Israel's technology market is absolutely booming. Second to Silicon Valley in the US, which no country can compete with just yet, Israel has managed to nurture a successful start-up community that has seen a number of global technology companies swoop in to make acquisitions – always a tell-tale sign that somewhere is becoming a hotbed for innovation. I have also started to notice first-hand when speaking to customers in the UK – particularly those in the retail sector – that they are looking to Israel for the next piece of tech they can use to gain a competitive edge.
The UK government seems to also have picked up on this, where we have seen an increased level of cooperation between Prime MinisterDavid Cameron and Israel's Prime Minister Benjamin Netanyahu on the subject of technology. Earlier this week diginomica took a close look at how the two governments are working together to share information on developing digital public services. However, further to this, a separate initiative has been developing behind the scenes which has the potential to significantly boost tech trade between the two countries.
The UK-Israel Tech Hub is a body that sits alongside the UK government's UK Trade and Investment Organisation, which aims to identify common ground between the two nations. This isn't about sharing ideas and information on digital and start-ups, this is about identifying gaps in capability in sectors across the UK and then seeing if technology companies in Israel can fill them. The Hub focuses on a number of core sectors – clean tech, bio med, digital applications, Arabic digital content – and aims to connect companies in the UK with those selling solutions in Israel.
I spoke to the UK-Israel Tech Hub's deputy director, Ayelet Mavor, about how the partnership is developing. She said:
“The model is interesting. We work for the British government, so it's about pulling the innovative solutions out of Israel as opposed to a trade organisation in Israel that would be pushing into the UK. It's very much a pull approach – we speak to UK companies, try to understand their innovation needs and then try and offer solutions out of Israel to push the UK companies ahead of the curve in finding the most innovative solutions to advance their businesses.”
An Israeli delegation hits London
One of the Hub's main initiatives involves bringing Israeli companies to the UK, focused on particular sectors, to speak directly to companies that may be interested in their technology. Last week was the first one of these delegations, which was a cooperative effort with the Trade and Economic Mission at the Embassy of Israel and the Israel Export Institute. It saw 30 Israeli retail and water tech companies come to London to showcase innovative solutions.
Mavor said that the companies met with over 60 of the UK's top retailers and other interested businesses, which has since resulted in 15 serious commercial discussions. The retail technology was of particular interest, where the Israeli firms were selling software that focused on in-store navigation systems, loyalty programmes,gifting solutions, virtual fitting rooms, and fashion gaming.Mavor said:
“It was a very intense week. It's the British and Israel governments really working together to make this happen because everybody understands the win-win here - British companies understand that if they aren't out there trying to understand what the next big solution is then they will be out of the game.
“One of the key points of this specific mission is that we bought companies over from Israel that are already businesses, so not early stage start-ups, not people with ideas. But actual businesses. It was a criteria for the trip that they had to have at least one international client, so we had CEOs really doing business. You could feel it in the room, there was real business being done. Retailers got products that are ready and businesses that are ready to scale. It was really exciting.”
The UK-Israel Tech Hub was initially defined as a three year programme and very much a pilot scheme for the UK government, though funded and encouraged by UK Trade and Investment. Mavor explained that the Hub was seen as “experimental” because it doesn't rely on a model that is direct trade or inward investment – it is “something in between”. However, following its early successes the Hub has been granted further funding and Prime Minister David Cameron has now said that the model will be explored with other countries.
“Creating these bi-lateral ecosystems around technology is really interesting because it proves that there are different ways of commercial diplomacy that fall out of the normal needs of inward investment and trade.
“What this proves is that Israel in terms of absolute size of economy would have been overlooked by Trade and Investment. But it is now about partnerships and winning new business.”
However, Mavor admits that although the retail discussions have been a success, there are other industries that still need convincing. For
instance, one of the areas of focus for the Hub is looking at how UK businesses could expand their presence on the web with Arabic content that is contextualised for an Arab audience – something that Arab digital content providers are hoping to sell as a service via the Hub.
“I think that the real hard work is to step into areas where we need to explain the need. British retailers, for example, have understood that they want to be part of the technology coming out Israel because it keeps them in them game. But there are other industries that still require convincing.
“So one of the areas that we focus on is Arab digital content – which focuses on Israelis writing code and content in Arabic with the context of Arabic culture and looking to the UK as a gateway to the whole Arabic speaking world.This is a challenge to try and explain, that Arabic speaking Israelis have solutions for Arabic world – the context is a little bit confusing.”
I really like this idea and I do think that it is a model that should be explored further. Although I have spoken to companies that are already looking to Israel for innovative solutions, without the help of a government bod holding their hands, this does seem to be a bit of a no-brainer for the UK and Israel.
If UK companies can be easily exposed to the best technology coming out of regions outside of Silicon Valley – where they may have grown accustomed to sourcing from – then that is only going to be a good thing for the competitiveness of UK industries, whilst also boosting investment in Israel (or whichever Tech Hub country is next in line). Win-win.