On his first visit to India, Israel’s Minister of Science & Technology Ofir Akunis speaks about how the ‘Start-up Nation’ could cooperate with India, which itself has witnessed a number of technology start-ups come along in the past few years. Akunis also speaks about the policy initiatives taken by the Israeli government to boost an ecosystem of innovation in a relatively tensed geopolitical situation. Excerpts:
In India, investment into capital-intensive sectors is generally attracted by giving financial incentives such as tax sops, cheap land parcels, etc. How is this different from Israel’s model of promoting innovation and industry there?
It’s a free-market in Israel. The high-tech industries and companies can do the business between themselves. But we’re supporting research and development in Israel, all over the country, and right now it is the peak of all times in Israeli budget, in Israeli shekels. Apart from that we support unique start-ups. This is our formula to be a high-tech nation. We think the right formula is to support R&D, and specific start-ups. Most of the support that we would provide to big companies wanting to set up factories there is when they are set up in peripheral zones. If the strong is strong, we don’t need to touch him, and I’m talking about the industry, the population, everything. But if you recognise weak population, especially in the periphery, we support them. We buy computers and tablets and provide it to them free of charge. This program ‘computer per child’ is still there in our Prime Minister’s Office.
Several in India’s start-up ecosystem have issues with larger foreign companies coming in with huge investments that tend to disrupt the level-playing field here. Has Israel too faced such problems, particularly in the context of a recent rise in Chinese investment there?
They should not complain, they should cooperate. Today, it’s one great world. Competition is good in free-market. The big companies look for little start-ups in Israel, in India. These two countries today have very good atmosphere for big companies in the world. That (rising Chinese investment) is something that the whole world has to confront. There are many critics within Israel. For example, our major dairy company, which was a symbol of Israeli livelihood was bought by a Chinese company. There is criticism, it doesn’t go unnoticed. But for the public, this company continues to be the part of our society. We have to be aware that the world is changing. Look how Tata, Hinduja, Mahindra are going international. It’s a more traditional and notional way of looking at things. Maybe it has to do with the idea of not wanting to do anything with others. But buying a dairy company is not a national security issue, it’s just buying a dairy company.
Technological innovation and modernisation has resulted in a number of job losses in India, and the argument made is that the modernisation tends to create skilled labour. Has such a situation been observed in Israel as well? If so, how has it been dealt with?
Israel economy is growing more and more towards services. It’s a continuous trend, and so of course traditional areas like agriculture have been neglected so to speak, but they have been complemented by the fact that these traditional disciplines have become more involved with technology. So people are less needed, and those who are available are diverted towards high-level technology. Those involved with agriculture would feel the difference. But does it affect the economy? I don’t think so. Because the economy knows how to calibrate itself.
For a country like Israel, which is extremely conscious about national security issues, how crucial is it that innovation comes from within?
As a country that has been encircled by enemies, we impose on ourselves very harsh policies for self-sustenance in security. Is it enough? No.
But sometimes a joint-development with other countries, and India is one of them, puts another proportion to the development. If you develop a system for which the market created by our services and army is very small, then there is not a good economic model. So we need partners, and we have partners around the world. Self-sustenance is important, but we need to have partners.