The Potential of the Israel-Korea Interface

| 01.08.18

By virtue of the complementary comparative advantages between Israeli and Korean innovation, great commercial potential exists at the point of interface between the two countries. Koreans are interested in investing in advanced technological developments and are constantly searching for innovative components that can be integrated into their products. Israeli entrepreneurs are also interested in technological development but additionally seek manufacturing and Scale Up opportunities that the Koreans can provide. The combination of capabilities enables the development of advanced final products and their introduction into global markets.
Two projects in which the Israeli company Sightic VisaSightic Visa1 was acquired by Broadcom in 2010. participated and that were authorized and supported by the Koril Foundation, illustrate the value in the integration of the two countries’ comparative advantages. The company, specializing in the development of advanced chips for use in cameras, developed, within the framework of two separate collaborations, advanced components for the security division of Samsung of that period, Samsung Techwin, and for LGE, that were intended for integration in security and surveillance cameras produced by the Korean conglomerates.

The Korean conglomerates are even forging a presence in the Israeli innovation system via local R&D activity and direct investment in Israeli technologies. Samsung operates a R&D center in Israel that employs approximately 200 workers. The center was established in 2007 following the purchase of the Israeli company ‘Transchip’ that developed chips for cellular cameras. Additionally, Samsung invests in Israeli startup enterprises through its own investment channels – Samsung Venture Investment Corporation (SVIC) and Samsung Catalyst; via the innovation program Samsung NEXT Tel Aviv; and the accelerator program Samsung Runway, that invest in early stages technology companies. The LGE division of LG Corporation also operates an R&D center in Israel, the focus of which is identifying Israeli technologies capable of integrating in the company’s products, and development of collaborations with the Israeli companies behind them.

The fields of academic research also possess tremendous advantages for collaboration between Korea and Israel. Korea leads the way in applied research that complements the basic Israeli research: Most Korean government ministries have several affiliated Public Research Institutes, while in Israel there is a small number of such institutes.

The Koreans bring additional important attributes to these collaborations: exemplary implementation capability, meeting deadlines, high quality service, support of minute details and an impressive reputation. Israelis, as described above, bring pioneering technologies, audacity and the appetite for risk – understanding that innovation contains no certainty of success.

The Challenges of Mutual Relations

The differences between the business approaches and accepted norms of behavior in Israel and Korea also create challenges for the realization of the potential of cooperation. The differences in the perception of innovation itself, although standing at the foundation of the synergy, may also prove to be an inhibiting factor. While Israelis understand that innovation is by definition experimental and involves risks and frequent changes, Koreans hesitate before committing to a project the success of which is uncertain, and might show low flexibility to changes required during the process of technological development.

Language differences might influence the quality of communication during collaborations. This challenge illustrates the significance of direct communication between the partners: a practical demonstration during the development process communicates technical knowledge between professionals even without words.

Different organizational culture between Israeli companies and their Korean counterparts also creates challenges for entrepreneurs interested in cooperating with each other. For example, Israeli companies are characterized by a relatively flat organizational structure and relatively open communication between junior staff and management. In Korea however, companies are characterized by more rigidly hierarchical structure that also leads to lengthy bureaucratic processes such as receiving the necessary authorizations to start a project.

Additionally, in Korea and in other eastern Asian countries, an alcohol-filled night outing with colleagues and clients at the company’s expense (termed Hoesik) is one of the keys to conducting business. This is not practiced in Israel, where socializing – including business – is frequently done in a family setting.

Naturally, it is recommended that professionals from both countries seeking to cooperate be attentive to cultural nuances such as these different local business customs, different national holidays and other situations that may pose challenges to ongoing communication.

Routine business analyses are therefore not sufficient as preparation for the creation of collaborations with companies in both countries, and significant importance should be accorded to familiarization with both cultures, particularly common business culture. In this context, the KORIL Foundation serves as a knowledge bank and acts to bridge gaps in business culture and enable effective communication between the collaborating parties.

Upcoming Objectives: Agro-Technology and the “Civilianization” of Defense Technologies

The KORIL Foundation constantly explores new directions for cooperation between Israel and Korea. As is to be expected, KORIL invests in sectors in which both economies excel, such as ICT and electronics. In recent years considerable interest has developed in applying “smart” technologies agriculture (agro-technology), robotics, in disaster management and others. As a result of experience in contending with terror attacks and military conflicts, Israel has acquired expertise in emergency healthcare and first responders’ technologies.  This experience is relevant to the Koreans who in recent years have contended with civilian disasters in the construction and maritime sectors. In the robotics sectors, a large study is being conducted in both countries towards the end goal of a joint disruptive technological breakthrough.

We wish to thank Dr. Ira Lyan for her contribution to this chapter.

  • The characterization and comparison of cultures in different countries may be inclined towards generalization. Any error on our part regarding cultural nuances in Israel and Korea is unintentional.
  1. [1] Sightic Visa was acquired by Broadcom in 2010. ↩︎

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