Adversity can trigger innovation: What can we learn from the story of Israel?
Yossi Vardi, the godfather of Israel’s hi-tech industry, brought a remarkable story of Israeli innovation to the Reflect Festival. Difficult circumstances turned this country into one of the most vibrant startup ecosystems in the world. Can the current situation spawn another creative revolution? The legendary community-builder, connector, and prankster gives us a sneak peek into the future we have an opportunity to build due to the current crisis.
YV: When you try to examine what propels ingenuity, innovation, and entrepreneurship, you will find two different main engines. One: entrepreneurs see an opportunity, an untapped market, or have an idea how to revolutionize the world. This is usually the more recognized sentiment, but a lot of innovation and very important developments are triggered by conditions of adversity. I think that right now, in the time of corona, this is probably the most important engine.
Can you tell how adversity influenced your home, Israel, known as the startup nation?
YV: We are known as the startup nation because the number of startups in absolute terms and especially per capita is really very high – I think we are number one. In the last 3-4 decades, the whole country was obsessed with creating startups, and I believe we have about 7k startups in a population of 8.9 million people. That’s about 1000 startups per 1 million people.
If you look at history, it wasn’t always a startup country. We began to develop this part of the world about 120 years ago; it used to be a piece of desert with very few resources. Water was always the constraint for the country’s development or even of the whole region, and I would like to use water as the first example of how adversity triggered innovation.
YV: When people who came back to the land of Israel faced a shortage of water, we developed ways to manage water resources. We developed something called deep irrigation, where the water is brought into the roots of the plant, and it’s not just sprayed in the air, using gravitation for the water to fall on the plants. Later on, we began to recycle water, and today over 85 percent is being recycled and used first for human consumption, then for irrigation. About 50 years ago, we also started major desalination activities. This was one end of the equation – the other end was to develop products, plants, and trees which are using less water per unit of output. So the scarcity of resources drove the technology.
Having solved the main resource problem, what other challenges followed?
YV: The productivity of agriculture has also become very important. Around 40-50 years ago, we developed a whole industry of greenhouses where we’re raising vegetables in a very effective way. I invite anyone who is interested to search Israel tomato growing on YouTube. You will see tens of videos showing a variety of technologies.
As the needs evolved and scarcity of new things appeared, our scientists continue to work on new frontiers in agriculture. I can give you one very interesting example: as many of you know, there is a reduction in the number of bees in the world, and this threatens pollination. Israeli scientists are now working on robots that create pollination by gently shaking flowers. So agriculture is another very important example. This is the country’s history, and this way, you can take area by area by area and show how scarcity and how adversity triggered the imagination and motivation of people.
Do you think that Covid’s disruption will have a massive impact on innovation?
YV: I think this situation is manifesting on a gigantic scale. Since 60 million years ago, when this meteorite hit Earth and created a cloud of dust that killed all the dinosaurs and many other organisms, there was not a disruption on a large scale that we have today. The whole world was put on hold, and maybe there have been in the past a few other times when there were major eruptions of volcanoes, but in modern times we never had such a situation. Today, when the world is connected by transportation, airlines, and machines delivering things in such a dense way, one thing that happened in one part of the world affects the world’s other ends.
This disruption is bigger than that of wars because war doesn’t involve 100 percent of the population. Also, during wars, you’re still working, and this industrial activity or manufacturing/business activity gets the economy back on track when war is ending. In this case, we have a disruption in a whole way the world functions. In parenthesis, I would like to say that we still – I think – don’t realize and don’t recognize the long-term effect of this disruption. I think that we are going to see very grave results, very grave consequences in the future of the kids, the less strong parts of society.
The corona situation and regulation and the curfews are hitting most the weakest part of societies. These are the people who are raising our children, which are building our next generation, and with the current situation of closures and schools closed, we are going to have long-term effects. It’s not a matter of pandemic being controlled that everything will get back to business – it will take years.
Sounds grim, but we suspect there’s also the brighter side of things. What about the potential this situation brings?
YV: As I started my talk, the adversities also create opportunities. We are going to see a whole new way how the world is going to run. If you take industry by industry, you see it very vividly.
