How The Small State Of Israel Is Becoming
A High-Tech Superpower
The horrific Iran nuclear deal is, these days, overshadowing the
miracle of the Israeli economy, particularly in the area of high technology.
With the exception of the U.S., Israel–a country of a mere 8 million
people–leads the world in high tech, an astonishing feat. In this interview
Prime Minister Benjamin Netanyahu talks about the big, exciting things that are
happening in the high-tech powerhouse center emerging in Beersheba–and much
else, including why Israeli milk cows are the world’s most productive and how
this desert nation solved its water crisis (California, take note).
Steve Forbes: Thank you very much, Prime Minister. We’re
meeting here in Beersheba. By all accounts Israel is now one of the top two or
three high-tech powers in the world–ahead of the European Union, with its 500
million people. You’ve done this with 8 million people. How? And how do you
maintain your leadership with only 8 million?
Benjamin Netanyahu: Well, you have to
have deep roots. We’re in Beersheba. It’s a new town. Abraham came here 3,800
years ago, and we sort of rebuilt it with the founding of the state. But the
new thing is this: We decided here, in the middle of the Negev Desert, to bring
in our special information units of the Israeli Army and put them right next to
Ben-Gurion University. And right next to that—all within 100 yards–to build a
cyber industrial park to bring in the leading companies of the world. And
they’re here. We have this interaction between our finest military and
cyber-security minds and the finest at the university and the nearby
businesses.
This is a
hub, and it’s exploding. You’ve been here for just a few hours, but you can see
this; I mean, it’s literally going through the roof. And I’m delighted with
this. It’s–I hate this word, but I’ll use it anyway—it’s this “synergy,” you
know? It’s this, this…
SF: Brainstorm.
BN: It’s the brainstorming, the culture, the minds. It’s these
fantastic minds that bring a lot of experience from military intelligence and
our other special units joining with natural entrepreneurs. Many become entrepreneurs.
Foreign companies, international companies realize that it’s all in the brains,
in the ability to solve problems, foresee future problems and address the
questions that will determine a lot of the world’s future. How do we protect
the Internet? How do we protect cyber security? How do we protect our
bank accounts? How do we protect our privacy? How do we protect our
electric grids? How do we protect our traffic systems? How do we protect our
airline safety? How do we protect anything? Water flows? Everything is
governed by digital motors, digital transport. And cyber can be either the
traffic cop or the robber. We want to be on the good side, and we want to help
others be on the good side.
SF: You should also mention personnel records, as Washington,
D.C. has recently discovered.
BN: I’ll tell you, Steve, nothing, absolutely nothing will
escape the Internet–not people, information, words, numbers or things.
Everything is in this gathering cloud, and it’s just growing and growing. And
it’s all open to sabotage and to infiltration by hostile governments, terrorist
groups, organized crime and/or individual hackers. We need security here. This
is the South of Israel, the wild South. But the Internet is like the Wild West.
It’s growing at a geometric pace, and for it to continue its growth with
safety, security and stability, we need cyber security. And Israel is right up
there. I took it as a goal to be among the top three cyber-security powers of
the world. And I think we’re definitely there, but we’re shooting even higher.
SF: There’s been a lot of pessimism about cyber security, that
not much can really be done about it–just as in the old days it was said there
was no defense against suicide bombers. What have you seen that makes you feel
that we can not only defend but also go on the offensive and anticipate what
these guys are going to do?
BN: There’s no question you can defend, but that doesn’t mean
that you can be hermetically protected. It does mean that you can do a lot
more. First of all, you can protect very well against the neighborhood thief.
There have been plenty of developments that allow you to protect both against
the neighborhood thief and the gang–and even governments. It doesn’t mean you
can protect yourself against everything, but you can protect yourself against a
lot of things. And that’s useful. And this is evolving all the time.
I think
the hardest thing about cyber—which is different from other forms of
attack, offense and defense–is the difficulty in setting rules. In normal
competition, or even in warfare, you can set rules. Most of the time you know
who’s attacking and who’s defending. You can use protection, you can use
deterrents, you can use punishment. But in the world of cyber it’s not always
clear. Cooperation is necessary yet also dangerous, because your partners can
be infiltrated. The cyber world is complex and evolving, but if we sit back and
say, “Okay, because I have these problems I’m not going to do anything, because
I can’t solve everything,” we won’t solve anything. No, that’s not the way we
work.
We said,
let’s just plunge ahead. Let’s learn as we go along and build defenses as we
progress. And that’s something that we’re doing: The companies are doing it;
the military’s doing it; our special intelligence units are doing it; and
foreign companies that join us are doing it. We profit from them; they profit
from us. I’ve decided to give tax breaks to cyber companies that come here
because I want their business and because I think they really have an exciting
opportunity here.
This is
where young minds–some of them very young–are. And they think outside the box,
which is an understatement. This kind of talent–academic, military, security
and entrepreneurial–has converged in one place and is producing a lot of
startup companies and a lot of innovations that will give the Net a measure of
security it just doesn’t have today.
SF: So, how did Israel, a small country, become a giant in the
area of high technology, in certain key areas?
