Israel is famed for its excellence spanning various sectors and industries, by virtue of its highly-skilled workforce, entrepreneurial thinking, groundbreaking research capabilities, high concentration of MNCs, collaborations with the Israeli academy, its defense industry and advanced manufacturing abilities.
This has culminated in the development of Israel’s Islands of Excellence, a manifestation of excellent performances, high growth rates and significant manufacturing potential, based on the following fields: medical and cosmetic laser; advanced manufacturing in the plastics industry; batteries for electric vehicles; metrology and testing in the semi-conductor industry; digital and 3D printing; robotics; composite materials for aviation; and UAVs and drones.
One of the more distinguished islands, one that have garnered significant foreign investment in recent years, robotics, will be the focus of this blog.
The Israeli robotics market, modest in scope, garners worldwide repute. Israeli robots change the lives of millions around the world, as they revolutionize spinal surgery, secure houses, rescue trapped humans, assist senior citizens with daily activities and more. Moreover, the robotics market is slated to disrupt all industries in the coming years, particularly with driverless cars, robotic assembly-line workers, and robot-caretakers for the elderly already among us.
As it stands, four percent of Israeli technological development belongs to the robotics industry, according to a report by Start-Up Nation Central, and that number is expected to grow at a rapid pace. For example, Mazor, which manufactures robotics for the medical field, has grown 100% annually in recent years, and Friendly Robotics, which manufactures robots for domestic use, doubled itself between 2012-2015. In 2016, exports of machinery and equipment, which includes robotics, increased by 4% compared to 2015, and totaled $5.2B, according to the Israel Export Institute, 2018.
Approximately 80% of the products in the Israeli robotics industry are exported, compared to only 60% in the Israeli high-tech industry. Some Israeli Robotics companies export as much as 98% of their products.
Such is the demand and necessity for robotics that the world market is expected to increase at an exponential rate over the coming years. In 2017, the worldwide robotics market was worth an estimated $30B, which pales in comparison to forecasts estimating $80B in 2020 and $400B in 2027, according to the International Federation of Robotics, 2018.
The Israeli robotics market will no doubt hope to take advantage of this opulent market. As such, three of the foremost leading countries in robotics have cast admiring glances towards Israel in recent years.
The greatest demand for industrial robots is currently in the Chinese market. The field of robotics and automation is a top priority in China’s current five-year plan, and the country is pinning its hopes on a reduction in the labor force costs that have become more expensive in recent years. China chose to invest in Israel in order to achieve these goals.
Japan, the country where robotics is the most developed, operates and invests in Israel; the Japanese company Yaskawa Electric, ranked second in the world in the installation of industrial robots, has a subsidiary in Israel. In 2015 it launched a technology center that develops robotics and drive control, and established a fund of tens of millions of dollars for investment in Israeli startup companies in the field.
South Korea is also interested in the Israeli robotics industry. The local government has invested about $100M a year since the early 2000s, and is a major destination for export and cooperation. In 2018, the Korea-Israel Foundation, together with the Israel Innovation Authority, initiated the “Lighthouse” program to promote cooperation between the two countries in the field of autonomous robotics.
In order to meet this demand, the Israeli government offers an assorted range of incentives in three main categories: investments and manufacturing; employment incentives; and research and development incentives., taking the form of various funding, grants and tax benefits.