David Anthony from 21Ventures on the Future of Israeli Clean Technology

Many articles have been written claiming that Israel can become a leader in clean technology over the next ten years. Maybe, maybe not.

Defining the terms: In order to make this prediction with any degree of accuracy, we need to define ‘clean’ technology. To date, clean or green technology, often referred to as clean tech is composed of several categories and sub-categories including, although not exclusively:

* Renewable energy (Solar, Wind)
* Energy efficiency
* Storage
* Pollution remediation
* Water purification/desalinization
* Agricultural advancement

Dispersion of clean tech knowledge: Part of the challenge of establishing a center of excellence for clean tech is that, unlike IT, its genesis can take place at any university or laboratory around the world.

The necessity of a Silicon Valley or Route 128 has been lessened by the fact that electrical engineering is no longer the only academic background required to solve environmental and energy challenges. Microbiology and chemistry graduates are more likely candidates to find employment at clean tech startups than their electrical engineering counterparts. The universe of clean tech companies which been created in the Internet age have cropped up all over the globe, seemingly with no bias toward any particular climate or time zone.

Israel as the Future Clean Tech Epicenter – The Pros:

Various places lend themselves to certain clean or green technology sectors; solar technology in the Middle East, for example. Due to the country’s urgent need for reliable solutions to deal with its own environmental challenges (mainly the water crisis) Israel’s clean tech market has become very attractive to foreign investment.

Despite being one of the world’s most arid regions, experiencing ever-growing water consumption and alarmingly low levels of rainfall, Israel has succeeded where others have failed.

Water demands have been answered over the past few decades by effective water management, including rain harvesting, flood reservoirs and the introduction of innovative irrigation methods serving their agricultural demands.

Significant advances in desalination of seawater, recycling and purifying municipal wastewaters, and reclaiming sewage waters have been achieved by Israelis. At least 30 percent of agricultural water is drip-irrigated to orchards and non-food crops. Relatively speaking, Israel has devoted more resources to the development of wastewater treatment and reclamation than any other country in the world.

Israel has a head start in experience with solar thermal as nearly all apartment buildings there have simple solar thermal panels on their roofs. Motivated more out of will to survive than a hunger to solve environmental issues, Israel has more reason than most nations to wean itself off of crude oil.

While every country wants to lessen its dependence on crude oil, for Israel it’s personal. This may prove to be one of the most compelling arguments for why the relatively small nation state may indeed become the next epicenter of clean technology innovation.

Israel is home to Ormat, one of the leading companies in the world for geo-thermal power plants and recovered energy in the world. In agriculture, Israel is the birthplace and world leader in drip irrigation, literally turning a dessert into an agricultural country. Netafim is the world leading company in this field. In the storage arena, Israeli Tadiran has become one of the leaders in long-life industrial strength batteries. The fact that Israel is located centrally, with easy access to Asia and Europe have enabled these companies to realize customers on several continents while operating from Israel.

Israel as the Future Clean Tech Epicenter – The Cons

To date, there are no leading Israeli solar power companies on the market today and Luz 1 was a failure. There is an innate inertia at work in Israel to stick to what it knows best – I.T. and telecom, stifling potential investment and devotion of talent toward clean technology. While there is no shortage of smart scientists and clean tech research, there is a surprising lack of clean tech entrepreneurs.

Historically, Israelis are good at improvisational thinking within an already established category (think ICQ). Clean tech, however is a completely new paradigm that requires category builders more than improvements. One need only look at the mass of ‘technology refugees’ to see that Israeli’s have been slow to adapt to the new opportunities in clean technology.

Conversely, technology entrepreneurs within the US have been migrating over to the clean technology sector in greater numbers. Part of the reason that this migration has been slow is that the Israeli entrepreneurs and scientists are too isolated from one another. Overtures from one side to the other are missing. Furthermore, scientists are slow to leave their tenure posts at universities for business ideas that are admittedly a few years out from proving themselves.

Lastly, Israel is a small country. Currently, there just aren’t enough demonstration projects to show to the rest of the world. Without the significant helping hand of a large government endowment, Israel’s chances of competing with the likes of the US, China and India seem unlikely. The same location that provides regular and dependable exposure to the sun leaves Israel in a region of the world almost bereft of wind when compared to Europe and the Americas. Not surprisingly, there isn’t much wind energy in use, nor are there many wind experts.

What must be done?

More dating between university research and entrepreneurs is the only way to create a marriage of industry and science. This effort, coupled with a shift in focus from the Office of the Chief Scientist, placing more grant money in the hands of clean tech companies (currently it represents less than 15 percent) needs to occur for Israel to distinguish itself from its alternatives.

In summary, Israel must realize that clean tech is certain to be one the growth industries of the next ten years. To truly lead the world in clean tech investment and innovation, Israel must have greater support from the state.

David Anthony is the founder and manager of 21Ventures, virtual technology incubator focusing on the ideas and innovations that will dominate the 21st century. He took his own life in 2012, around the same time when renewable investments tanked.