ibnlive » Blogs

Vivian Fernandes
Wednesday, February 06, 2013 at 18 : 52

India must make Israel its partner in innovation


I recently met Israel's chief scientist Avi Hasson. He was in Delhi to sign an agreement with an infrastructure company, which for reasons not disclosed, did not go through. Last year he had inked a deal with Infosys Labs in the emerging areas of cloud computing, analytics, information security, sensors and sustainability.

Hasson's designation is a bit of misnomer; he is not a scientist. After serving in the Israeli Army's elite technology group, Hasson worked in start-ups and a large telecom company, before spending 10 years as a venture capitalist.

The office of the chief scientist (OCS) is a funding agency. If there is an innovative idea that seems commercially promising in any area, whether Internet, plastics, agriculture, or advanced materials, it will get a look in (this excludes basic research). Those qualifying need not only be start-ups; even mature companies are eligible. Every year about 3,000 companies vie for its $400 million budget.

"We are agnostic about technology but we choose the best candidates," says Hasson. OCS does not provide 100 per cent funding. For every one of its dollar, its private partners bring 1.5 to two times in R&D investment. And the projects have paid back its contribution five to 13 times over.

Unlike venture capitalists who will be reassured only by a strong probability of success, the chief scientist's office believes that 'even failures can have a positive effect' for a nation. In fact, too many successful projects would be a cause for worry as it would connote risk aversion.

Money is not the only language that the OCS speaks. It strives to create conditions for innovation to sprout and thrive. If there is a market failure, it will design a remedy for it. It has piloted legislation for tax credits to angel investors. Recently it set up a national tissue bank to enable cancer research.

Hasson is keen on playing the match maker for innovative Indian and Israeli companies. It is an opportunity India should not miss. Israel is the technology capital of the world. This country of 7.7 million people invests proportionately more in research and development (as a share of its GDP) than any other country, though the US certainly has a bigger amount to play around with because of the sheer size of its economy. Israelis have the most patents (190 for every 10,000 persons). It also gets more venture capital funding than most countries much bigger in size.

According to Start-up Nation, a book on Israel's economic achievement by Dan Senor and Saul Singer of the US Council on Foreign Relations, among the well-known Israeli inventions is the 8088 chip that went into IBM's first personal computer. Chips with variable clock speeds like Intel's Core 2 Duo were also their creation. ICQ, an online chat service, later acquired by AOL was developed by the son of an Israeli venture capitalist. PillCams, which can transmit up to 18 photographs a second from inside the human gut was a spin off from Israeli military technology. Checkpoint, a financial fraud detection company was founded by the alumni of an elite Israeli Army unit. Better Place is a nationwide system of charging points and battery swap stations that makes Israel the pioneer in use of emission-less cars. Drip irrigation, which has caught the imagination of Indian farmers in water scare areas, was also the discovery of an Israeli engineer in the 1960s.

There are many reasons why Israel is so inventive. Its army is the incubator of innovation and enterprise. There is no shame attached to failure in that country. The family is a prized institution; it gives people the confidence to take risks. Like India, Israel prizes learning. It is a nation of immigrants and uprooted people tend to want to get on in life. Adversity and persecution have been constant companions of the Jews every since they were dispersed from their homeland by the Romans in 70 CE. They have had to live by their wits since then.

India cannot base its prosperity on low wages alone. It must increasingly rely on technology and productivity. Neither can the development of a nation of 1.2 billion people be resource-intensive. That will be environmentally destructive. India needs smart and frugal technological solutions in every area: agriculture, energy management, water conservation, healthcare, education and internal security. It already has a thriving relationship with Israel in defence. This must be extended to civilian areas as well. How about creating joint innovation and manufacturing enclaves like Japanese ones in the Delhi-Mumbai Industrial Corridor?


More about Vivian Fernandes

Vivian Fernandes is a senior journalist with nearly 30 years of practice, 19 of them in television, all of which he spent at TV18. Vivian’s last assignment was as executive editor of a book on India and China written by the founder of the Network 18 group, Mr Raghav Bahl. He has been an observer of Indian business and politics, and had reported on economic policy making as reporter, chief of Delhi bureau of correspondents and economic policy editor. Vivian has traveled abroad with Prime Ministers Narasimha Rao, Atal Behari Vajpayee and Manmohan Singh. He was also reported on the World Trade Organization’s trade talks from Cancun, Hong Kong and Geneva. He continues his association with the Network18 group, but not as an employee.


Recent Posts