israel
Credit: Adam Blasberg

Bill Barrable heads the Rick Hansen Institute, which is working with Israeli researchers to create products for patients with spinal cord injuries

As a rising number of expats from the Middle Eastern country make their home here, can its vaunted culture of innovation help our economy grow and diversify?

by Ng Weng Hoong

Since independence in 1948, Israel has transformed parts of the harsh Negev Desert that occupies more than half of the country into forests and farms to grow food crops and even fish. But it would require a combination of Einsteinian imagination and risk-taking to turn today’s parched economic landscape between B.C. and Israel into fertile ground for innovation, investment and trade.

In 2017, Canada’s bilateral trade with Israel was worth $1.7 billion, according to Statistics Canada—just 0.15 percent of the former’s $1.12-trillion global trade total. B.C.’s share of the Israel portion is so microscopic that provincial government statistics don’t mention it. But numbers don’t tell the full story. Beneath that trade desert, officials from both countries are working with businesspeople, academics, scientists and technologists to help build the foundation for B.C.’s future economy.

“We don’t look at the trade numbers as a matrix to measure the success of our projects,” says Bill Barrable, CEO of the Rick Hansen Institute (RHI), the Vancouver-based spinal cord injury research and care centre. As part of a groundbreaking alliance with Hebrew University of Jerusalem in 2017, the non-profit has begun focusing on developing commercially viable products to help people with spinal cord injuries (SCI).

SCI patients struggle with an estimated 30 identifiable complications related to bladder and bowel movements, poor muscle control and pain management. These complications also afflict people suffering from amyotrophic lateral sclerosis (ALS), mobility problems and hip fractures, as well as those stricken by stroke.

By targeting a bigger population with such ailments, the joint biodesign project aims to increase its impact and its chances of commercial success, explains Barrable, who has led RHI since 2010. “We saw a huge gap in the spinal cord injury landscape,” says the health and life sciences veteran, who is tall and trim and speaks with a strong, steady voice, giving him the appearance of a general mobilizing troops for battle.

Leading the project is Yaakov Nahmias, director of Hebrew University’s Alexander Grass Center for Bioengineering, where he co-founded and heads its world-leading biodesign medical innovation program. Within a year of its partnership with RHI, which helped identify unmet clinical needs, Nahmias’s team designed, created and patented two SCI-related devices that are ready for commercial development.

UFree is a catheter that allows men, bedridden or in a wheelchair, to urinate painlessly and freely, with reduced bladder infection risks. iCough is a portable, adaptive and self-handled product that lets people with SCI complications breathe and cough more easily. “We were thrilled that they came up with not one but two innovations that have the potential to help people with SCI,” Barrable says.

The next step is securing investment—by having an investor establish a new company in B.C. or finding an existing one to acquire the patents, and to help produce, market and export the devices. “We’d like to see an incorporation in B.C. for one or both of these products,” Barrable says. Doing so would boost export earnings and create high-paying jobs.

But even that might not do much to improve B.C.-Israel trade and investment numbers. What else does the province hope to achieve by expanding ties with Israel?

WHY ISRAEL?

The RHI biodesign effort represents an imperative for researchers today: produce commercially viable solutions with immediate real-world impact. Thanks to decades of enforced practice at survival in a geopolitically hostile region, Israel has honed that process to an art.

The Israeli way combines an impatient, entrepreneurial mindset with a rigorous practical system to sort out winners in a culture that demands success yet tolerates failure. This knack for harnessing creativity by balancing conflicting demands, described in Dan Senor and Saul Singer’s 2009 bestseller Start-Up Nation: The Story of Israel’s Economic Miracle, is key to innovation.

The small Middle Eastern country of 8.8 million embodies the innovation economy. The World Economic Forum’s Global Competitiveness Report for 2018 ranks Israel No. 1 out of 140 countries for growth of innovative companies and its support of entrepreneurial risk-taking.

Technology and innovation are central to Israel’s survival, says Israel Shamay, head of the Americas division at the Israel Innovation Authority (IIA). Surrounded by enemies and lacking a rich natural resources base, the country has had to rely on homegrown tech to underpin national defence and economic development.

Israel’s pioneers didn’t use buzzwords like “innovation” and “knowledge economy,” but they embedded those principles into its foundation, Shamay, a soft-spoken graduate of the famed Technion–Israel Institute of Technology, says during an interview in Vancouver. The research process is tough and fast-paced so that only the best products make it to market quickly.

In November, on his first trip to B.C., Shamay met with provincial government officials and representatives of the private sector as part of a Canada-wide tour to expand bilateral technology ties. Earlier, he was in Montreal and Ottawa, where he took part in the inaugural meeting of the Canada- Israel Bilateral Directorate for Innovation Science Technology (CIBD). The directorate is co-chaired by Ailish Campbell, Canada’s chief trade commissioner, and Danny Biran, head of the IIA’s International Collaboration Division.

