Many leading multinational corporations have established a presence in Israel, recognizing the country's technological strength, and seeking to tap into it as a resource could affect their competitive nature and bottom line (ex. Microsoft, IBM, Citi, HP, Google, Apple, GE and many others).
The advantages offered by the Israeli market are not limited, however, to the world's largest companies. In the competitive global marketplace companies survive and grow if they generate a profit, which is greatly affected by their ability to create a competitive advantage. According to Paul Nunes and Tim Breene (Harvard Business Review "Reinvent Your Business Before It's Too Late, January 2011), companies "invest most of their energy managing to the contours of their existing operations… and not nearly enough energy creating the foundations of successful new businesses. Because of that, they are left scrambling when their core markets begin to stagnate."
Israel is not the only place on earth characterized by innovation, but it is certainly unique. The multitude of factors that have come together in this small piece of land have created an environment that stimulates the production of ideas, which more often than not, represent a shift from the common or expected path of growth in many industries. A German researcher I once spoke with told me that he enjoys visiting the Weizmann Institute of Science in Rehovot, Israel because he feels there's always a "high level of activity and a drive to create." In a Forbes article ("What Are The Secrets Behind Israel's Growing Innovative Edge?" November 7, 2013) Dr. Yoelle Maarek, head of Yahoo! Labs Israel, "compared her experiences teaching in France, the U.S. and Israel, and said Israeli students are the most eager to learn."
Companies of various sizes that wish to compete in the long run must continuously innovate, and more importantly – recognize that they cannot always do so on their own. Innovation, particularly which most greatly impacts growth typically comes from outside of the organization and not from within. Companies should therefore explore ways to maintain close contact with the sources of innovation so that when an attractive idea is found, they could quickly tap into it through investment, acquisition or partnership.
Maintaining close contact with the sources of innovation is not an easy task, since it isn't always clear where the innovation will come from. In Israel, for example, great ideas are generated in garages, companies, universities, incubators and hospitals, and are often further developed through unexpected collaborations between different market players. It would therefore make sense for a company seeking innovation to have its ears on the ground through a local presence, scouting for interesting ideas and early stage solutions, and following them as they further develop into young startups or are spun out of established companies. Identifying an idea or product as being potentially relevant to the company is more complex than it appears, since the connection to the potential competitive advantage it could create is not always direct or clear at first, and it might sometimes have to be modified.
In Israel there are about twenty technology incubators, six major hospitals (and about forty five smaller hospitals), five major universities with technology transfer offices, several leading research institutions (including the world renowned Technion and Weizmann Institute), and almost 5,000 technology Startups. There are government offices (such as the Office of the Chief Scientist), organizations (such as the Israel Export and International Cooperation Institute, Chambers of Commerce and regional development organizations), Venture Capital firms, and private investors. These various groups play important roles in the development of the country's hi-tech industry, and should be tapped into if creativity and innovation is sought.
Ilan
Ilan Friedman
ilan@ncompas.net
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