The dramatic changes in the global motor vehicle industry and in the world of mobility offer many opportunities for new players from additional fields to join the transportation industry and shape the revolution. Large technology companies such as Intel, Google and Apple have been working for some time on developing a prototype of autonomous vehicles, alongside car manufacturers such as Toyota, General Motors and Tesla and, on occasion, in cooperation with them. In 2016, 1.1 billion USD were invested in ‘Auto tech’ startup companies and in 2017, investment is expected to total three times that sum.1
Moreover, large-scale technological revolutions frequently create entirely new markets that are characterized by extremely rapid growth. New and innovative companies at the forefront of the revolution are therefore presented with a golden opportunity to rapidly become very large and profitable. This phenomenon was demonstrated well by the internet giants during the previous decade. In addition, the changes in the structure of the markets that are expected to be influenced by the autonomous vehicle revolution, coupled with the economic and social changes it embodies, will create many opportunities for the growth of completely new business models, generating high economic value for their developers.
The technological challenges together with the economic and social changes detailed above, create a great opportunity for Israeli industry to take part in the technology race and to capture key positions in completely new markets. Already today, approximately 450 companies in Israel are engaged in smart transportation fields such as travel sharing, communication, sensors and control systems. The acquisition of Mobileye by Intel this past March for 15.3 billion USD, one of the largest transactions in the field of Auto Tech in 2017, has focused the attention of global corporations and investors on the tremendous potential of combining Israeli technological excellence with the autonomous vehicle revolution.
In order to accelerate the development of Israeli industry in the field of autonomous vehicles and smart transportation, there is profound importance in developing local infrastructure to serve Israeli companies in the development and commercialization of technologies and enable them to implement innovative business models. Also needed are the organization of a regulatory and physical trial infrastructure that will meet the relevant needs, and the opening of local transportation systems to innovation so that Israel may serve as a primary market for local initiatives in their global growth programs. This year, the government in Israel launched a national program for the advancement of smart transportation with the objective of encouraging the integration of advanced Auto Tech technologies into Israeli transportation systems, thereby accelerating the development of Israeli technology industry in this field. Among others, this will be achieved through the establishment of a designated trials center and adaptation of the regulatory environment. The Innovation Authority is playing an active role within the framework of this program (see below).
The Government is acting to develop Israeli industry in the field of autonomous vehicles and smart transportation.
In January 2017, the government authorized a 5-year program to promote smart transportation in Israel. The program was allocated a designated budget of approximately 240 million NIS, and was led by an inter-departmental team headed by the General Director of the Prime Minister’s Office and the Director General of the Ministry of Transport. The Innovation Authority, together with the Fuel Choices and Smart Mobility Initiative in the Prime Minister’s Office and other bodies, will take an active part in implementing this program.
The program will encourage the integration of advanced technologies in Israeli transportation systems and the development of Israeli industry in a range of avenues: creating vital infrastructures for development and trials, promoting collaborations between academia and industry, revising regulation to enable the assimilation of innovative transportation technologies and new models of mobility, promoting a supportive business environment in the entrepreneurial community and others. Specifically, as part of the program, a center for trials of smart transportation and autonomous vehicles will be established and field tests will be promoted along with pioneering ‘auto tech’ initiatives. The entrepreneur community ‘Ecomotion’ is another framework for State activity in developing the smart transportation technological industry. ‘Ecomotion’ was founded in 2012 following a joint initiative of the Fuel Choices Initiative, the Ministry of Economy and Industry, the Israel Innovation Institute, and Israeli industry, with the objective of supporting the smart transportation sector and positioning Israel as the center of global innovation in the field. The community conducts workshops and various events that bring together young and experienced entrepreneurs, market leaders, international and local industrial companies, technology professionals, policy makers, academic scholars and investors.
- CB Insights (May 2017). The State of Auto Tech