Full steam ahead as Israel powers fourth industrial revolution

Israel's technological innovation has turned it into a prominent driver of the fourth industrial revolution, known as Industry 4.0, which is digitizing global production and supply chains.

FEBRUARY 25, 2020 15:53

A robot engineered by Kuka adjusts a windscreen in a fully automated process on a model of the A-class production line of German car manufacturer Mercedes Benz at the Daimler factory in Rastatt, Germany, February 4, 2019. Picture taken on February 4, 2019. (photo credit: REUTERS) — A robot engineered by Kuka adjusts a windscreen in a fully automated process on a model of the A-class production line of German car manufacturer Mercedes Benz at the Daimler factory in Rastatt, Germany, February 4, 2019. Picture taken on February 4, 2019.

(photo credit: REUTERS)

The State of Israel didn't exist during the first and second industrial revolutions, and was just a nascent entity as the third revolution ushered in a new age of information.

Given Israel's modest size, it was never destined to become a global manufacturing power. Yet its technological innovation has turned it into a prominent driver of the fourth industrial revolution, known as Industry 4.0, which is digitizing global production and supply chains.

Israeli start-ups were the third leading recipient of venture capital investments in Industry 4.0 technologies last year, surpassed only by the United States and China. Since 2014, annual investments in the sector have soared from $112 million to $650m., according to data published this week by Tel Aviv-based nonprofit Start-Up Nation Central. Approximately 260 Israeli start-ups are currently active in the field.

International interest in Israeli technology was clear for all to see this week, as investors and representatives of huge multinational corporations descended on Tel Aviv for Israel Industry 4.0 (II4.0) Week, a showcase of Israel innovation organized by Start-Up Nation Central, Grove Ventures and Deloitte. Among the many attendees were key business leaders from companies including Ford Motor Company, Siemens and Schneider Electric.

"Israel will not be a leader in manufacturing, we will not be a larger manufacturer than China, the United States or the European Union," Dr. Ami Appelbaum, chief scientist at the Economy Ministry and chairman of the Israel Innovation Authority, told The Jerusalem Post on the sidelines of the conference on Tuesday.

"But, similar to other areas - like cyber - we will enable Industry 4.0 to move forward with many components, technologies, subsystems and algorithms. That is Israel's power. It can expand it as time goes by to create the sub-assemblies and components that will enable Industry 4.0 to evolve."

Appelbaum emphasizes that the private sector is largely tasked with advancing such technologies, but government assistance may be necessary at first to support the emergence of out-of-the-box thinking. The government also plays an important role, he added, in removing regulatory barriers to enable the operation of pilot programs in Israel rather than abroad.

Israeli start-ups focusing on Industry 4.0 operate in a wide range of sectors, ranging from operation optimization for factories to 3D printing, and from robotics to predictive maintenance. Some have compared Israel's emergence as a leader in the field to its thriving automotive technology sector, which also evolved despite the absence of a domestic automotive manufacturing industry.

In a further sign of foreign interest, Start-Up Nation Central CEO Prof. Eugene Kandel announced the signing of a Memorandum of Understanding with the German federal state of Bavaria on Tuesday, laying the infrastructure for cooperation and promoting commercial pilots between Israeli start-ups and Bavarian industrial companies. The state is home to some of Germany's largest corporations, including Siemens, BMW and Audi.

"Signing this cooperation agreement will advance both sides to the challenges facing industry in the 21st Century," said Kandel. "Already this week, at our current conference here in Israel, no fewer than 15 Bavarian companies have come to see what Israeli 4.0 companies have to offer. I believe we will see more delegations, more collaborations, and more Israeli technology in the coming years integrated within the German industry."

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Start-Up Nation Central CEO Prof. Eugene Kandel (Credit: MICHA LOUBATON/START-UP NATION CENTRAL)

In addition, the Israel Innovation Authority plans to launch a robotics-focused partnership connecting Israeli companies and academia with counterparts from South Korea, after current fears over the coronavirus outbreak subside.

Fabrizio Anner, senior venture development manager at Danish transport giant DSV, told the Post that collaborating with start-ups to improve their supply chain enabled far greater speed and creativity.

"The whole market is changing," said Anner. "The existing players are coming up with new ideas, but new players – start-ups - which scale massively within a short time might disrupt our business in the near future."

DSV currently employs about 800 staff in Israel, with headquarters in Modi'in and offices at all ports of entry by land, air or sea. The company, one of the world's top three global logistics service providers, is already collaborating with several local start-ups. These include Kfar Saba-based Wave to digitize all freight communications, Airport City-headquartered frisbee global to improve temperature control during pharmaceutical shipments and an unnamed start-up to build an IoT (Internet of things) product to enable end-to-end supply chain visibility.