Israel’s Thriving Mobility-Tech Sector Has Created an Innovation Nation
In the mobility space, Israel’s Silicon Wadi is rivaling Silicon Valley for smarts and start-ups.
“We’re gonna need partnerships, big and small, particularly with start-ups,” Ford Motor Co. chairman Bill Ford (above) announced at his company’s newly-opened research center in Tel Aviv last June. “The tech ecosystem here in Israel is unbelievable,” he added, citing a lack of hierarchy, a highly-educated talent base, leadership that is sharpened by mandatory service in the Israeli Defense Forces, and “the ability to move fast.” He described the new facility as “lifeblood for what Ford Motor Co. will become in the future.”
It was Mr. Ford’s first visit to Israel, with many more to come, he promised the small audience which included U.S. Ambassador David Friedman and other dignitaries. SAE’s Autonomous Vehicle Engineering (AVE) was there, too. The research center is co-located with SAIPS, the Israel-born machine-learning and computer-vision subsidiary that Ford purchased in 2016.
The initial team of 12 engineers and scientists will focus on autonomous-driving technologies, sensor development, cybersecurity and over-the-air communications, explained Jim Buczkowski, Ford’s director of electrical and electronics systems research and advanced engineering, whom Bill Ford credited as championing the new R&D center. “With this facility we’ll have direct access to young companies and scout the high level of technical talent here in Israel,” Buczkowski, a Henry Ford Technical Fellow, told AVE.
Automakers, Tier-1 suppliers, venture capitalists and many others who are developing mobility technology have been tripping over themselves to establish a presence in “Silicon Wadi,” the nickname (“wadi” is Arabic for valley) for Israel’s expansive tech hub in and around Tel Aviv. Israel annually has been creating more than 1,000 tech start-ups of all types. The tiny Mediterranean nation of 8 million now has more tech companies listed on the NASDAQ stock exchange than any other country except the U.S. and China.
A McKinsey report ranks Israel third behind those giants in the number of mobility technology companies and disclosed investments. It outperforms Germany, Japan, India and South Korea on this front. The mobility space now represents 10% of Israel’s startups. They’ve skyrocketed from 87 companies in 2013 to 644 in 2019, according to Orlie Dahan, executive director of the annual EcoMotion mobility conference and trade show held in Tel Aviv. More than $6 billion has been invested in these nascent mobility-tech companies, she said.
Additionally, 15% of the country’s start-ups are in the booming artificial intelligence (AI) field, a growing focus that was ignited by Intel’s $15.3-billion acquisition of Israel-based Mobileye in 2017. Such dynamics are shaping the connected- and autonomous-mobility future. They’re part of the reason more than 350 multinational companies – including General Motors, Bosch, Hyundai, Lear, Volkswagen and recently, Ford and BMW – operate R&D centers in Israel.
Observed software engineer and Google CEO Eric Schmidt has noted, “The United States is the number one place in the world for entrepreneurs, but after the U.S., Israel is the best.” The reasons are cultural, explained Udy Danino, the director of Ford’s new R&D center and founder of SAIPS. “Adaptiveness, hard work and risk-aversion are part of the Israeli people’s DNA.”
Tech breeding ground
The country’s innate vibrancy was clearly on display at EcoMotion 2019. Now in its seventh year, the global mobility-tech event sponsored by the government and the non-profit Israel Innovation Institute is on a sharp growth curve. This year it hosted 4,000 attendees according to Dahan. The aisles at the Tel Aviv Expo Center were jammed with engineers engaging with the companies displaying their latest products. Ask any engineer who’s on “booth duty” about their background and the reply often will include a story about service in the Israel Defense Forces (IDF).
Two former F-16 pilots, a radar expert and various electronic and sensor specialists were among those encountered on the show floor. “Technology is everywhere in our military, and by the time a young Israeli, 18-20 years old, has done their required three years of service, he or she has gained critical skills in decision making, risk assessment and leadership that helps them greatly in life later on,” said Omer Keilaf, CEO of Innoviz Technologies. “It’s a little bit different than Silicon Valley.” His company’s 3D lidar is being validated for use by BMW and others.
During EcoMotion, AVE was privileged to participate in a private “tech pitch” involving nine start-ups. Each company had a few minutes to present its innovation to a small audience of journalists and the products were impressive. The wide-ranging overtures included:
- Imaging radar from ARBE that brings lidar detection qualities to radar-based sensing. It “closes the SAE Level 3 sensor gap,” said ARBE CEO and co-founder Kobi Marenko
- “Silence on a chip” from Silentium. This active acoustics software allows passengers to personalize (in a 1kHZ range) the vehicle cabin’s acoustics using a matrix of sensors, microphones and a controller, claimed CEO Yoel Naor
- UVeye showed its novel solution for detecting maintenance issues in AVs through their lifecycle, using a compact electronic inspection unit that provides a 360-degree view, at 90% accuracy, noted CEO Amir Hever
- Foretellix aims to raise the fidelity and reduce time involved with verifying AV systems with its open-sourced, non-proprietary, chip-based testing and measurement system for AV developers, said co-founder and CEO Ziv Binyamini. “It will connect with physical simulators and roboticized vehicle testing. It will simplify life,” promised CTO Yoav Holander
- Using the existing vehicle sensor suite, MDGo’s software evaluates vehicle crashes and assesses occupant injuries and vehicle damage seconds later, generating life-saving information for first responders and a potential revenue stream for OEMs, said Shahar Samoelov, VP of business development
Supporting these and other private-sector entrepreneurs is the Israeli government. It brings a workable mix of tax breaks, grants and other financial incentives while keeping the regulatory harness relatively loose. According to a 2016 Roland Berger report, the state finances 18 incubators in which fledgling companies receive up to 85% financing. The incubators, notes the report, are “a breeding ground for future entrepreneurs.”
