As Israel proves its strength in smart-mobility technology, the world’s largest automakers are eager to tap into its wealth of knowledge, and largely overlook the country’s inexperience in automobile manufacturing.
For instance, the American multinational, Intel Corporation, has its Israeli subsidiary, Mobileye, headquartered in Jerusalem, focused on developing self-driving cars and advanced driver-assistance systems. As investment expert Didier Schreiber said, “Israel has a world-leading open innovation environment, driven by passion for AI and cyber-security.”
In fact, Israel has global recognition as the “Startup Nation,” of the world, with the largest number of startups per capita anywhere. Not only that, Israel is also noticed for building better-than existing products through its startups. With one startup for every 1,400 people in Israel’s 8.5 million population, the country has around 6000 active startups and companies. Jon Medved, CEO of OurCrowd, a Jerusalem-based investor platform, said “We don’t have huge natural resources, so we have worked hard to develop our skills-base in the country.”
Israel’s skilled and hardworking workforce has not gone unnoticed over the years. Newsweek named Tel Aviv one of the ten technologically most influential cities in the world, in 1998. By 2010, Israel had 140 scientists and technicians per 10,000 employees – one of the highest ratios in the world. And in 2012, an international study ranked Tel Aviv second only to Silicon Valley, as the best place in the world to launch a high-tech start-up company.
Therefore, despite lacking any substantial history of automobile manufacturing, Israel has emerged as a powerhouse in the field of smart-mobility technology. There is a strong practical reason for this, as astutely expressed by Alon Atsmon, Israeli business advisor and investor in automotive technology, “Car manufacturing is not about tires or brakes anymore, but the technology inside the car – the sensors and algorithms. It’s a natural next direction for the expertise Israel has built over the years.”
Thus, the global automotive industry is increasingly engaging with data and communication technologies, which have always been strengths for Israeli hi-tech. So, it is natural that the world’s leading auto manufacturers should prioritize establishing a permanent presence in Israel as they strategize to be among the first to access pioneering automotive technology.
Moreover, Yaniv Sulkes, in senior management in an Israeli automotive start-up, explained this significant paradigm shift the automotive industry is currently going through. Earlier it was all about “the engine, the power train and the design, now we’re getting into artificial intelligence, cybersecurity and network connectivity. It’s become an interdisciplinary domain and this is an area where Israel has a lot of IP [intellectual property] and experience.”
Likewise, America’s multinational auto manufacturer, Ford Motor Company, opened a tech lab in Tel Aviv recently, to serve as a research hub for its many tech ventures, including self-driving cars. This Research and Development center will focus on developing algorithms to connect with the three-dimensional mapping needed to operate self-driving cars.
Meanwhile, venture capitalist, Edouard Cukierman considers Israel’s highly skilled workforce powering the high-tech economic engine, as primarily responsible for luring international investors. “Technological entrepreneurship has turned us into a regional and global influencer,” he said. In fact, around 85% of funds invested in Israeli startups comes from overseas, mostly from the U.S., but also from Europe and Asia.
Furthermore, with over 500 transportation startups already located in the country, Israel has secured its place as a dynamic force in contemporary automotive innovation. What is more, it has not prevented the immediate consideration of a truck crash personal injury lawsuit. As Erez Dagan, executive Vice President of product and strategy at Mobileye, said, ““The best way to exemplify Israeli culture – or any country’s culture – is to simply drive on its roads.”
However, investors in Israel’s fledgling automotive industry face steep challenges with the country’s obvious lack of experience in car-making, also its distance from traditional auto centers, and with demand for skilled workers from other tech sectors, especially from large international firms like Google or Intel. In fact, the auto startups lured skilled personnel from other tech areas into the auto industry. In affirmation of this point, the Israeli government has forecast a shortfall, over the next decade, of 10,000 engineers and programmers in the general tech sector that even now employs 270,000. As Mobileye co-founder, Ziv Aviram, said, “We were not known as a country that provides technology to the automotive industry and suddenly you have more than 500 different startups dealing with … the automotive industry.”
Above all, where Israel can obviously score is the new perspective of the automotive.
As Antoine Basseville, director of the joint innovation lab of Renault and Nissan in Tel Aviv, said, “The automotive industry is moving away from classical cars and facing new challenges. Those challenges are mainly that cars are becoming increasingly electric, increasingly connected and increasingly autonomous.” This facility is engaged in developing sensors for autonomous driving, cyber security, and big data.
What is more, the economic potential for self-driving vehicles appears limitless. As tech expert, Ryan Peterson said, “Labor accounts for 75% of the cost of transporting shipments by truck, so adopters can begin to realize those savings. Beyond that, while truckers are prohibited from driving more than 11 hours per day without taking an eight-hour break, a driverless truck can drive for the entire day.”