I think that cities are not going to be the same: everybody agrees that the division between commercial and residential areas is going to be totally different. Downtowns will be changed; the neighborhood will get much more important, things will be closer to home because people will stay at home.
Big companies are beginning to talk about hybrid employment when they come back to work from the corona – that people will spend 2-3 days at the office and 2-3 days at home. The corona shows that with the current advance of technologies, with communication, broadband, streaming, computing power, storage, and collaboration tools, people can work pretty well from home and save this hour or two hours which they spend on the roads. And if you take, let’s say, 16 hours a day when you don’t sleep, spending 2 hours to go to work and back, it’s big taxation. So we will see the home becoming much more central in the lives of people – not only in the family sense but also in the work sense and entertainment sense.
We see it already today; during the pandemic, we saw a huge jump in the use of streaming for entertainment, offerings like Netflix, Disney, and others grew very substantially, and this is just the beginning. We see it also in the home improvement industry. People are now focusing much more on home, not only because they have the time, but the need to go to work is going down.
Do you think the way we work will completely change?
YV: Actually, it’s amazing – for the last 200 years, people woke up in the morning, took a sandwich, went to work – to the office or the land – and this was the standard way people worked. This paradigm is dead. Corona was the trigger to educate the people that this is doable. We were already able to have a quiet, reasonable collaboration, probably since the invention of Skype for the last ten years. Today, with Zoom and other tools, it’s really very easy to collaborate. What we see today are remote sessions, education, discussions, assemblies – it’s just the very beginning.
What about other areas of life?
YV: The changing of urban planning and urban usage and the ability to work remotely will redefine transportation. I don’t know what shape it will take, but it will definitely take a whole new shape in the transportation systems, so we will see major changes.
Again, something that is quite obvious, and all of you recognize it – we see very rapid growth in telemedicine. People are going to clinics less because, and because of corona fear, they are consulting with doctors over a telephone or over video. We see a wave of remote testing, remote reading of vital signs, automatic reading of vital signs. Today, in order to read something remotely, you don’t need a device to have its own autonomous transmission. It can send the reading by Bluetooth to a nearby telephone, and the telephone can send it forward. Again, we see devices popping up very rapidly, so you don’t have to go to the doctor who will read your vital signs; you can do it at home and then transmit- this is a huge industry that is under development right now.
I think we are going to see major changes in the way healthcare is provided. The structure of hospitals and clinics, departments in hospitals are going to be totally redefined. Now it’s being done on an ad hoc basis; hospitals are opening corona departments.
If we look at society as a whole, do you see major red flags? Or is there a bright side to how society will be restructured?
YV: I think we are going to see a whole new social structure with so many unemployed people going back to live with their parents. Social security is also going to be redefined. I have my thoughts on how it’s going to be: some major changes should be needed. You can go area by area and see this adverse effect of opening opportunities in many new areas. The manufacturing flow is going to be changed. We will see the advancement of robots because of the vulnerability of people.
I think that to sum up: First, adversity is a major motivation, a very strong propelling power—much more than just having an opportunity or a dream.
And number two is the current hyper-disruptions we are experiencing right now. In 3-5 years, we will see a whole new world, new areas of development, and every walk of life, every segment, will be redefined and is going to create an opportunity.
Unfortunately, these opportunities are not equally divided between people. One of the main weaknesses of high tech is that it’s not evenly distributed. Fewer people are reaping the benefits of this sector in a much bigger way than the others. One of the reasons for the worldwide unrest is this division between the have and have-nots.
We’d better focus on the weaker elements of society because they are the victims of adversity and don’t enjoy the opportunity. It is not only the moral duty but also our very selfish interest to see how we can embrace more people benefiting from these opportunities.
JOSEPH “YOSSI” VARDI is chairman of International Technologies, which is engaged in private hi-tech investments for its own account. He is one if Israel’s hi-tech veterans, with 37 years of founding and helping build some 40 hi tech companies in Internet, software, telecommunications, electro-optics, energy, environment and other areas. Several companies Dr Vardi co-founded became successful public companies, among them Alon — Israel’s largest energy company, Advanced Technologies (Tekem — which was at a time the largest software company in Israel), International Technologies (Lasers), and Granite Hacarmel (as noted on edge.org).