The IIA is the state agency tasked with overseeing Israel’s industrial research and development strategy. “Israel is home to 400 multinational companies fuelling R&D activities,” Shamay says. “They are brimming with energy and ideas.” The country spends big on R&D: an Organisation for Economic Co-operation and Development (OECD) study found that in 2015, Israel invested 4.25 percent of its gross domestic product in R&D, the highest rate among the world’s 34 developed countries.

Israel’s high-tech sector has more than 6,000 startups, many of them in the Silicon Wadi on the coastal plain. Last year, Israeli tech firms raised a record US$6.47 billion in venture capital, up from US$5.52 billion in 2017, according to IVC Research Center, a Tel Aviv–based market intelligence firm.

The IIA now plans to expand abroad, with North America as its most important market and partner. Shamay rates B.C. highly for its political stability, an inclusive culture that is crucial for nurturing creativity and innovation, and a diverse, educated population to support companies developing products for export to the Americas and Asia. There’s also scope to build on the recently upgraded Canada-Israel free-trade deal. “The Americas, particularly the U.S. and Canada, are a natural fit for Israel,” Shamay notes. “Compared with other countries, there’s greater similarity in terms of culture, language and business practices.”

Rather than sow the seeds for future competition, he says, “If anything, the world needs greater collaboration to deal with urgent issues. Nations must put their collective minds and talents together to deal with pollution, feed the world, combat the warming of the oceans, plastics pollution and so on.”

Trade commissioner Campbell says she’s looking forward to working with Israel to boost innovation in Canada. The two countries will aim to increase joint research partnerships between their universities, institutions and companies to advance common knowledge or commercialization, she explains. Canada and Israel will focus on “significant opportunities” in clean energy and sustainable technologies, agriculture, cybersecurity, oil and gas, aerospace, artificial intelligence, biotechnology and health, quantum computing and advanced manufacturing, Campbell says.

Wadi
Credit: Wikipedia

Known as the tech hub of the Middle East, Israel has more than 6,000 startups, many clustered in Tel Aviv's Silicon Wadi

WHY B.C.?

The prospect of stronger B.C.- Israel ties coincides with a growing concern among the province’s political and business leaders about the state and direction of the economy. Across the ideological spectrum, there’s agreement that B.C. must find new ways to diversify.

Meanwhile, businesses are looking beyond their traditional markets. B.C.’s engagement with China could be at risk from Beijing’s geopolitical ambitions and rocky relations with Ottawa, while the U.S. under President Donald Trump has become an erratic and abusive partner. As the province searches for new ideas and relationships, Israel has emerged as a fresh and intriguing prospect.

The B.C. establishment also faces warnings that the province and the rest of Canada risk declining competitiveness on the world stage. In its 2018 assessment of the country’s R&D, the Canadian Council of Academies (CCA) frets about Canada’s “faltering place” in the global economy. “National prosperity, competitiveness and well-being are inextricably linked to the capacity to participate in and benefit from research, development and innovation,” says the Ottawa-based CCA, which convenes top experts to assess scientific issues to inform decision making in Canada.

Unlike Israel, Canada has let its research-to-GDP spending ratio go into free fall, from more than 2 percent in 2001 to a new low of 1.7 percent in 2015, the CCA notes, citing OECD data. This decline portends a drop in living standards because the country hasn’t been upgrading its knowledge base, its people’s skills and its technology for well over a decade. If underinvestment continues, the CCA maintains, Canada will suffer “significant erosion” of its international competitiveness.

In B.C.’s case, weak competitiveness has been masked by nearly two decades of relatively strong economic growth brought on by the hydrocarbon-led commodities boom of 2000-14, a recent surging real estate sector and a population expansion. Metro Vancouver’s housing market peaked last year, with experts forecasting revenue declines that will affect the economy in 2019 and possibly beyond.

Canada’s growth momentum has run its course, the International Institute for Sustainable Development (IISD) observed in a 2018 report. The Winnipeg-headquartered think tank looks beyond GDP and trade data to describe comprehensive wealth as the total measure of the country’s produced, natural, human, financial and social capital that determines its future prospects. Without drawing much attention, the Canadian economic model has been unsustainable since 2008, the IISD argues in its report.

Where does this leave B.C.? Since taking office in 2017, the NDP-led B.C. government has continued its predecessor’s work to create the foundation for an innovation economy. Last March, the Ministry of Jobs, Trade and Technology relaunched the BC Innovation Council as Innovate BC with an expanded mandate to provide “a single point of contact for tech businesses throughout the province to build capacity, reach global markets, attract new investment and access startup capital.”

The Crown agency, whose job is to support tech entrepreneurs and businesses, has the authority to “strengthen national and cross-border relationships.” The U.S. has a head start, given its proximity and historical links, but Israel is emerging as a potentially important player.

