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Israeli special combat soldiers conduct a training exercise using virtual reality (VR) battlefield technology to simulate Hamas tunnels leading from Gaza to Israel at an Israeli Army base in Petach Tikva, Israel.
“Traditional definitions of high-tech and low-tech are out of date. Everything is getting technologized. There’s not a single sector that’s not being disrupted, or that doesn’t benefit from innovation,” says Hasson. He tells how, during his six-year term, he fielded daily visits from executives of multinational companies from all kinds of industries, seeking new technology.
Israel’s edge in innovation is illustrated by the country’s number two ranking on the subject in the World Economic Forum’s 2016-2017 Competitiveness report. Israel’s overall competitiveness ranking was 24th, ahead of some major economies, like China and South Korea but well behind most of Western Europe, the US and several Asian economies.
The relative health of Israel’s high-tech industry is itself hotly debated among analysts and observers. The Innovation Authority’s 2016 report, looking at Israel’s relative drop in three leading indices in 2015, even sounded a warning: “It is difficult to ignore the overall picture indicating erosion in Israel’s competitive situation.”
The mood has considerably brightened since then, with the industry raking in record investments in 2016 and then in March this year seeing the biggest deal in its history with Intel’s acquisition of autonomous driving technology company Mobileye.
Whatever the fluctuations in its relative global standing, high-tech remains leading in the Israeli economy. It makes up about half of the country’s industrial exports. But, warns Hasson, it may not be enough.
“It’s a tremendous achievement, world leading, high productivity etcetera. But it only employs about nine percent of the workforce and the other parts of the economy are not performing as well, for example in their productivity, in their connectivity to the global value chains,” notes Hasson.
He says that macro-economic data shows that there is a big productivity gap between some traditional industry sectors in Israel and their peers in the OECD. Also, the ability of Israel’s more traditional industries to access international markets is limited.