operating in Israel for many years already and they are not afraid that the salaries for the Israeli employers are the same as those paid in the US. The fact is that Israel is the most innovative country in the world and the quality of scientific research has been ranked the first in the world. Four Israeli universities are in the top 30 world’s best universities. Thanks to its human capital Israel produces more start-up companies than large industrial countries such as Japan, China, India, Korea, Canada, France, Germany, and the United Kingdom. Besides, Israel attracted twice as much venture capital investments per capita than it was done in the United States and 30 times more than all the EU members.

Google CEO Eric Schmidt during his visit to Israel past June said in this regard: “Even thought Israel is such a small country it will have a significant impact on the evolution of the next phase of the technology that we use.”

But even now we can already say that thanks to innovations, and the government provides five percent of the GDP for research and development, Israel has achieved a breakthrough in many spheres, ranging from high-tech, medicine, biotechnology, and agricultural technologies.

So many people call it the Israeli “oil” because all the new technologies and products manufactured based on Israeli innovations are exported to the United States and Europe. For example, 75 percent of the products developed by Israeli scientists (we are talking about Sentrino processors) and manufactured at Intel factories in Israel are exported.

USB-flash, IP telephony, and ICQ were developed in Israel. One of the latest development is a pill camera. A patient only has to swallow it as a regular pill and it will show what is happening in the intestines. Therefore, there is no need to swallow a probe anymore.

The general manger of EMC Center of Excellence Orna Berry said in a conversation with a group of journalists, who were invited to the eighth space conference that started on January 28 in Tel Aviv, that the achievements of the country make Israel a global player in the information and technology spheres. By the way, the EMC Center in Israel has a command center for combating fraud in the global network and cyber intelligence section. The total turnover of the company, which also has an office in the US, reaches 20 billion dollars per year. This center provides assistance to different companies and banks in preventing fraud from hackers and scammers, who want to take advantage of, let’s say, someone else’s credit cards (on big screens you can see which bank in what country is attacked by scammers at the moment) or are even engaged in blackmailing of ordinary Internet users. The center itself does not have authority to directly fight against cyber crooks, it only tells its clients that there is some threat to their business. According to Daniel Cohen, head of the RSA Business Development – one of the EMC sections, only in case a company is not able to deal with the problem on its own, the center notifies police.

Zack Weisfeld, Senior Director of Strategy and Business Development, Microsoft Israel, who, in fact, left the company for the three times and was hired back, believes that the key to the success of Israel as the state of innovations or, as it is often called, the start-up nation has several components. First, the attitude to failures and the ability to take risks. This means that failures are taken fine in Israel, the important thing is that you should learn a lesson from your failure and draw conclusions from it. Besides, Israeli people do not accept any authority and things are rather informal around there: they even call their Prime Minister Benjamin Netanyahu “Bibi” [short for his name Benjamin. – Ed.]. Another important factor is team work, which is taught in army. And the most important thing, according to Weisfeld, is the entrepreneurship.

Israelwas, in fact, the first country in the world that provided state support to newly opened companies. Now a lot is invested in start-up companies. For three years they don’t have to pay taxes, they can receive training from the best teachers and can get a 30,000 dollar loan. At the present moment there are 4,800 start-up companies in Israel.

Two of such companies made presentations to reporters at the Miscrosoft office in Herzliya near Tel Aviv. This is the place where many companies have their offices. Itai Herman, director of Askem Company presented the program with the same name. It is a visual platform through which anyone can post a poll on any issue on Facebook or Twitter. For example, users can ask whether some outfit or footwear suits them or whether some politician is honest or not. The most important thing, according to Herman, is to have an interesting photo and a question. He got the idea after he realized that people often want to hear someone else’s opinion. And now, thanks to this program, designed by him in seven months, it became possible. Herman admitted that he had received 550 dollars of investment to finish work on this program and he still needs to get money for a better presentation.

Co-founder and director of another start-up Pixtr Aviv Hadot developed a program for improving amateur shots. According to him, his wife was the one who made him think of this idea because she did not like photos made by her iPhone and she kept erasing them. Thus, with three colleagues of his he began working on a program that would fix this problem and people wouldn’t have to refer to specialists with such issues. Hadot believes that people feel better when photo has been slightly edited. Of course, you can’t put the edited photo on your passport, because then you won’t be allowed through passport control. The creation of this program, which has features of face recognition, referring to a particular type of a race, and then correcting the image, including the feature of making the image symmetric with all proportions well balanced, took nine months. Hadot was lucky to find money for the development – he won Interglobal European Challenge award worth 20,000 dollars.

Talking about innovations in Israel, one cannot ignore the cultural factor. The famous Israeli entrepreneur Yossi Vardi calls it a syndrome of “Jewish mother.” “This is a cultural and spiritual phenomenon, it is not technology defined because there is technology everywhere in the world. All Israeli children know that their mother would tell them: ‘After all we’ve done for you ask for another Nobel Prize, it isn’t too much, is it?’”