Last November, a B.C. delegation visited Israel to explore opportunities for joint projects, including those in biosciences and smart cities, says Bruce Ralston, minister of jobs, trade and technology. It included Bill Tam, VP business development and partner relations with the B.C.-based Canada’s Digital Technology Supercluster, and scientist Alan Winter, appointed the province’s first innovation commissioner in February 2018. “In general, when Israelis are involved, things happen fast,” says Ralston, who welcomes an injection of Israeli talent, technology and startup culture into B.C.

In a February interview, tech ambassador Winter says the delegation’s “excellent mission to Israel” will encourage B.C. organizations, the IIA and private companies from both places to further collaborate on tech and health research projects.

The B.C. group visited the cities of Tel Aviv, Haifa, Beersheba and Jerusalem, holding some 40 meetings with senior Israeli officials, Winter says. There was “significant interest in Israel in Canada’s Digital Technology Supercluster,” he recalls. “We also found that the discussions informed our understanding of the role of innovation in the economy, from startups through to multinational companies.”

The two sides are building on links established in 2016 by the visit of a B.C. delegation to Israel led by then–finance minister Mike de Jong. The RHI–Hebrew University biodesign project was a direct result of that visit.

WHY NOW?

As the provincial government steps up its innovation drive, a vibrant Israeli tech community has been quietly emerging in Vancouver. Ezra Shanken is CEO of the Jewish Federation of Greater Vancouver, which serves about 30,000 people throughout the Lower Mainland. Although there are no official statistics, Shanken has observed a flow of tech and business types from Israel into Metro Vancouver over the past two years. He believes this has pushed the number of Israeli expatriates and their families to a record of about 5,000, with more likely to follow.

“We’re experiencing an influx of Israeli talent coming to build the high-tech economy here in British Columbia,” Shanken says. “I don’t know where that factors in the trade numbers, but I would count that very much as an impact on the economy.”

Some of those talents are a small portion of the 3,000 positions that Amazon.com is creating in Vancouver as the U.S. e-commerce giant expands its North American tech hubs. An Amazon official declined to comment on the number of expats and their families the company is bringing in from Israel. “With Amazon, you’re talking about absorbing over 100 people into our community. That’s a lot of people to absorb properly [in a short time],” Shanken says. “On top of that, you’ve got Israelis coming in for academia, for other tech companies, and as doctors for hospitals and the health-care sector. These are people in their 30s and 40s, at the prime of their careers, parents with young children.”

The Jewish Federation’s core mission is philanthropy and social services, but it’s also been asked to support the Israeli tech business community. It helped create the popular Vancouver Israeli Tech Club (VITEC) networking forum, which launched in 2013 and takes place three to four times a year.

VITEC is organized by Eran Elizur and Ronen Tanne, Vancouver-based entrepreneurs who are citizens of both Canada and Israel. Each gathering, held at different downtown venues and featuring presentations from guest speakers, usually attracts up to 150 participants, including entrepreneurs, tech professionals, bankers, lawyers, venture capitalists, government officials, scientists and academics. The meetings are open to all and conducted in English.

“The idea is to bring together people with a common interest in business and technology that has connections to Israel,” says Elizur, 56, who came to Vancouver in 2000. Tanne, 53, arrived three years later. Both have raised families in Vancouver. With no immediate plans to return to Israel, they are helping the city grow as a technology hub.

Separately, a group of Israeli women, mostly wives of recently arrived Israeli expats, has launched Women Empowerment (WE). Yael Mayer started WE in early 2018 with her friends, Yael Paez and Regina Lvovski, to cater to the professional aspirations of young Israeli women who had moved to Vancouver with their husbands and children. While the men took higher and better-paying positions, their wives had to cut short promising careers in Israel.

The three, married with young children, met through Facebook and realized there was already a critical mass of talented Israeli women in Vancouver seeking to build careers or businesses. “The average age of the 400 women in our group is 36.7,” says Mayer, who earned a PhD in clinical psychology in Israel and has started a counselling practice in Vancouver. “Most of them have second degrees, mostly a master’s.”

Lawyer Bernard Pinsky, a former president of the region’s Jewish Federation, sees the new Israeli arrivals as underlining Vancouver’s appeal as a destination for global talent. “That is very healthy for an economy that wants to innovate,” he says. “You get people coming here from different parts of the world, and they start collaborating.”

For now, their impact on the province’s tech business culture has yet to be felt. But the room for growth is enormous, judging from the less than $390 million the B.C. tech sector raised from venture capital and angel investors in 2017, according to the 2018 British Columbia technology report card published by the BC Tech Association and KPMG. That total has been falling steadily since 2014, when it surged to $860 million.

There’s a parallel with B.C.’s push to build a liquefied natural gas industry from scratch. For years, efforts to attract capital drew a blank amid widespread skepticism. But improving market conditions and the right regulatory framework finally triggered a Royal Dutch Shell–led consortium to announce last fall that it would invest $40 billion in an LNG export project in Kitimat.

Hopes are high that the B.C.-Israel economic landscape is at the same stage as the Negev Desert before its partial transformation into farmland.