Israel's Chief Scientist sets out Canberra's path for innovation
Israel and the ACT are, quite literally, a world apart. However, if we were to consider one prevalent trait between the two regions, it would have to be education.
For the last two decades, Israel has been dedicated to promoting itself as an international centre for education and innovation. Put simply, Israel wants the best minds in the world to set up shop and develop their ideas into global industries.
The numbers speak for themselves. In 2013, their mergers and acquisitions in the high-tech sector attracted US$4.8 billion, while IPOs were valued at US$2.1billion. Impressive stuff.
It’s little wonder then that ACT Chief Minister Andrew Barr is excited by the prospect of some of this success being replicated in Canberra. Barr was a strong supporter of the recent trip to Israel by Assistant Minister for Innovation, Wyatt Roy, and Dr Sarah Pearson, CEO of Canberra Innovation Network (CBR IN). The trip revealed a lot about the investment conditions of the diminutive state, and to see what could be brought back to Australia.
The fact we have five tertiary institutions within our borders is a great start, but as well as a sharp focus on research what else do we need to become a centre for innovation? According to Israel’s Chief Scientist, Avi Hasson, who spoke at CBR IN on Wednesday, what is needed are the two bookends that leverage the most from research: a strong government framework and a culture of investment from venture capitalists and major industry.
In this space, Israel’s achievements cannot be understated. Currently, 50% of the total value of exports is from the high-tech sector. Meanwhile only 10% of the population are participating in the field yet it still yields 20% of GDP. Those final two numbers demonstrate the captivity for increased engagement across other industries to deliver a profound effect on the state’s books.
The key philosophy of the Mr Hasson is that investment in infrastructure to support innovation is vitally important. This expenditure - as well as grants - means that in the early days less risk is assumed by entrepreneurs and venture capitalists. In fact, for the first two years of most companies in Israel, the government provides five out of every six dollars of investment.
Imagine trying to justify that in Australia!
Yet Hasson easily can. Historical data shows that over any ten year period, industry provides five dollars of investment for every dollar originally provided by government. This is a great win for the Israeli economy.
Secondly, if your start-up is going to fail, Hasson hopes that it fails quickly. “The last thing we want to see is intellectual capital tied up in a business that is going nowhere.” Hasson cites Better Place - an Israeli-based company that many Canberrans will know through its attempts to provide a network of electric car recharging stations throughout Australia.
“When they finally collapsed, Israel saw the establishment of 40 new companies through the freeing-up of IP and experienced employees. In a way, the most exciting part of Better Place was its failure.”