Innovation starts when you fall off the edge of the playground

March 17, 2020
Roger Spitz.

When talking about innovation, an abundance of terms spring to mind, including “creativity,” “invention,” “innovation,” “disruption,” “breakthrough,” “design thinking”—but ultimately, success boils down to one simple concept: relevance. Companies and individuals alike survive by becoming, then remaining relevant.

On the back of a recent visit to Israel, I had the honor of presenting to the Foresight Institute in San Francisco on how this tiny country of less than 10 million achieves global relevance in so many fields. I’ve distilled my key takeaways into two parts:

  1. Israel’s “secret sauce” for turning adversity into competitive advantage.
  2. Israel’s frontier technologies—how it will continue to remain relevant.

Reframing innovation: Israel’s secret sauce

Over two weeks in Israel, I met with legendary entrepreneurs, academics, startups, accelerators, technology companies, and investors, as well as elite institutions and ministries dedicated to research and development and innovation. Their innovation is second to none. Here’s how they do it:

1. Start in the playground

Ten years ago, Dan Senor and Saul Singer’s “Start-up Nation,” published the story behind Israel’s economic miracle, resulting in the most startups per capita and R&D intensity in the world. Inbal Arieli, born and bred in Israel, reframes this journey with a local perspective: start young.

Israeli parents give their children agency. They encourage imagination and challenging convention. They teach the chutzpah to experiment and iterate. Failure is accepted—that’s how you learn.

When children are encouraged to bend the world around them, the surrounding chaotic energy turns them into audacious innovation machines. Inbal’s book Chutzpah: Why Israel is a Hub of Innovation and Entrepreneurship even provides a glossary of terms, including “balagan”—“a state of chaos with the promise of opportunity: the key state of mind for children, entrepreneurs, and innovators alike.”

If you’re aiming for innovation, encourage your kids to experience chaos.

2. Reframe education around inadequacies

Israel’s education measures failure, not success. This is a marked contrast to much of the world’s education system, which rewards repeating the right answers to known problems. Israel sees this as silly, believing you don’t learn through questions you can already derive answers to.

Should the rest of the world follow their lead, replacing standardized tests with adventurous experience? Israel’s education prioritizes risk-taking and searching, instilling curiosity and comfort with ambiguity in its students. It’s a tough tactic to practice, but for Israel, the practice of constantly testing constraints provides astonishing rewards.

3. Provide young citizens a critical role in society

Forty-five percent of the Israeli population is under 24, including the majority of elite military units. As a young adult, you’re a trusted leader with real responsibility and forged discipline.

This parity with adults encourages entrepreneurship. In a flat hierarchy, authority isn’t restrictive, meaning anyone feels empowered to do anything.

Steeped in the chaos that encourages entrepreneurship, young Israelis know that revolutionary ideas could come from them—that much more so as they are empowered to break rules and be disruptive. With no formulaic minimum age, their input matters, allowing individuals to achieve miracles at any point in their life.

4. Encourage ambiguity, uncertainty, and complexity

Short-term thinking is one of the greatest threats to civilization. The world is changing at an exponential rate, making change itself into the only constant.

For its entire life, Israel has been in a state of existential threat. Still, it prioritizes innovation—taking a long-term view. Exercising your intuition is needed to help interpret the overwhelming input of signals to properly prioritize in a time of volatility, uncertainty, complexity, and ambiguity (VUCA). Singling out good choices in the VUCA world requires experimenting, improvising, inventing, challenging, and tinkering. Israelis practice these activities from a young age, training their comfort in ambiguity long before other cultures.

5. Seek specialization and beginner’s mind

In addition to deep specialization, Israel boasts a pervasive interdisciplinary approach. They cross-fertilize and multi-task at every level, favoring T-shaped profiles that couple deep expertise with broad experience.

Technology has moved at such a rapid rate that every company must be a technology company. To that end, every company must be “cross-industrial”.

In a world where patterns are hard to interpret, generalists flourish. They can move naturally between disciplines, improving one area through knowledge gained from another.

Cross-pollination creates new combinations, and its value will only increase as the world becomes increasingly complex. Israel combines domain experience with wide-ranging knowledge, creating the fresh prospective required for innovation.

