I recently joined 50 business, technology and investment community leaders on Toronto’s innovation trade mission to Israel led by Mayor John Tory. (Montreal Mayor Denis Coderre was also on a similar mission at the same time).
We toured accelerators, universities and multinationals, hearing from entrepreneurs, venture capitalists and business leaders. Our mission was to learn how government interventions have facilitated the growth of Israel’s technology sector, to promote and forge business ties and bring best-in-class practices to the Canadian technology ecosystem.
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Israel’s impact through innovation is rapidly escalating. Israel has the largest density of tech start-ups in the world. Here are a few key lessons I brought back to Canada with me:
1. Don’t be afraid to take risks.
Israelis take risks and embrace failure, which breeds innovation and resilience. In 2015, $4.5 billion(US) was invested in Israeli startups. In Canada, the number was about half. Their population is eight million; ours is 35 million. We need to learn to take risks, and not fear failure – and we must ingrain that mindset in our children.
2. Galvanize grit in our entrepreneurs.
Israelis are uniquely oriented towards success with a unique combination of persistence, innovation and execution. Compulsory army service plays a significant role in developing this approach.
Arming Toronto’s 4,100 startups, 200,000 developers and 50 incubators and accelerators with the mindset and opportunity to develop these skills through programming will set a course for excellence.
3. Do it now.
During the trip, I met the founders of a company that offers accredited global investors opportunities to co-invest with prominent angel investors in Israeli startup companies through a crowd-funding platform. When I suggested we follow up on our meeting, they responded, “What time should we talk tomorrow?” Lesson learned – do it now.
4. Develop science and tech education.
Israel has developed a STEM (Science, Technology, Engineering and Mathematics) education system for its youths – throughout all stages of development – preparing them for the new world economy. Israel understands that a new generation of STEM excellence is essential, creating talent to drive Israel’s high-tech industry and economy through the coming decades.
Michael Eisenberg, one of Israel’s top venture capitalists, explained that Israeli high school graduates are already developing as skilled future high-tech talent and business leaders with serious expertise in engineering – and that’s before they even enter the army, where many of them learn additional STEM skills.
READ: MAYORS’ MISSION TO ISRAEL CALLED A HUGE ACCOMPLISHMENT
5. Government must foster private sector innovation.
At all levels, the Israeli government supports innovation, offering many support programs for research and development totalling $400 million (US) – meaning 4.3 per cent of Israel’s GDP goes toward R&D. Israel’s tax laws and government investment policies are friendly to foreign companies, who benefit from a corporate tax rate of only 10 per cent and investment grants of up to 24 per cent, which has directly resulted in a bevy of multinational corporations setting up shop in Israel. There are over 7,000 companies, 250 R&D incubators and 80-plus Fortune Global 500 companies with R&D centres in Israel.
Multinational corporations and government support is critical, providing a forum for hands-on learning for tech professionals and creating an entrepreneurial ecosystem. There are also numerous, nimble government supported programs related to capital and talent – key drivers for industry success. Even a municipal library has an incubator/accelerator built in. Just imagine if we did that in Canada.
Israel’s community of tech experts who collaborate and advance together provides a model for Toronto. We as leaders in the non-profit segment of the ecosystem, in addition to our tech corporate industry leaders, all play a role. Israel is the example to follow. Together let’s make it happen.
Jodi Kovitz is the CEO of AceTech Ontario.