What is China looking for in Israel? The main natural resource Israel had left - the "secret" to thinking outside the box, it transpired at the Chinese-Israeli academic/business conference held in Be'er Sheva this week.
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The Red Dragon has been trawling the world for decades to obtain access to commodities. In Israel, China already bought the access to the one natural resource we had, potash (by acquiring minerals miner Makteshim-Agan, renaming it Adama). Now, as forward-looking Beijing upgrades Chinese manufacturing to be smarter, it is acknowledging the importance of an intangible: innovative talent.
China can "buy" talent outside the country by investing in startups: it recently set up its first technology fund targeting Israeli companies. A second way is by persuading foreign companies to manufacture in China. This aspect is exemplified by the Experience Center, which will feature featuring actual products made by actual Chinese manufacturers that Internet-of-Things giant Ingdan is building in Tel Aviv to attract Israeli businesses.
A third way is, evidently, to catch a case of Israeliness.
Not the same story
The Third Global Entrepreneurship and Innovation Conference took place in Israel on Monday, at the Ben-Gurion University of the Negev (the first two GEIC conferences were in China and didn't involve BGU). Its stated theme: “Entrepreneurship and Innovation, China-Israel – Challenges and Opportunities". Its purpose: to jumpstart academic collaboration and joint projects between BGU and the gigantic Jilin University, which is headquartered in Changchung and has 67,000 students on multiple campuses.
The conference was co-chaired by BGU's Prof. Dafna Schwartz of the Bengis Center for Entrepreneurship and Innovation, and Prof. Zheng Li, vice-dean of the Jilin school of Economics.
The 130-man Chinese delegation included academics from Jilin and other Chinese universities, government officials and businesspeople. They were welcomed warmly by former Israeli President Shimon Peres, by video, and BGU President Prof. Rivka Carmi.
"We started to work together and we are not the same size, but we are the same age," said Peres, who by the way is 92. "We are not the same story, but we have the same history and all people that have developed a beautiful culture, created a young republic that creates a new future.”
Carmi chose to draw attention to similarities: “A solid comprehensive relationship with China is one of the strategic goals of the State of Israel and of BGU’s. The people of both nations have much in common, not only our cultures of antiquity but also the great importance we both attribute to education and innovation."
One thing they may not have in common is irreverence. While Beijing doesn't necessarily want the masses to start thinking for themselves in all aspects, they do want the business community to improve its acumen, charisma and, crucially, its innovative thinking and entrepreneurship.
Smarter manufacturing to support aging population
Prof. Dan Shechtman, who was awarded a Nobel prize in 2011 for chemistry and who has also been lecturing on technological entrepreneurship for some 30 years, delivered a keynote address in which he dwelled on the problems the world faces today, such as about 60 million refugees.
Shechtman, who discovered quasicrystals (which are ordered, like crystals, but not periodic, unlike crystals), waxed appreciative of the famous/notorious Israeli penchant for ignoring authority ("thinking independently", some call it) in the context of innovation and entrepreneurship.
He also elaborated on key differences between the demographic development of Israel and China. Israeli women have three children on average. Chinese women, thanks to past population policies, have only 1.6, Shechtman described. This fact alone can help explain what China is looking for in Israel.
If there aren't enough young people to support the aging population, China needs ways to improve its productivity. That will necessarily involve making its manufacturing and development smarter. "Innovation isn't enough," Shechtman explained. "Entrepreneurship is needed too."
In other words, you can guide the horse to water with a smart app but you can't make him drink unless you can sell him the concept, whether he needs it or not.
Remarks by the Chinese representatives were translated simultaneously. "The road to economic recovery is bumpy and twisty," said Prof. Yang Zhenbin, chairman of the Jilin University Council, in his address. “Yet, while global trade is shrinking, bilateral trade [between China and Israel] has increased. A new era of technology and innovation is on the way. Israel is a global leader in agricultural technology, cleantech, military technology and venture capital, while China is a developing country with the largest potential market.”
Prof. Schwartz led the business section of the conference, split into three sessions featuring innovative business models for topics of interest to both the Chinese and Israelis: Innovation in health services, China-Israel collaboration, and past experience and future potential.
Potential? It's there. While Israeli-Chinese mutual trade is not gigantic, China is Israel’s biggest trading partner in Asia, said Ran Peleg, the deputy director of the North East Asia Department at the Israeli Foreign Affairs Ministry. In 2015, bilateral Sino-Israeli trade amounted to $10 billion, and a new 10 year visa agreement was just reached between the two countries, which should help boost trade and bilateral visits, Peleg said.
The conference was also attended by representatives of the Israeli business scene. Not that they necessarily got anything immediate out of it, but veterans of the Israel-China business scene say that forging relationships is key, and take time.
Yosi Lahad of the integration company NextWave Robotics works with both China and certain departments at BGU, he tells Haaretz, and believes that cooperation between Business and Academia can be better and tighter. NextWave facilitates that vision by connecting between client needs and products, he says.
China, which aims to automate a significant proportion of its industry in order to improve productivity, "has very clearly defined needs," says Lahad. "In the area of robotics and intelligence, they need knowledge. The universities have the knowledge, and industry has some too." So China has need and money, academia has the goods and NextWave can marry the two. So was the conference useful? Not to him in any immediate fashion, Lahad said – but it was a great networking opportunity.