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Global Hotbed of R&D


Global Hotbed of R&D


China, Singapore, Korea and the US are all scrambling to set up R&D centers in Israel. They're also eager to uncover the country's latest technologies and poach its brightest talents. What puts Israel at the forefront of science and technology?



Global Hotbed of R&D

By Fuyuan Hsiao
From CommonWealth Magazine (vol. 549 )

It is very quiet at the Weizmann Institute of Science in Rehovot, about 20 kilometers south of Tel Aviv. Only the sound of footsteps reverberates through the visitor center of the institute, which has produced three Nobel laureates. Then, suddenly, Mandarin-speaking voices break the solemn silence as a delegation of twenty or thirty Chinese visitors in dark suits floods the center's multimedia exhibition hall like a black tide.

On an average day, the institute receives more than 100 visitors from around the globe. They are not here for entertainment or sightseeing but for a glimpse at Israel's highest-level research institution.

In late May, Chinese Vice Premier Liu Yandong came with a 300-member entourage to visit the Israel Innovation Conference (MIXiii) at the Tel Aviv Fairgrounds, the first such event bringing together the biomedical and industrial R&D sectors.

During her visit, Liu and Israeli Prime Minister Benjamin Netanyahu signed a memorandum on the establishment of a joint bilateral committee to expand innovation cooperation between their countries. Liu announced that Beijing would invite 100 faculty members and students from Israel to visit China. In the coming five years, China will also send 500 students to study in Israel, while offering 100 scholarships for Israeli students to study in China.

Subsequently, Beijing's Tsinghua University and Tel Aviv University signed another memorandum of understanding, agreeing to invest $300 million to establish the joint XIN Center as an international hub for scientific and technical innovation in biotech, energy, water and environmental technologies.

China's efforts to gain a foothold in Israel's innovative academic institutions and high-tech industry have been increasingly eager and swift.

China Poaches Israeli Engineers

Yokneam is a high-tech hub outside Haifa, known as Israel's "Startup Village." Five years ago, Hiwin Microsystem Corp. from Taiwan bought up a Yokneam technology company, Mega-Fabs Motion Systems Ltd.

Kou-I Szu, Hiwin's senior executive vice president, related to CommonWealth Magazine that the CEO of Mega-Fabs once showed him the help-wanted ads in a local newspaper: Large Chinese corporations such as Huawei and Xiaomi were offering even higher salaries than Internet giant Google, luring away Israel's engineers with lucrative compensation packages. Several hundred Israeli engineers are already working for Chinese companies.

Yet China counts among the latecomers. Others such as Singapore, South Korea and the United States got in on the act much earlier. They began to tap Israel's brain pool aggressively two decades ago.

A drive southward from Haifa, Israel's third largest city, along the Mediterranean coast takes you to the Matam Industrial Park, the Mecca of Israel's high-tech industry. Almost any multinational high-tech company you can think of, from Intel and Google to Microsoft and Philips, have set up a presence here.

They have come to Israel to set up R&D centers, dispatching "eyes" to see the most advanced technology in the world, according to Doron Hemo, head of the Economic and Trade Mission at the Israel Economic and Cultural Office in Taipei. Holding up his mobile phone, Hemo declares proudly "Inside here, most of this is Israeli technology."

The world's largest chip designer and manufacturer Intel was one of the first to take advantage of Israel's technological edge, which helped turn Intel into a dominant supplier of microchips for personal computers. Intel's first PC microprocessor, the 8088, was developed by Israeli engineers at Intel's Haifa laboratory and introduced in 1979. It was used as the CPU in the original IBM PC.

To date, Intel has invested in almost 70 companies here, becoming the largest private employer in the country. Intel accounts for one fifth of Israel's total high-tech export value.

A Scientist's Office = Singaporean Consulate

Singapore, often dubbed the Israel of Southeast Asia, not only relies on Israel to boost its military prowess, but also knows how to make good use of Jewish brainpower.

Yehoshua Gleitman, the former chief scientist with Israel's Ministry of Industry and Trade, is an important promoter of Israeli technological innovation. When interviewing him on the sources of Israel's innovation, CommonWealth Magazine discovered that Gleitman has been Singapore's honorary consul general in Tel Aviv for more than a decade.

"What do you think this place is? It's the consulate general of Singapore, right here," Gleitman exclaimed. Gleitman frankly calls Singapore's decision to pick him as consul-general a smart choice. "Who could know better than me how to establish relations, how to use Israel?" the scientist asks.

Singapore began to cultivate Israel strategically as an R&D source some 17 years ago. The Singapore Economic Development Board and the Office of the Chief Scientist in Israel have set up the Singapore Israel Industrial Research and Development Foundation (SIIRD) to promote and fund joint industrial R&D collaboration between companies from both sides, and develop advanced technologies across different industries. SIIRD provides funding of up to US$1 million (about NT$30 million) for the R&D portion of joint development projects.

