1. Clean Energy
I am very skeptical on the whole clean tech space from a VC perspective. In fact, given capital shortages in Israel, I am skeptical that we can gather enough capital to drive cleantech innovation at the start up level in a massive way. But energy is an enormous economic catalyst and a big strategic issue for Israel in the region so we should use our advantages as a country to lead here. We need to do this by attracting big and small companies alike to try their innovations here and train our people in the skills needed to build a green collar economy. That is a growing and exportable skill set that is required globally.
We have abundant sunshine, ports, tourist attractions and a willingness to try new ideas. So, let's turn Eilat or Sderot into the first city in the world to be powered entirely by clean energy. Each of Eilat and Sderot would have national and economic benefits if chosen and both have abundant sunshine. We should invite American, Chinese and European companies to the world's first clean city to innovate their clean energy technologies at scale for running a modern city. And, we must invite Israeli innovations (in a preferred and funded way) to beta test there as a way to give them exposure to well funded and well-entrenched market partners and to give them advantages by letting them try innovations at scale. It is a way around our capital shortage and would catalyze and galvanize world leaders in innovation to take part in the first clean city. We could set up an offshoot of Ben Gurion University that would be a faculty for clean energy studies in Eilat or Sderot that would bring academic innovation as well. That will complete the cluster. With a little vision, this would attract world interest and help us lead in scaling clean energy to the needs of cities and it would put lots of Israelis to work and help them learn the skills of this emerging economy, much of it on the Euros and Yuan of foreign companies.
The closest thing to something as bombastic, patriotic and bleeding edge as this, is Project Better Place and I think it has done a lot of good for the country. Shai Agassi has brought over $300M in investment into our economy at a time when local venture capital is shrinking. That is what Big Hairy Audacious Projects do. They capture imagination and attract investment in a way venture capital is not doing right now in Israel. I do not know whether Better Place the company will succeed but on a national level it has already succeeded in training people in electric vehicles and attracting global attention to Israel the innovator. The Government should jump start a BHAG project like this Clean City idea.
When the army broke down in the second Lebanon War, Chief of Staff Gabi Ashkenazi and team poured billions of shekels in to get the wheels moving on training and now we have a much better-prepared army. We need a 5 Billion Shekel-plus project on the cutting edge of technology and scale like a clean city. That will get the wheels of innovation greased and attract world-leading companies to Israel. Again, remember that our first wave of tech success was helped by attracting growing leading tech companies like Motorola, National Semiconductor and Microsoft to Israel.
2. Cloud Computing
I hope we have not missed the boat here. The internet is here to stay and we need to get up to speed and scale quickly. Let us declare Israel the cloud computing center for this region of the world. We can lure Amazon and Google to build massive cloud data centers here with matching money and tax incentives. Maybe it is not too late to get Google to wire the entire country with broadband. The debate over whether to give Intel a $100MM grant or $400MM grant is an argument over one company and one city that has some tentacles into that city. The same $400M grant, matched by Google and/or Amazon would be the equivalent of building a railroad across our country. It is infrastructure that fundamentally increases our national competitiveness. We should invest in more underwater cables to expand bandwidth and not just leave it to the blessed initiative of the Borowitz's underwater cable. We could build multiple facilities in different parts of our tiny country affording Google and Amazon an easy way to manage this from a central location since the drive would not be far to any one data center. This would jive with the government's current initiative around financial innovation, all of which will move to cloud computing in the future.
As part of this move to the Cloud, we need to jump start some other initiatives to make sure we can support it. We need a MASSIVE government training program that will train Haredim, Dot-net engineers, out-of-work engineers and lawyers in the computer languages and architectures of the future such as C++, Ruby, PHP, Java and cloud computing architectures. We can do it through the universities by subsidizing courses in new languages or we can give tax credits to companies who train engineers in these technologies and employ people in those languages but, clearly, the government needs to pay for it. We can encourage Google, Amazon, Salesforce.com and Facebook to Israel to also open development centers and we can subsidize the cost of their engineers as they train our fantastic talent in web scalability and simple design. The engineers and people deserve this and our economy needs it. Zuckerberg, Benioff, and Brin are all Jewish and have all been here. We should help them employ our people and teach our smart engineers cloud computing and scalability.
