Israeli Tech Moved from Components to Products, Says Israeli Government Innovation Chief

Israel’s technology industry has moved from developing components to developing full products and now it aims to move onward to content, said this morning Aharon Aharon, CEO of the Israel Innovation Authority, Israel's government innovation investment arm.

“In the past, the Israeli tech industries focused on components, such as chips. In the current wave of innovation coming from Israel, companies create complex platforms that are used for content creation,” Mr. Aharon said, speaking at Calcalist's seventh digital and mobile conference that is currently taking place in Tel Aviv.

A unit of the Israeli Ministry of Economy, the authority has an annual budget of 1.6 billion Shekels, which is around $450 million, for investments in technology firms and basic research. The government agency invests in about one thousand companies and projects each year, funding startups, technology commercialization projects at Israeli universities, research projects at mature companies, and international joint ventures.

A former Apple executive, Mr. Aharon was appointed as CEO of the authority in 2016. The authority's goal, he said, is to promote innovation as a growth engine for the Israeli economy in a sustainable way.

Despite the success of the Israeli tech industry, the country's overall productivity is low compared to other OECD countries, according to recently published research by the Taub Institute of Social Policy Studies, a Jerusalem-based think tank. 9% of the overall workforce in the country is employed in technology-related jobs, with an average wage that is twice as high as wages other business sectors in the country, according to the research.

Ubiquitous computing, Mr. Aharon said, might challenge the existing mobile economy, transferring value from mobile phones to other platforms. Biometric sensors located on the body can send data to smart home appliances, cars, and smartwatches, enhancing the personalization of digital services.