Australia’s Ambassador to Israel Dave Sharma is in the country for a couple weeks, in part to drum up business for Austrade’s new startup ‘Landing Pad’ in Tel Aviv. He’s also brought some great insights into how Australia can tap into the tech culture that is behind the Israeli innovation success story.
Israel has been very much front of mind in the Australia tech and innovation industries, and Tel Aviv has been the destination du jour for high-profile business delegations for the past couple of years.
NSW Premier Mike Baird lead a delegation there in May, while Lucy Turnbull took a group of women business leaders not long after that. NSW sponsored a set of cyber and FinTech startups for a short immersion program a couple of months ago. And Victorian Innovation Minister Philip Dalidakis will be there next week.
And a steady stream of Australian corporates have been sending senior executive teams on scouting missions. Companies like Telstra, Optus, ANZ Bank and the CommBank have set up in Tel Aviv to drink from its mercurial tech waters.
It’s not all one way traffic, although you might be forgiven for thinking it. Amb. Sharma has accompanied an Israeli delegation of senior tech leaders to Australia, who will take part in The Bridge Australia-Israel Investment Summit in Sydney next week.
You can cover a lot of ground in a short conversation with the Dave Sharma. InnovationAus.com met the Ambassador for a quick coffee at the Westin in Sydney to discuss Israeli tech success, and to understand why Australian taxpayers are paying for entrepreneurs to scout international innovation hotspots.
The five international ‘Landing Pads’ were announced as a Wyatt Roy-led initiative as part of the National Innovation and Science Agenda 11 months ago. They are in San Francisco, Shanghai, Singapore, Berlin and Tel Aviv.
Of those five locations, Tel Aviv is the odd one out. Where the others are designed to give more mature startups a toe-hold into large markets – the US, Europe, China and ASEAN – Tel Aviv is an outpost in a tiny market of just eight million people.
Amb. Sharma says the Tel Aviv Landing pad has aims that are quite different from the others. He is hoping to bring entrepreneurs whose startups are at a much earlier stage for short, intensive immersive programs that help develop their thinking and that opens up their ambition.
Israel’s innovation ecosystem is in many ways a better model for Australia than Silicon Valley, or any of the other technology centres of the world.
Israel’s innovation sector has grown so fast in the past couple of decades it is intimidating. It boasts the highest density of startups, which has led to the highest number of companies listing on the NASDAQ behind the US and China.
There are 350 multinationals in Israel that have set up R&D facilities. This is an incredible number. The Israeli venture capital industry is well established, with 10 times to 100 times the amount of VC per person as an economy.
It doesn’t sound much like Australia. But the Ambassador says there are more similarities between the markets than is immediately obvious.
“But the whole thing is still a very small ecosystem, there are 8 million people, the economy is one-quarter the size of Australia’s,” Ambassador Sharma said. “And I think that means there is stuff going on in Israel that we can replicate a bit more easily in Australia. It’s a bit more tangible for us.”
The success or otherwise of the Tel Aviv ‘landing pad’ will be measured in different terms to the others. It’s not just focused on building bigger numbers in the bilateral trade relationship of good and services. Both markets are smallish.
The flow of people, knowledge, skills, capital and companies is much more interesting, Amb. Sharma says.
“The long game here is to create a self-sustaining, high-tech sector that is uniquely Australian,” he said. “And it has to be uniquely Australian – it can’t be Tel Aviv or San Francisco or Berlin.”
“But right now we lack some of the skills, we lack some of the culture, and we lack the high-risk capital.
“And we need to import these things in various ways. That can be through knowledge transfer, through skills transfer, or it could be by attracting startups [to Australia],” he said.
“My sense of this is that we are right to have this ‘Let a hundred flowers bloom’ approach to this.
“We need to be trying a whole lot of different approaches, whether it is through the Federal, State or local governments – and I know Brisbane City Council is doing a lot of work in this space.”
“And we shouldn’t be expecting all of these programs to work. And frankly, the Landing Pads are an experiment in government policy. We haven’t tried it before and it’s an innovative approach to government policy. But we need to be doing these things.”
Amb. Sharma this week met with New South Wales Premier Mike Baird, he’s also met with Philip Dalidakis in Victoria, and has spoken to the Queensland’s director-general of the Department of Science, Information Technology and Innovation, Jamie Merrick, among others.
He is hoping the state governments will buy into the Tel Aviv Landing Pad initiative and provide support for entrepreneurs and embryonic startups to short immersive programs.
Certainly the Tel Aviv Landing Pad initiative can’t be assessed properly simply be measuring its impact on the bilateral trade numbers.
Instead, Amb. Sharma wants to focus on short immersive programs for entrepreneurs that allows them to soak up the tech culture, to soak up the ‘global from day one’ outlook of the Israeli industry, and to build stronger long-term, two-way flows of people, capital and ideas.
“The [Landing Pad] in San Francisco is really about market-ready startups and assisting them in entering the US market,” Amb. Sharma said. “The Tel Aviv one is about a much earlier business development stage.”
“It’s designed to help people refine a business concept, and to develop business skills in pitching and capital raising. And the other less well known value proposition in Tel Aviv is really access to the multinationals’ through the backdoor in relation to their R&D offices.
“This can be done in a way [the startup] would have a very hard time doing through the front door of the corporate head offices.”
Amb. Sharma is hoping to have cohorts from Victoria, Queensland and New South Wales through the Landing Pad in the near term, and possibly from Western Australia and South Australia.
He is not targeting more traditional information technology startup only. In fact, the allure of Israeli collaboration is just as interesting across AgTech, WaterTech, Defence industries and advanced manufacturing, life sciences and MedTech as well as FinTech and cyber.
These are all big opportunities.
The tech and innovation relationship between the two countries has grown in great leaps in the past couple of years. The aim is to build more cross-investments, acquisitions and collaborations.
Amb. Sharma said there is a number of Israeli companies that have come to Australia to raise money, some through back-door listing arrangements and others raising money from private investors here [including through OurCrowd.]
“I would like to see that happening more in reverse,” the Ambassador said. “And I would like to see more Israeli companies coming here to set-up [a base], particularly with the view to accessing markets or scalability in terms of agricultural production and things like that.”
“That’s how I see this relationship working. A bigger exchange of people. An exchange of knowledge. More capital moving in both directions. Establishing a presence,” he said.
“That’s what I am working towards.”