6. Align your institutions

To remain at the leading edge of innovation, Israel has continually invested in long-term institutional support and aligning ecosystems. For example:

  • The Israeli Technology Transfer Office has multiple successes of monetizing academic research, including funding Mobileye (acquired by Intel for $15.3 billion), OrCam (valued at $1 billion in 2018), and ReWalk (IPO in 2014 and which just powered a paralyzed man to finish a marathon).
  • Leveraging on Russian-speaking immigration, academic partnerships and elite corps to create a leading cybernetics and cybersecurity center in Be’er Sheva.
  • The Israeli defense force has built a number of units into quasi-incubators for emerging technologies.
  • MindCET, Israel’s public leader in technological-based education solutions, operates an accelerator on a global scale connecting the world of education, technology, startups, and investments.
  • Israeli career paths offer short-term, flexible options that combine technologists, government and military officers, as well as academics.
  • Israel ranks second in its share of 25- to 64-year-olds with higher education qualifications, a quarter of them in STEM fields.

Where to expect the next groundbreaking innovations

Israeli innovation focuses on critical segments where it has a competitive advantage and the stakes are high. In the coming years, expect continued breakthroughs in the following frontier technologies:

Artificial intelligence. Despite lacking the scale and data of the Chinese BATs (Baidu, Alibaba, and Tencent) or US FANGs (Facebook, Amazon, Netflix, and Google), Israel is a legitimate leader in applying AI to multiple domains, including machine learning and data science, robotics and autonomous systems, IoT and sensors, and distributed intelligence.

At the end of 2018, there were already 1,150 Israeli entities (both companies and research centers) developing AI technologies across its strong verticals (health care, mobility, agriculture, finance, and security).

Israel is taking these developments very seriously: it has tasked two of its top researchers (professors Isaac Ben-Israel and Eviatar Matania) to make Israel one of the world’s top five countries in the field of AI. Where new human capital is to be developed beyond programming and the data itself needs to be treated as a “language” for this secured intelligent systems initiative.

One area of global leadership is AI chips, which will be needed in applications including autonomous driving, computer vision, and speech recognition for intelligent systems to be able to move, perceive and learn. Current Israeli industry leaders in AI chips include:

Quantum. Quantum computing will change the rules surrounding national security. Israel has to be a leader in quantum, if only to avoid the existential threats if its enemies reach quantum first.

Israel invests heavily in quantum, especially in quantum-resistant encryption, cryptography, and machine learning. While most of its research is taking place in academia and with the hyperscalers, keep your eyes on quantum machines—developing next-gen quantum controllers ($5.5 million seed funding in 2018) and which just joined the IBM Q Network—as well as QuantLR which is protecting the next generation of networks with secure, low-cost quantum cryptology for transmitting highly sensitive data.

Digital health and genetic engineering. Israel has more than 500 startups in digital health, with a strong focus on preventative, diagnostic, and predictive analytics tools.

In the coming years, Israel aims to remain at the forefront of breakthroughs in advancing medical cures, drug discovery, gene therapy, genetic engineering, genomics synthetic biology, personalized medicine, cell-based therapies, molecular genetics, and digital therapeutics. The government is investing as well, including a $264 million initiative to combine personalized health and digital records into a unified system.

Many Israeli biotech/health-care companies have IPO’d (most are on NASDAQ). From these hundreds of players, keep your eye on these three:

  • MD Clone—a unique method of sandboxing data so researchers can use it confidentially; cofounder Ziv Ofek built dbMotion, which sold to AllScripts in 2013 for $235 million.
  • Zebra Medical Vision—deep learning-powered medical imaging analytics with investors including aMoon, Khosla Ventures, Johnson & Johnson Innovation and Marc Benioff.
  •—the only FDA-approved smartphone-based home urinalysis.

Cross-pollination. Leveraging Israel’s interdisciplinary model, its frontier breakthroughs increasingly combine multiple technologies:

  • Combining biology with technology, Tel Aviv University scientists recently 3D-printed a miniature human heart, including properly functional blood vessels.
  • Brain-computer interface, Arctop’s AI-based platform constructs a multidimensional map of real-time brain activity. While CorrActions is developing a noninvasive software platform which identifies human intentions to prevent disastrous human-machine interface errors.
  • Israel is a world leader in smart farming, frequently combining such wide-ranging technologies as machine learning, robotics, plant breeding, and genetics.

In the smart farming space specifically, be on the lookout for these companies at the cutting edge:

  • SavorEat, which prototyped the world’s first 3D-printed meatless burger.
  • Future Meat Technologies and SuperMeat, which grow beef and poultry cells.
  • DouxMatok, which enhances sugar and salt flavor while avoiding undesired substitutes.

Turning impossible into breakthrough

Despite the difficulties of remaining relevant, Israel has consistently reframed, redefined, ideated, empathized, prototyped, and experimented its way to the top. This country of only 9 million is leading many tech industries—expect further reinventions in a model where “impossible” provokes breakthroughs.

Roger Spitz is the founder of Techistential, a research and education platform.