Written by Mr. Lior Varona, Founder and CEO, Silk Road Group, Israel

Examining the China-Israel relationship over the years demonstrates a strengthening trend of the bilateral relations between the two countries. It is clear for both sides that collaboration between the two would benefit and take them both another step further.

China is a model for a country that made its vision to lead global innovation. China leads the development of infrastructure for an advanced technological environment, and the number of its people’s use of technologies and applications increases every year. In many fields, China is also a role model for global innovation.

Israel is defined by the world and considered itself as the "Start-up Nation." Israel accounts for some standing-out technological developments that have made a positive impact on life quality worldwide. Intel, Waze, Mobileye, Netafim, and inventions like USB drive, dropper, Kinect camera, cherry-tomatoes, citrus squeezers, and more, placed Israel in top of empowerments in terms of research and development scale.

Mr. Lior Varona

Israeli innovation environment and its advantages:

1. High involvement of multinational companies

In the last few decades, over 300 multinational corporations operating in the front of technology choose to establish research and development centers in Israel. Over the years, these multinational companies had purchased over 100 Israeli companies.  Some multinational corporations——Intel, Microsoft, Broadcom, and IBM ——even purchased over ten local companies during theiryears of operation in Israel. Such a busy activity feeds from the many assets of the Israeli innovation system: leading research, skilled workforce, entrepreneurial culture, technological leadership, and a rich and well-connected ecosystem.

2. World leadership in research and development

The Israeli business sector holds around 86% out of the research and development cut, which is the highest among OECD countries and reflects the thriving innovation surrounding the private sector. Also, Israel was ranked third in the Global Competitiveness Report of 2017-2018, weighs parameters such as the quality of scientific research institutions, business sector research and development expenses, academy- industry cooperation, number of engineers and scientists, and the number of patents relative to the population size.

3. Effective governmental economic- support for innovation and technology

The Israeli start-up's active dynamic attracts investors from all over the world and sites in the global technological front giant companies. This activity gave birth to many success stories over the years, both of Israeli start-ups that made a major Capital E (Exit) and of Israeli entrepreneurs who develop a leading and big company based on technologically innovative development. The Israeli entrepreneurs are known for their creativity, high skill, daring, and multi-section thinking.

Today, Israel holds the first place worldwide in the scope of venture capital investment in terms of GDP, with thousands of start-ups operating in it.

4. Minimum regulation and non-intervention of governmental factors

In the Israeli knowledge industries, there is no involvement of regulators or any other governmental authorities. Therefore, it is so successful. Government Senior Officials understand so little on the out-going in the high-tech sectors, so they stay away from it. When politicians stay away from the businesses, the business world finds its way to success, and let companies do what they are best at,—— research and development.

5. Strengthening and growing talents

Organizations have grown and empowered individuals with big dreams, extraordinary vision, and belief in their competence in executing it. These rare individuals are not afraid to challenge the existence and go against the current situation. They are endowing with daring, dedication, and perseverance. They always try to suggest original and creative notion, to think out the box, and to undermine the status quo. They are not satisfied with their existence and try to improve, advance, and reinvent themselves. They always desire to create something exciting, revolutionary, and unprecedented that exceeds the plan, schedule, and organization methods.

6. Encouraging activity and open workshop for sharing information

Companies and governmental agencies who want to set themselves to the 21st century put in a lot of effort. The brainstorming, innovation incubators,and funds meant to validate innovative ideas and to develop trial demos. "Open Innovation" program, allows knowledge, insights, and notions exchange between several companies and research bodies. The companies even invest in designing a unique workspace, encourages innovation and creativity, eases planning validation experiments and building an initial prototype， which meant to test the customer experience and reaction.

7. Founding "innovation outposts."

Various corporations and organizations have founded "innovation outposts" in order to follow the most updated first, innovative technologies in the market closely. Second, invest in attractive ideas and promising startups, located close to revolutionary and advanced developments in the relevant field.

The keys to succeeding innovation companies in Israel:

The key to the success of a high-tech company is not only leaning on the technology advantage，but for and foremost the product definition and marketing. To do that, you must add the right management, proven technology, ready market, and of course, not less important, is the right timing.

The ambition changes the world. Successful entrepreneurs initiating a start-up are motivated by the desire to affect the world, compared to ones motivated only by financial profit or acquiring experience. Meanwhile, every worthy entrepreneur should have a mentor that he can consult within a time of decision making.

Teamwork is essential, and it does work. It has been proven that an individual entrepreneur takes more time to reach the scaling step compared to a team. Founding teams with business tendencies have a higher chance of fulfilling and successfully get to the scaling stage. Founding teams with a technological understanding and technic tendency have a better chance to reach the scaling stage successfully. Balanced team foundation, containing technique entrepreneur and business entrepreneur, raises more capital.

One of the most imperative qualities learned from the Israeli innovation is the constant practice of "patience" ability.

Innovation entrepreneur is a dynamic "profession" that holds in its success and failures, joy and sadness, trying and fulfilling, and a long way that requires patience. Most of the originated start-ups fail at the end of the road, most of the entrepreneurs fail in their first project, but you must not give up. Israelis entrepreneurs are known in their tendency not to waive and move forward to the destination.

Accept and understand that everyone can fail, and everyone can make a mistake, and it's fine to do so. What is essential later is to learn from those mistakes and never to repeat them.

Only good coping and fear ignoring can motivate people to run forward and to achieve. Israelis understand that fear is not an option from the time they were born, and therefore, Israel is where it is, the head of the world technology arena.

Cooperating with China for benefiting all through innovation

In recent years, a meaningful conceptual change occurs among Israeli companies. They covet the East in search of opportunities and to expand their operations in the Chinese market. There are not many companies, and there are still more places to join. In order for the number of companies to grow, these companies must use assistance in the entry process to this massive market.

To Israeli companies, the entering conditions of Chinese market force them to deal with various barriers and difficulties on the road to success: some concerns having a financial-support so to adjust existing products to the Chinese market or to establish activity in China; others relate to the need of supporting and accompanying companies till the end of the shared development period, helping marketing and maintaining a relationship with a local partner; and more barriers associated with helping with Chinese regulation in the fields of intellectual property and specific content like vital work versus Chinese media, craving for innovation stories.

There should not be any reason why Chinese corporations cannot create innovation outposts in Israel. Similarly, there is no reason that large and good Chinese corporations would not settle in Israel, like many other multinational companies, and invest in the Israeli industry. Demonstrating physical presence, which includes good human capital that is located in Israel and time investment, is vital to achieving so, remote control conduct is doomed.

Many studies and articles engage with Israeli innovation and experience that leads Israeli companies to formulate solutions answering global level needs and problems. China can then benefit a fair bit from that. Israeli innovation can be a role model for China in many fields, with the emphasis on the beating heart behind the innovation and renewal processes of organizations.

China-Israel cooperation is only at the beginning of the road. Decision-makers in China as in Israel will deal with not a few challenges in the process.  I have no doubt that both countries will learn plenty of one another, and the ties will strengthen and increase for the better of both nations and the whole world.

Indeed, even a journey of a thousand miles starts in one small step.