In 2017, government Resolution 2316 aimed at encouraging Israeli industry, entrepreneurship and research in the field of smart mobility, “and to position Israel as a global leader in the field,” helped plow 250 million shekels ($68.5 million) into a national plan for smart mobility through 2021. Conversely, the urgency to capitalize tech start-ups in Israel has even spawned a crowd-sourced venture fund: OurCrowd has raised more than $1 billion from 30,000 investors in 183 countries and has invested in nearly 200 companies to date.
“We believe the entrepreneur is smarter than the government,” asserted Dr. Ami Appelbaum, chairman of the Israel Innovation Authority and the government’s chief scientist. His organization scouts for “breakthrough tech,” supports start-ups and helps vector them into market-ready companies. “We’ll reduce the risk for you and help develop your supply chain,” he told the EcoMotion audience.
An academic sector that produces quality research is a key part of enriching and deepening the talent pool. Ms. Dahan of EcoMotion noted that Israel steadily nurtures STEM-related primary and secondary education (including “boot camps” to teach software code). The government also has encouraged the entrance of ultra-orthodox and Arab students at the university level and has eased immigration policies to attract more foreign-born scientists and engineers to the country’s workforce. According to Gil Golan, executive director of GM Research in Tel Aviv, an average tech employee in Israel stays seven years with a company. “There are jobs chasing engineers in mobility,” he said.
Expanding cyber central
To help ensure its own survival, Israel has become the global epicenter of cyber-security technology, the sector for which it is best known. It is estimated that Israeli companies account for nearly 40% of global cyber-security technology sales including anti-virus software, Internet and database security and other cyber-defense solutions. Conversations about cyber at EcoMotion typically mentioned the key role played by fabled Unit 8200, the IDF’s elite group charged with code decryption and sensor-signal analysis as a wellspring of start-up entrepreneurs.
But even the IDF is feeling the shortage of qualified service members for Unit 8200 and other associated electronic-warfare resources. Changes are underway to increase capability, noted Prof. Dr. Bjorn Bloching, a Roland Berger senior partner who has studied Israel’s tech sector. “One of the reasons Israel’s Arabs have missed out on the tech boom is that few of them serve in the Israeli military,” Dr. Bloching explained in a report.
He noted that while the IDF generates a steady flow of premier technology specialists, it also creates the personal networks that are vital to tech-sector recruitment. “To help bring Arab entrepreneurs into these networks, the Nazareth Business Incubation Center has partnered with the alumni association of Unit 8200,” he writes. Supported by SAP Labs Israel and other corporate players, the new partnership is developing a start-up accelerator aimed at Arab Israelis.
Two cyber-security companies AVE met with while in Tel Aviv, Karamba Security and Upstream, are emerging as leaders in the field, but bring different approaches. “We integrate our software into the ‘tool chain’ to provide patented automated ‘hardening,’” said David Barzilai, founder and chairman of Karamba. “We look at a car’s ECUs as an array of IoT [internet of things] devices.” Dan Sahar, product VP at Upstream, told AVE, “We’re the opposite of everyone out there, including Karamba. We decided to stay in the cloud and secure our clients from there.”
Shalom, General Motors
“The only way to make an AV safe is to make it an AV from scratch,” asserted Gil Golan, as he spoke with a small group of visiting media. GM is truly a pioneer in a pioneering nation, having begun its scouting for tech talent in Israel nearly 30 years ago. The company’s glassy, ultra-modern 50,000-square-foot research HQ has the requisite Silicon Valley “cool” factors – airy and casual with easy access to refreshments. It’s aimed at not only attracting talent but also retaining the roughly 350 electrical engineers, computer scientists and technicians currently employed there. Apple’s HQ is next door and GM has a second Tel Aviv facility nearby.
“GM leadership, before the bankruptcy, had the vision to see the future” and invest in Israeli brainpower and creativity, said Golan, who was recruited from an elite IDF electronics unit by Harry Pearce, the dynamic GM vice-chairman during the 1990s. Golan indicated that GM Israel is developing its own sensor hardware, to be manufactured by a supplier. The Tel Aviv engineers are responsible for innovations including the EV Energy app for Bolt EV customers that is updated over the air, as well as OnStar apps for the European market.
“We’re proving that you can still innovate in a large company,” Golan asserted. “[GM leadership] Mary Barra, Mark Reuss, Doug Parks, Ken Morris and Ken Kelso deserve huge credit for letting the dreamers dream.” That’s also an apt description of Israel’s thriving mobility-tech sector and of the innovation nation it’s become.