Israel needs to shift from Startup Nation to Implementation Nation. If the Covid pandemic proved anything, it is that a small country with a digital backbone that can move with alacrity can make dramatic gains in health. It just needs the political willpower and regulatory framework to get there. And it needs this willpower on a persistent basis.
Derek Thompson’s recent article in the Atlantic correctly states that invention is easily overrated, and implementation is often underrated. Life-saving innovations like Paxlovid, the Covid pill, could save lives, but it’s still hard to get in the United States. It was invented, but not implemented. We could have had clean energy; it was invented 70 years ago. But green lobbies, NIMBYists and others have halted the implementation of nuclear power that could have gotten us much closer to a clean energy future.
In contradistinction, in Israel, both Covid vaccines and Paxlovid — which were invented in the US — were scaled up and implemented rapidly, due both to a fast-moving, relaxed regulatory framework for Covid and to political willpower. Israel was able to move quickly in this case because our health system was digitized and the smallness of the country gave it an advantage in rapid decision-making.
The same can be true in other regulated industries such as financial services, energy and agtech. Just like Israel’s HMOs digitized the health industry, providing the necessary framework to make vaccine and Paxlovid implementation work quickly, Israel must develop both the willpower and capacity to quickly reduce regulatory hurdles, digitize government data and provide standard APIs to government information systems in partnership with the private sector.
We need to strive to make Israel the world’s digital lab for renewable energy, water conservation, future financial services and e-mobility. We need to accelerate the clock on this because ease of implementation is an engine for economic growth.
You can see the same thing at work now in Israel’s energy policy toward the natural gas discovered off her shores. Whereas Israel’s Minister of Energy Karin Elharar initially bowed to climate exuberance and activists, announcing there would be no additional drilling for natural gas or oil, once the Russia-Ukraine conflict started she not only reversed course, but actively looked for ways to export Israel’s natural gas to Europe. Elharar deserves our admiration for her change of heart and flexibility of mind. Moshe Dayan once said that only a donkey does not change its mind.
Israel’s Innovation and Science Minister Orit Farkash Hacohen recently called for more significant and deep innovation in energy. Her office is prepared to provide funding for startups and innovation, but in order to make this work, she also needs to enable companies to deploy and implement quickly in Israel. The government must help overcome the various green lobbies and molasses-like planning commissions at the municipal and national level to get these technologies implemented. This way, other countries can turn up and see these products deployed successfully, which will help Israeli companies both use technologies for Israel’s local benefit and scale up faster globally.
The recent implementation of Open Banking is welcome, but too late. We must be the world’s most advanced fintech regulatory ecosystem and have the digital and crypto backbone to implement innovation. It is still way too hard to open a crypto company in Israel — and even to open a bank account. It is still too hard to innovate in financial services in Israel due to the lack of digital infrastructure at the banks.
With the southern United States drying up and looking more like Israel’s Negev desert, agtech and watertech accompanied by fast-paced implementation in Israel can create massive opportunities. The same is true in energy, fintech, mobility and health innovation, all of which are at the top of every country’s agenda. Being a small country that can move fast has a lot of advantages. Israel needs to be ahead of the regulatory curve in all of these areas, leading the world instead of following, just as it did with Covid vaccination. Unfortunately, that is not yet the case. Banking regulators, planning commissions and the agricultural ministry and regional councils are all way too slow.
I made this same suggestion 12 years ago in part 3 of my Hummus Manifesto: we need to jump-start our national competitiveness. We need a cabinet level position of Chief Investment Officer whose job is not only coordinating investment, but clearing the path for implementation with a combination of deploying money and destroying bureaucratic obstacles. Since I made that suggestion 12 years ago, Israel was branded the Startup Nation. It is time for us to grow up and become the Implementation Nation, to not only be a light unto the nations, but to invite them in to see how we do it ourselves and learn from us firsthand.