To help our shift to the cloud and scalability, the Government should mandate that 50% of government and army computing must be off of Microsoft platforms within 3 years. Another way to say this is to suggest that 50% of the government and army computing initiatives should be on Open Source software and cloud based architectures within 3 years. Either or all of Amazon's Cloud, Google's Cloud or IBMs would be fine. This would make a statement. And, like our state-of-the-art computerized health care system, this will make us a bold global leader who can help change the planet's biggest challenge: healthcare costs and e-government. Based on everything I said above, this should be obvious but without a legal whip, I fear that typical government inertia will take the day.
In the comments below, I hope we will have a discussion on the role that mobile innovation could play in Israel and how it ties into cloud computing.
3. Agriculture
While on the subject of doing well while doing good, we actually do that already in one sphere: agriculture. We are a world leader in agricultural technology and desalinization in an era during which the world is concerned about how we will feed the world's population and where they will find water. As my friend Douglas Gayeton says, "Israelis are the world's best at making the most out of scant resources and this is the cornerstone of sustainability." We should make Israel the world center for sustainable agriculture and sustainability in general. We should re-fund the Volcani institute and the universities' agricultural faculties and make investing in food technology and water technology a national imperative and a national focus. This is awesome, important and will be a highly lucrative industry in the 21st century. This should not be a $10MM fund but a $500MM national commitment to retool world food production and water resources from Israel. As an aside, our core exports to one of the fastest growing economies in the world, Brazil, are agriculture technology and chemicals (many of which are also used in agriculture).
There are budding initiatives in the Sustainable Agriculture and organics space but we need to push the envelope both in technology and marketing and I think sustainable agtech and practices will make us a central linchpin in the 21st century global economy. This is doing well while doing good and we should lead in this sector. We are a healthy-living society relative to the rest of the world and before Mcdonalds spreads its wings much farther here, we should lead the world in better food and sustainability. We could export our knowhow to other countries and regions of the world which may also have a positive geopolitical impact for Israel.
To scale some of these initiatives we will need to aggressively recruit the best brains and management talent we can from anywhere in the world. Israel is one of the best places to live on earth. We have the greatest people and minds in the world in a tiny country with varied climate and a great outdoor lifestyle. As an Oleh from New York, I can tell you firsthand that it is a wonderful place to raise a family. We should not be apologetic in pitching the virtues and values of Israeli society and the quality of life people enjoy in Israel. If you are a night owl or beach-goer, come to Tel Aviv. Like the desert? Try Omer. Want to try your hand at ranching or savor the mountain views, the Galil is blossoming. Prefer something a little holier or family style, try Jerusalem. Something more American, English or French, try Bet Shemesh or Modiin and do not forget the lovely Caesarea. Everywhere you go in Israel, you meet people who are passionate and determined. The entrepreneurial spirit burns in the all the people here and you can feel it in the streets or on the beach. If we bring the best talent to Israel we will enhance our national competitiveness, our gene pool and our economy and we can do it.
While the world is reeling in economic crises, we have a unique opportunity to increase our national competitive advantage in technology given our reasonable economic stability. To paraphrase Warren Buffet, "When other countries are fearful, we should be greedy." Therefore, what is clear is that we need a focused government action to grease the wheels of innovation and jolt our tech economy into the next century. It must be strategically focused so we do not squander taxpayer money as the government has done for the last 10 years. It must be massive so it does the trick and it must be forward thinking so we do not miss the boat. Done right, it will open the spigots of private investment that will flow into the country like Project Better Place did and we will lead the world in building the 21st century's Capitalist Economy for the betterment of Israeli and Global society.
These are just some brief ideas and I hope you will add more below. This is a crowd-sourced document so please contribute.
