Opinion

Why India Loves Israel: For Its Brains

Warming bilateral ties aren’t based on traditional markers like trade and politics but on Israel's innovative prowess, which has become a valuable diplomatic asset. Alas, Israel is at risk of losing it

Indian Prime Minister Narendra Modi performs yoga on International Yoga Day in Lucknow, India, June 21, 2017.
PAWAN KUMAR/REUTERS

Not a lot of Israelis are paying attention to the fact that Indian Prime Minister Narendra Modi will be visiting Israel next week, and the minority who are, must be wondering why.

India is not a player in the Middle East, apart from being a big importer of Saudi and Iranian oil, and Israel in certainly not one in the subcontinent. India’s trade with Israel is not only negligible, it’s been shrinking. The sum total of Indian investments in Israel are the equivalent of a single moderately sized fundraising round by a startup. Modi has no Jewish voters back at home to impress with a photo op with Bibi.

Yet Modi is not only spending two days in in Israel, he isn’t troubling himself to pay a symbolic side trip on the Palestinian Authority in a nod to diplomatic balance.

But then again, it might be fairer to say that the Indian leader isn’t visiting Israel either. He's visiting Startup Nation.

Cold war with Pakistan

Like China, India looks at the Jewish state as a valuable partner because of the technology and innovation it can provide. And that is part of a larger phenomenon of brainpower is emerging an important asset in world power politics, taking its place beside naked armed force, economics and the soft power of culture and values.

By that standard, Israel is a force to be reckoned with. As Prime Minister Benjamin Netanyahu himself put it earlier this year, “This is what makes us a significant player in the international arena, despite our size.”

We’ve felt the power of technology and innovation in our relations with China for a long time. Chinese companies are major investors in Israeli high-tech, perhaps accounting for a third of the money now being put into startups. Israeli and Chinese universities have formed joint programs. Israeli technology is being employed across China to in areas like brain sciences, nanotechnology, 3-D printing, biomedicine, renewable energy, computer sciences, the aging of the population and smart cities.

China has daunting problems to overcome in water usage, energy conservation, the environment and health to name a few. At the same time, it’s determined that its companies do more than assemble goods and copy products developed elsewhere, and become technology leaders in their own right.

In India, the situation is a little different, but the core of its relationship with Israel is innovation as well.

India’s first problem is national security and its cold war with Pakistan, and for years Israel and India have had close defense ties. But these are based on technology, not raw power, i.e., Israel doesn’t sell tanks and planes, but provides advice on counterterrorism and most importantly, it has been selling India high-tech weaponry.

Now the relationship is focusing increasingly on the civilian side. The cabinet this week approved a series of measures and a 280 million shekel ($80 million) budget for joint research and development mainly in water and agricultural technology programs  It also talked about increasing exports by 25% and luring more Indian tourists and even Bollywood producers to Israel, but that is small change compared to the tech relationship. Tech is the basis of our beautiful friendship.

India is behind in China in terms of its global aspiration, but Modi is a free market, tech-friendly leader as much as he is a Hindu nationalist and he wants to see India become a world economic superpower. It’s one of the world’s largest economies, but that’s because it has a population of 1.3 billion, not because Indian products and services make a big splash in global markets.

Even its vaunted high-tech sector is centered on outsourcing to foreign companies. Like China’s Xi Jinping, Modi recognizes that Israel can help change that.

Brainpower drain

For both countries, Israeli brains are important, but so is Israel’s willingness to share them.

We have no pretense of being a great industrial power. Thus a lot of the best tech we develop, like self-driving cars, is available for whoever wants it.

Vis-à-vis India, Israel has won a lot of defense business because it is open to joint ventures and co-production with Indian companies.

America, another big source of innovation, is leery about China getting ahold of critical technology for business, including for security reasons, and also is cracking down on Indian tech contractors.

But here we come back to the same old problem of how to make sure Israeli brainpower doesn’t go down the drain, because if it does, we not only lose the engine of the economy but a valuable political asset. “If we cannot innovate we will lose our advantage,” Netanyahu warned at the same time he was lauding tech diplomacy. “And in order to innovate we must have a free market.”

Of course, a free market is critical to ensuring a continuous flow of new startups and new technology, but a lot of Israel’s biggest advances, certainly in defense, have come from the government-owned companies and the army itself.  Free markets aren’t the be-all and end-all.

What is really critical is ensuring that Israeli universities graduate enough engineers and technicians (which they aren’t), that Israel has enough schools that do their job of teaching fundamental skills (which it doesn't) and that Israel fosters a culture of free and independent thinking (which certainly many in the government disapprove of, at least when it comes to politics).

Startup Nation is doing its part in enhancing Israeli power. It’s the government that is letting the country’s most valuable asset waste away.