This February, an SIIRD-funded collaborative project, the world's first fuel cell-powered tactical unmanned aerial vehicle (UAV), made the headlines. The UAV, which was designed and manufactured by BlueBird Aero Systems Ltd. in Israel and incorporates a cutting edge, ultra-light fuel cell power system from Singapore's Horizon Energy Systems, set a new endurance record for commercial mini-UAVs with a flight time of more than ten hours. Israel has long been a world leader in unmanned aerial systems. But who would have thought that Singapore, known as a regional financial hub, would be able to develop a fuel cell power kit for a UAV?

As the South Koreans make their mark around the world, they are naturally setting up shop in Israel as well.

Maya Chen's Jewish parents immigrated to Israel from Georgia when the country was still part of the now defunct Soviet Union. Upon graduation from the University of Haifa, Chen won a scholarship to pursue a master's degree in Taiwan. That is where the young woman, who sports a white suit and a shock of eye-catching curly red hair, learned to speak Mandarin fluently. Chen has launched her own business in Taiwan, acting as a broker bringing together Taiwanese and Israeli companies. Given that countries around the globe are courting the innovation powerhouse Israel, Chen is eager to help Taiwan catch up to its Asian rivals.

Chen observes that South Korea sent technology scouts to Israel as early as 20 years ago. In recent years, electronics giant Samsung has frequently dispatched employees to Israel for long-term assignments to make sure it remains at the forefront of technological developments there.

Samsung in Israel for the Long Haul

"Taiwan came so much later than China and South Korea," says Chen. "You really have many technology revolutions here that deserve attention."

Five months ago, the Korean Federation of Small and Medium Business sent 15 promising entrepreneurs to Israel for half a year of training. They are being mentored by Israeli teachers and work as interns in Israeli startups, cultivating their entrepreneurial spirit.

The South Korean government is also keen to import cutting-edge talent from Israel.

At the Israel Institute of Technology (Technion) in Haifa, a room in the Faculty of Medicine barely 20 square meters in size is sparsely furnished, with only a desk and four chairs. On top of the desk sits a notebook computer and two 37-inch LCD monitors. The bookcases along the wall are stuffed with model cars and antiques. On the wall hang two paintings of Noah's Ark and numerous photographs, including portraits of the Pope and Taiwan's President Ma Ying-jeou.

This room, which resembles a storeroom of toys, is in fact the office of Aaron Ciechanover, who won the 2004 Nobel Prize for chemistry. Ciechanover, who trained to become a physician but opted to pursue a career in scientific research instead, shared the Nobel Prize with two other scientists for their joint discovery of the mechanism by which the cells in most living beings degrade and recycle unwanted proteins using ubiquitin, a regulatory protein. The ubiquitin system has become an important platform for the development of drugs that fight cancer and other diseases.

At the invitation of the South Korean government, Ciechanover will be in charge of the country's centers of excellence program for two years starting in January this year. Ciechanover will spend 60 days per year in South Korea lecturing at senior high schools, universities and companies, to cultivate elite scientific talent. Ciechanover, who has just returned to Israel, is slated to leave for China and Spain a week later. His schedule is fully booked until the end of next year.

If international rankings are taken at face value, it does not seem to make sense for the industrialized countries to compete with one another by way of Israel.

Globally, Israel ranks 27th on the World Economic Forum's 2013-2014 Global Competitiveness Report, lagging behind Taiwan, and even farther behind Singapore, South Korea and the United States. So why are the advanced countries scrambling to learn from this straggler?

They are able to see Israel's hidden value.

Taking a closer look at the various competitiveness indicators that make up the overall rankings, Israel's competitive edge becomes patently obvious. The small country ranks third in capacity for innovation, just behind Finland and Switzerland. It ranks sixth in number of patents, and eighth in ease of access to venture capital. Next to the United States, Israel provides the easiest access in the world to both technology and funding.

"Israelis can't stop. We're always looking for new things to explore," remarks Ciechanover. That is a character trait that is very rare in East Asian society, yet it is extremely important for innovation, the Nobel laureate observes. Transplanting Israel's pioneering spirit into Asian countries, to be paired with Asian culture of strong execution makes the ideal match, he opines.

Eddy Jeng, a vice president with China Development Industrial Bank (CDIB), has ample experience analyzing Israeli venture capital. He points out that there is no cultural gap between Israel and Europe or the United States. As a result, Israel can serve as a bridgehead between the Western world and Asia, while Asian nations can use Israel to capture European and North American markets.

Chinese companies have noticed this bridgehead.

In late May, Shanghai-based food manufacturing company Bright Food Group bought up Israeli milk and dairy products cooperative Tnuva at a high price of more than 10 billion renminbi.

Wei-ning Weinberg Wu, a Taiwanese teacher who lives and works with her family in Yotvata, a kibbutz and major dairy producer in southern Israel, believes that Chinese food concerns are establishing footholds in Israel to gain easier access to the European market.

Translated from the Chinese by Susanne Ganz