What would an Israeli-designed car look like? For one thing, it would have a special gear that stops the car abruptly and opens the passenger window when it detects a friend of the driver standing on the sidewalk, so they can have a chat oblivious to the other cars stuck behind them. It would have foamy tires to ensure a smooth landing after driving over speed bumps at 90 kilometers an hour. Top models would feature advanced collision-attribution technology that ensures that no matter how badly you drive, the accident is always the other person’s fault. They would also have exterior speakers so pedestrians and other drivers can enjoy the music you’re playing at full volume without the need to open the windows.
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Dream on. That kind of car isn’t going to be in any showrooms, but the fact is, an Israeli automobile industry is actually taking shape without any giant assembly lines or legions of blue collar workers.
Automobiles, and the industry that makes them, are rapidly being remodeled to look more like personal computers and cellphones. Hardware like the body and engine are becoming commodity products while the real value is increasingly coming from a vehicle’s software and networking capabilities.
Startup Your Engines Nation
Self-driving cars is the technology that’s leading the change and that’s where Israel is suddenly becoming Startup Your Engines Nation.
If you take industry claims at face value, the first autonomous vehicles could be on the roads within five years. Just this week the U.S. government significantly backed the technology by adopting its first safety standards for it.
Israeli startups have expertise in some things needed to develop next-generation cars – artificial intelligence and machine learning, image and video recognition technology, 3D sensing, mapping and cyber-security.
Mobileye, whose collision-prevention technology is rapidly morphing into the basis for autonomous cars, is the biggest and best-known of the companies in the Israel industry. They're doing everything from developing anti-hacking technology for networked vehicles and finding ways to exploit the big data being generated by networked cars, to creating ride-sharing platforms and working on advanced-battery technology for electric vehicles. But they do not have the engineering skills necessary to build a car.
Feeding the beast
Theoretically, multi-billion-dollar car companies and the giant research and development budgets and teams of engineers should be leading the way to the self-driving car. But as the experience of the last 20 years has shown, startups are more agile and anticipate trends better than giants. So the giants, like Ford, General Motors and BMW, are buying Israeli startups, or partnering with them, and, in GM’s case, operating a local R&D center.
But there's a snag: the trends in Israel do not support development in this direction.
The changes in the automobile industry attest to the emerging new global economic order.
In the 20th century, car manufacturing was the epitome of industrial civilization. The sector was a huge user of steel, rubber and other goods. It employed millions, changed the way everyone lived and worked, and was at the forefront of technological innovation. A country with an auto industry was a country that had made to the top of the world economy.
That’s changing: Cars are still rolling off production lines but the industry will be much more dispersed, with technology created by startups in automotive backwaters like Israel playing a fundamental role.
We’re sitting pretty. A half a century ago, Israel tried to have its own automobile industry, putting out a line of fiberglass cars (whose parts were legendarily considered delectable by camels) like the Sussita and Sabra before going belly up. It was hopeless because Israel was too small a market and too industrially underdeveloped to stand a chance. The Israeli character isn’t suited for the discipline of a big industrial organization; he or she feels more at home in the endlessly disruptive world of high tech.
This is all well and good, except that you need engineers and scientists to keep the innovation going. Israeli schools aren’t teaching enough math and science, and what they do teach, they teach badly. The number of Israeli university graduates in engineering and other relevant disciplines isn’t keeping pace with the job market. Large swathes of the population – women, Haredim and Arabs – don’t even consider high-tech careers, whether because they are unwelcome or because they are undereducated. The Israeli tech industry is suffering an increasingly severe labor shortage.
The 21st century auto industry doesn’t need steel. It does need people and we risk losing out on a big opportunity if we don’t have them.