Israel's most important “natural” resource
Appropriate government support of early-stage startups will prepare the sector for future technologies and allow Israeli innovation to be at the forefront of the Israeli economy, writes Sagi Dagan, Head of the Growth & Strategy Division at the Israel Innovation Authority
At a time when investments in Israeli high-tech continue in areas with obvious economic potential, this is not the case for emerging future technologies. Appropriate government activity in these areas, through the support of early-stage startups – in technological infrastructures for R&D, training programs for suitable human capital, and more – will also prepare the sector for future technologies and allow Israeli innovation to be at the forefront of the Israeli economy, in future crises as well.It is easy to present the high-tech sector as a separate economy for the few, but the data show otherwise. The high-tech sector and its technological innovation are the Israeli economy's most important natural resource. This sector represents about 15% of the GDP, 45% of all exports, and some 24% of income tax from salaried employees. This is not a shadow economy operating in parallel to the rest of the economy. Rather, high-tech is the future technological and innovation economy of the 21st century, bringing in its wake other segments of the economy – healthcare organizations, seaports, the food industry – all working together with startups to engage with innovations in their own fields, thus establishing a technological advantage in the global arena. Business and public organizations that fail to adopt innovation and technological advances will not be able to exist for too long. They are destined to be left behind and disappear. At present, formulating a policy on innovation for Israel is doubly complex. On the one hand, we must maintain the lead established in high-tech over the last 50 years, and, on the other hand, the government must accelerate the transition of the rest of the Israeli economy, and of itself, into the 21st century, and join the technological forefront. This requires innovation in government policy, which transitioned from creating the tech industry to supporting innovative and high-risk innovative technology, as well as supporting enabling regulation that is suited to the technological innovations and advancements. Because this is the way – the only way – to generate groundbreaking Israeli innovation that will outline our global leadership as a nation, the way that only Israel's unique human capital can generate.
Sagi Dagan is the Head of the Growth & Strategy Division at the Israel Innovation Authority.