From start-up nation to the solution nation

The attacks on innocent Israeli citizens by the terrorist group Hamas were motivated not because Israel has been making enemies in the region, but because Israel has been making friends. The Arab world, from the UAE, to Qatar, Morocco and even possibly, Saudi Arabia, have realised the economic potential of forging strong ties with Israel and bringing a peaceful business environment to the Middle East and North Africa (MENA) region. And peace in the region with Israel is Hamas’s biggest nightmare. 

It’s no surprise that even the Saudis are thinking this is the right option. After all Israel is an amazing economic story, against all odds. After all, Israel is a sophisticated place. It’s highly educated, has an amazing commitment to innovation, R&D and scientific discovery. Its education system is world class, and it has an entrepreneurial culture and a well-developed venture capital industry. And it’s done all this while not being able to do what most countries can do, trade with its neighbours. 

Israel is known as the start-up nation (and as result was chosen as one of the Australian Government’s ‘landing pads’ for start-up businesses around the world) but it is increasingly known as the solution nation. The first Prime Minister of Israel, David Ben Gurion had a vision that Israel, with no natural resources to speak of and with 65 per cent of the nation’s land mass being desert, could instead ‘heal the world’ by providing solutions via Israeli technology and know-how. And you see it every day whether in Israel or at home. From mobile phones to flushing toilets, they all have some Israeli innovation embedded in them. At my university, the University of Technology Sydney (UTS) you can find Israeli technology everywhere (in desktops, laptops, notebooks, anti-virus software, etc.) not to mention all the anti-disease and disaster relief Israeli innovation in our health and medical sciences areas (Israeli medical scientists and healthcare companies have helped tackle diabetes, HIV-AIDS, Parkinson’s disease, MS, Alzheimer’s, epilepsy, glaucoma, and other of the world’s health problems). 

The Australian Trade and Investment Commission (Austrade) has a strong presence in Israel with offices in both Tel Aviv and Jerusalem where a new Australia Trade and Defence office has been established. In addition to its inward investment efforts in Israel, Austrade also helps Australia start-ups through one of its “Landing Pad” facilities in Tel Aviv.

In fact, it was in Israel that I took my first drive in one of the world’s first ever electric cars. It’s at the forefront of technological innovation to deal with climate change. And as a result, there are many sectors emerging between Australia and Israel. Medical technologies, smart cities, smart mobility, cyber-security, agritech, as well as environmental sciences in areas such as agriculture as and water management as both countries have many arid regions, face difficult water management issues and are basically dry countries.

Tanya Oziel, of the Trans-Tasman Business Circle, has been leading delegations to Israel for 25 years agrees: “Israel’s drought busting technology is being used in California and Africa so why not Australia?

She adds that Israel’s irrigation technology has been important to Australia’s agriculture and viticulture industries. “The Australian wine industry has been greatly enhanced by Israeli irrigation drip technology – 95 per cent of the industry uses it and when I took Paul Simon and Woolworth’s team on a mission to Israel some time ago, they couldn’t get enough of how Israel treated its crop of cherry tomatoes. So now the cherry tomatoes on your supermarket shelves in Australia are Israeli influenced!” she said.

My Grandfather used to say: “Jesus saves but Moses Invests!” and the Australia-Israel economic relationship is not just about trade but also investment. The Australian interest in Israel has also influenced two-way investment and the interest of the Australian Stock Exchange (ASX) under the dynamic leadership of Max Cunningham, a passionate supporter of the bilateral relationship and regular visitor to Israel.  He says: “We have had 17 Israeli companies listed on the ASX, as they see it as a good alternative to NASDAQ. Their capacity to embrace innovation and technology and move quickly to find real business solutions is world class.”

Australian companies have also moved fast and successfully in Israel and helped contribute to the peace process. A good example is Cochlear, which manufactures ear implants. A team of Israeli and Arab physicians enabled many Palestinian Arab children from the West Bank and Gaza to overcome deafness after undergoing Cochlear implant surgery at the Hadassah Ein Kerem hospital in Jerusalem. 

In conclusion, for a land that was once desert and that has always been under siege, Israel has made some amazing technological advances in agriculture, water management, and R&D in a very inhospitable environment. They have great linkages with universities, venture capital, and a thriving start-up scene. They have an amazing stock of human capital through immigration and links to the great Jewish diaspora around the world (including 32 Nobel Prizes in Economics thanks to Claudia Goldin’s well-deserved win this year). 

For a place that can’t trade (much) with its neighbours and has an arid dry climate, it has done amazing things economically. Now just imagine if it can do full-scale business with its Arab neighbours, it will be unstoppable. And that really will be the end of Hamas.

Tim Harcourt is Industry Professor and Chief Economist at the Institute for Public Policy and Governance (IPPG).