How Israel Became an Advanced Manufacturing Powerhouse
To many minds, the thought of manufacturing conjures up images of a world in which heavy industry dominated national economies, before the latest technological revolution disrupted everything. Since the Industrial Revolution, however, manufacturing and technology have gone hand in hand. This holds particularly true in advanced manufacturing – the leveraging of cutting-edge technologies, tools, and practices to build high-tech and even low-tech products – making companies more efficient and boosting productivity.
Israel’s economic and manufacturing base is too small to compete with the likes of China and India when it comes to mass production. Yet in recent years, Israel has been an engine of advanced manufacturing’s global growth, propelled by the Start-Up Nation’s excellence in high-tech and R&D. The country has distinguished itself across high-tech sectors, including big data and cloud; sensor systems and powerful advanced processors; widespread additive manufacturing technologies; industrial robots, with rapidly developing abilities and decreasing costs; and information technology (IT), enabling new models of collaboration.
Israel’s world-renowned prowess in R&D is closely linked to its success across advanced manufacturing sectors. From its robust defense industry to the R&D centers established by companies like HP, Applied Materials, Intel, and Teva Pharmaceutical (NYSE: TEVA), Israel’s vibrant research and innovation ecosystem has powered advanced manufacturing in the high-tech space. Israel’s world-leading Internet Industry of Things (IIoT) sector serves as a prime example, enabling the next generation of industrial innovation. But it’s not only high-tech that benefits: Israel has pioneered the integration of sophisticated solutions for manufacturing in low-tech industries, including through an Israel Innovation Authority program that subsidizes low-tech enterprises, from ceramics to textiles to plastics, implementing innovative processes.
How is Israel pushing advanced manufacturing forward for traditional, low-tech manufacturers? Consider the cases of these companies:
Acquired by Avery Dennison in 2017, Hanita Coatings has developed advanced products for the label, print, appliance, and glass security industries for more than 30 years using relatively low-tech machinery. In recent years, the company integrated advanced technology and pivoted to cleantech, having developed solutions including solar control window films for reducing the energy outlay on cooling, as well as enhancements and protections for thermal insulation and energy efficient appliances.
Founded in 1991, Cabiran Investment Casting Solutions is based on Kibbutz Cabri in the Western Galilee. Using sophisticated tech-driven processes designed to achieve maximal efficiency and quality, Cabiran manufactures castings for leading Israeli and international aerospace companies, including pumps and wing tips for Honeywell International.
Publicly traded on the Tel Aviv Stock Exchange, Raval (TASE: RVL) develops advanced, low-cost flow control solutions for the global automotive industry. Its core activity is the advanced production of venting systems, with integrated solutions for gasoline, diesel, and biofuel systems. The systems are designed to maximize performance while minimizing costs and carbon emissions.
With an eye toward incentivizing innovation and startup creation throughout the country, the Ministry of Economy and Industry recently announced an initiative providing government-funded grants of up to 20 to 30 percent and a 7.5 percent tax credit for both new and established companies who set up advanced manufacturing facilities in fields like renewable energy, nanotechnology, biotechnology, and IoT. The incentive program targets development in Israel’s geographic and economic periphery.
Whether it’s emerging industries like IoT, the manufacture of construction materials or designing and producing the newest semiconductors, Israel has consistently shown a commitment to remaining on the leading edge of advanced manufacturing solutions, powering the Israeli economy to new heights — with benefits for the entire world.