To Keep Its Tech Edge, Israel Needs A National AI Strategy, Says Israel Innovation Authority

Israel, a recognized world tech leader, is lagging behind other countries on investment in artificial intelligence (AI) infrastructures and must develop a national AI strategy to keep its edge, the Israel Innovation Authority (IIA) said this week following the launch of a new report focused on the challenges and opportunities posed by future technologies.

“We must acknowledge the fact that the race for leadership in artificial-intelligence-based technology has begun. In order for Israel to continue to lead in the global technological race, it is necessary to allocate resources and a national artificial intelligence strategy shared by the government, academia, and the industry,” said Israel Innovation Authority CEO Aharon Aharon.

AI, says the IIA, “will serve as the foundation for many future advanced tech applications that will revolutionize every aspect of our lives: autonomous vehicles, personalized medicine, precision agriculture, mobile robots, computers that speak and understand natural language, and many other developments we cannot yet envision.”

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“AI-based innovation is expected to be key for economic growth in companies, in sectors, and in countries that will be at the forefront of this technology,” the report says, noting that many countries already have a strategy and “are developing research infrastructure, human capital, and a supportive regulatory framework.” China is leading these efforts and has invested some $10 billion, followed by South Korea, and France, according to the report.

These developments should be a warning signal, says the IIA. “If appropriate resources are not allocated, and if we do not develop suitable tools to advance Israeli leadership in AI-based technologies, we risk lagging behind. Accordingly, we are calling for the consolidation of all sectors – government, academia, and industry – to establish a vision and a strategy on AI for the Israeli economy.”

Market forces are “not operating at an optimal level, necessitating targeted government intervention,” the authority says. The plan it lays out includes reinforcing research infrastructure in AI fields in academia in order “to turn Israeli research universities into AI excellence centers,” nurturing all human capital required in the field (not just experts) and evaluating future workforce challenges, developing R&D infrastructure for academia and industry that taps into Big Data without compromising on privacy, and implementing AI tech in all branches of the economy.

While noting the challenge inherent in the plan, the IIA says Israel’s capabilities have already proven themselves. “Israeli academia is at the forefront of global knowledge in computability, its security apparatus creates advanced technologies and skilled human capital, Israeli entrepreneurs stand out in their daring [approach] and their innovation, and the Israeli high-tech industry is flourishing and evolving,” reads the report.

And while Israel can’t compete with massive investments either by whole countries or by global giants, “Israeli companies have managed to be technological leaders in exclusive fields, and
have been able to compete with resource-rich organizations.” These assets will help Israel get on board with the next wave of technology,” the IIA argues.

Worker shortage and the non-tech world

Another key point in the report is the threat to the Israeli economy and the future of its ecosystem posed by the high inequality levels in Israeli society. In a previous report in December 2018 prepared jointly with Start-Up Nation Central (SNC), the Israeli Innovation Authority warned that a severe shortage of skilled workers, estimated at 15,000, posed a serious challenge, impeding growth across all sectors of the economy. Urging a much more active pursuit of wider pools of untapped talent, the authors called for intensified efforts to integrate communities with lower levels of participation in the high-tech field – women, ultra-Orthodox, Arab-Israeli.

“In order for the Israeli high-tech to really live up to its potential the main challenge is to work towards increasing the number of people employed in technological sectors among the general population and in the periphery in particular,” says Israeli Minister of Economy and Industry Eli Cohen in the current report.

Israel should “make the transition from a startup nation to a smart-up nation” where high-tech success can drive all-encompassing financial growth, the IIA says. “It is not sufficient to develop innovative technologies – they should be implemented in all sectors of the economy and in all areas of life.”

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There seems to be a significant discrepancy between the advanced high-tech industry and day-to-day life in Israel, the IIA notes. “Most people in Israel do not feel that they are living in a ‘technological’ country when they are on their way to work, when dealing with bureaucracy, or when shopping at chain stores. This is more than just a feeling – substantial sectors in Israel, such as transportation, commerce, construction, education, and public services, are still lagging behind other Western countries.”

Israel may be a leading source of innovation but falls behind developed countries significantly in its consumption and in the assimilation of technology due to a number of factors including lack of competition, and regulation. As a course of action, the IIA says collaborations between Israeli high-tech companies and Israeli organizations in the business and public sectors must be strongly encouraged.

“Currently, Israeli high-tech companies primarily deal with global markets and have few local customers. As a result, the extraordinary potential of Israeli innovative developments in improving products and services offered to the local population remains unfulfilled,” the authors write.

The IIA says it is further looking into collaborations to promote “regulation that encourages innovation.” Israel is expected to join the C4IR network, which aims to consolidate and share best practices in the field of regulation of innovation, within the framework of the cooperation currently being formed with the World Economic Forum. The Innovation Authority says it will operate an Israeli center, “which will work with local regulators to set regulatory guidelines for future technologies similar to global standards.”