BN: Well, you know, we’re surrounded by enemies. So to survive
we needed a big army, relative to our size. But the most important thing in our
army is the head, the brain. It’s a very large brain compared with those of
other powers. We invest heavily in military intelligence. And developments in
military intelligence, especially in IT, were a great unrealized potential
until we created a more business-friendly environment. You can have the most
brilliant minds, the most brilliant mathematicians and physicists–as you had
with those who came from the former Soviet Union. But, as you know, that didn’t
go anywhere [until] you [took] those scientists on a plane to
Paolo Alto. Then they were producing added value within two weeks.
Okay, in Israel
we had these top brains, including those with military experience, cruising the
Net. But the most important thing [we did] was to create a pro-business
environment, a pro-entrepreneurial environment and to introduce the idea of
venture capital. The minute we fused intelligence capabilities with business
capabilities, the Israeli high-tech economy just took off. And that’s something
to which I’ve devoted a good part of my time as prime minister. Now I’m
especially concentrating on the enormous growth area of cyber security, which,
I believe, will be a growth engine for the next 50 years. The problems aren’t
going to go away, and the need for solutions is going to grow. And we intend to
be there with the solutions.
SF: So, Israel’s a global leader in high tech and, certainly, in
technology and agriculture. Water? You made miracles. What are you going to do
to get the rest of the economy up to speed with what you’ve been doing in these
three areas?
BN: Well, the first thing is you’ve got to have products that
actually give added value–and we do. Cyber is an enormous growth area. But in
all areas of technology Israel is, in many ways, a world leader.
I spoke to Mr.
Modi, the prime minister of India. And he told me, “Look, in all my four color
revolutions–in water, dairy, clean air [and the other things he wants, such as
agriculture]–I need Israeli technology.” So the second thing you want to
do is not only develop the technology but also develop it for new markets.
The great
economies of Asia are coming to Israel. And we’re going to them, because we
realize that the kind of developments we have can better their lives. We can,
you know, produce more milk for them. The [breed of] cow that produces the most
milk per cow is not a French cow or a Dutch cow; it’s an Israeli cow. Every moo
is computerized. And it produces an enormous amount
of milk. Now, if you have to feed over a billion people in China, that makes a
difference. The same is true in India and in other countries. They want that
technology. Water? We recycle–87% of our waste water is recycled. The next
runner-up is Spain, with about 20%.
SF: And the U.S. is about 1%.
BN: Well, yes. We’ve solved our water problem. Water is a big
issue–it’s even a big issue in the United States. Now, you know, when Israel
was founded 67 years ago, we had twice the rainwater that we have today. Our
population’s grown more than tenfold; our GDP per capita has grown almost 40
times. We should have a water problem, but we don’t. Because we recycle more
than any other country in the world. We’ve desalinated. We’ve got drip
irrigation. We’ve got controls on our waste and spillage, electronic controls.
We don’t have a water problem.
In the middle of
the desert, you went out there; you came out here, to Beersheba, in the middle
of the desert, and the water’s flowing. Abraham would have liked that, believe
me. He had seven wells here. You know, we’ve got the wells of water and the
wells of ingenuity and, I think, innovation. And the future belongs to those
who innovate. Israel innovates.
SF: How do you get the bureaucracy to be more cooperative?
BN: Oh, that’s one of my big pleasures in public life, slashing
the bureaucracy. We had to fight big bureaucratic battles to get this cyber
park and to get our military to move all their key units here. But eventually,
you know, we got it done. It’s a continual battle–and it’s an opportunity.
You asked me
about our growth areas. One is technology, especially cyber. Two is new
markets, especially in Asia. Third is bureaucracy. Bureaucracy is a great
growth opportunity. Because if we’ve grown an average of 5% a year with the
amount of bureaucracy we have, that tells you how much more we could grow if we
removed that bureaucracy. So this is one of our missions: to constantly trim
the bureaucracy. It’s like weeding; it never ends. You just have to keep
weeding it out. But the trees grow, you know? And give fruit; you just have to
keep weeding out the bureaucracy. It’s a great growth area.
SF: How do you tap Israel’s extraordinary potential in natural
gas, which will be a global geopolitical game-changer if you do?
BN: Well, we got a great gift. For most of modern Israel’s
existence we didn’t have any natural resources–except for our brains. We were
fortunate–as, I think, you once said–to be the only Middle Eastern country with
practically no energy. We had to use our mental energy. But then, in roughly
the sixth decade of our life, we found gas.
We always thought
that Moses was a great leader but a lousy navigator. It turns out he wasn’t
such a lousy navigator. He brought us to a country not with flowing milk and
honey, but with a lot of gas–not manna from heaven, but manna from under the
ocean bed, under the sea bed. So, we now have to take it out. Private
companies, once they started looking for it, were able to do what our
government companies could not do: They found gas. They’ve taken some of it,
and now we have a big political battle to get the rest out and enable the
companies to make money and the Israeli government to get its share.
Obviously, we
have a lot of populism to fight. Where do you not? But I think we’ve
struck the right balance between the needs of competition and the needs of
securing our energy supplies for the future–and exporting a lot of it. And I’m
confident that I’ll be able to pass [legislation] within a short time. And then
get the gas out.
