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How smaller Japanese companies can benefit from Israeli technology and innovation

Image compliments of ReWalk Ltd
Image compliments of ReWalk Ltd

Many mid-sized and smaller companies in Japan are looking for new ideas to help them increase their sales. Israel is known for developing such ideas in numerous fields and offers such companies great potential for their expansion.


Large Japanese companies like Sompo, Mitsubishi, Toyota and Denso are already active in Israel. They have local teams working for them to find exciting new possibilities and introduce them to the Head Office in Japan. Included below are examples of current successes in Japan-Israel co-operation.


How can the smaller companies follow this path and also find good technology partners in Israel for business growth?


To answer, we need to ask several more questions:

1. How strong is innovation in Israel?

2. How have the two countries bonded together?

3. What is the best way to investigate Israel?

4. Can the search be done via long-distance?

5. How long could such a search take?

6. What to expect during a first-time visit?

7. How to follow up after partner introductions?


Innovation and Israel

There's a lot of information about this on the Internet, so here are just some highlights.  The country is highly focused on inventiveness – with around 6,000 start-ups. But it is better to focus on some 2,400 start-ups that are more mature and no longer in their early stages. The high-tech industry and innovators are spread out in all parts of Israel.


Society in Israel is closely bound, often formed through links at school and in the army. The informality of business life and the scope of contacts is a factor that helps people to form tight teams with shared goals. Initiatives speed up because people here tend to communicate by phone rather than in writing. If you fail, there's no stigma – it's simply regarded as a stepping stone to your eventual success.


Japanese connect with Israelis

The first business connection between the nations was made in 1954 via the Israel-Japan Chamber of Commerce, which was established at that time. But it took 61 years until business relations begin to warm up. This happened in 2015 when former Prime Ministers Shinzo Abe and Benjamin Netanyahu took some bold initiatives. The number of visitors from Japan is still small – it was just 21,600 in 2019. This represented 0.6% of all visitors. By comparison, five times more Chinese visited Israel in that year.


ミーティングをする人々

The good news, however, is that the number of Japanese companies investing in Israel has surged dramatically. In 2014 there were 26 companies. By 2019 the total had increase by 250% to over 90 companies.  In that same year, Japanese investors were involved with over US $1.5 billion worth of investment deals that were signed for Israeli high-tech companies. The main areas of interest for Japanese industry has been Artificial Intelligence, Cyber Security, Automotive, Big Data, IoT, Fintech and Digital Health.


Preparation for a partner search

No successful partner search can be done without gaining a good understanding of the client's plans and objectives. If these details are prepared in a document that gets the client's approval (in English and Japanese), it can then serve as the basis for the search effort. The process of creating such a document allows both sides – Israeli and Japanese – to be precise about what is said and expected.


Potential technology partners should be shown this document as well – so that they can say “Yes, we are a good fit”. In addition, the client should get background details about each candidate. Such stages – confirming and checking all the time – are essential to ensure that the client is given relevant results.


Using a search partner in Israel

Many companies in Japan search for technology partners in Israel via an Internet search. They can also get recommendations from Government-linked institutions like Embassy commercial staff and JETRO as well as the Israel-Japan Chamber of Commerce. However results can be disappointing.


Valuable connections often don't appear in an Internet search because dynamic young companies prefer to keep key information in more discrete places. If local people in Israel can be involved in the search process, this helps greatly to ‘open the doors'. Finding the right contact (who has valuable information to offer) may take extended time and many phone calls. It demands determination and persistence.  


The large Japanese companies already prepare for this: Sompo Digital Lab, NTT Innovation Lab, Mitsubishi Innovation Center, Mahuro Israel Innovation Lab, SBI JI Innovation Fund, Denso Israel Innovation Lab and more. Smaller companies who define their own specific needs can also search the Israeli market in a similarly intensive manner.


The time needed to find contacts

If the partner search is undertaken in a methodical way, with proper preparation and prompt feedback from the client, it will probably take around 10-12 weeks to take the process from the project start to the visit date.


Note that a lot of communication is involved: between the search agency and the Japanese client; contacting many potential Israeli companies; selecting the ones that have potential; getting detailed information from them and then presenting it to the client; setting up meetings for the client.


During the first-time visit

エルアル航空の飛行機

In today's climate, it may be better to start with a Zoom meeting before setting up an actual visit to Israel. The search process will deliver you a few names. So in a video meeting you can confirm that you and these companies are of the same mind. This ensures that the Israel visit – when it happens – will achieve more.


It's a long way to come – 9,000 km each direction – with significant investments in time and money. Surely the desired result is to return to Japan with some valuable contacts in hand and a clear path towards the important next steps?


A visit is the opportunity to achieve things that you cannot achieve in any online way. This is how smaller Japanese companies can truly benefit from Israeli technology and innovation.


Many first-time visitors from Japan say afterwards how pleasantly surprised they were – by the openness and dynamism of Israeli society, the friendliness of the people and the admiration that Israelis have for the Japanese. It's a trip worth taking – and a trip worth repeating as your business grows further.


Follow-up after returning to Japan

Hopefully you will make good progress during your visit. How best to follow up on that? Here again, your relationship with your Israeli search partner can be an important asset for you – in the same way as the members of Innovation Labs in Israel help their Head Office in Japan.  Your search partner will check up on details, provide and get more information for you and constantly update you about progress.


Examples of Japan-Israel co-operation

During six years of growing bi-lateral activity, there have been many examples of

co-operation and success:


Yaskawa, a leading Japanese robotics company, invested in Israeli ReWalk, which has developed a wearable robotic exoskeleton. This allows fully paralyzed people to stand upright, walk, turn, and climb and descend stairs.


Sumitomo Corporation has invested in several Israeli high-tech start-ups. One of them is Ottopia, which provides a platform that enables humans to safely control any type of vehicle from afar.


Totota Tsusho signed a distributor agreement with Cybellum Technologies, an Israeli cyber-security company that detects and analyzes vulnerabilities in vehicle software. The target is Japanese automakers who will use the software.


Mitsubishi's corporate venture capital company raised $20 million to invest in Fundbox, an Israeli B2B payment and credit network company.


Mitsui Groupinvested in two Israeli agri-technology firms. Kaiima has a technology platform that enables plant breeders to increase the productivity and efficient use of resources related to food and feed crops. Phytechs has plant sensors that send constant data about the health of crops and the status of plant conditions.


These have all been initiatives taken by Japan's larger corporations. However there is every reason for smaller Japanese companies to also gain similar technology benefits from Israel – provided they follow a similar methodical path.


Text:Mike Druttman(Keyzuna)


Mike Druttman lived in the UK until his early adult years. He then moved to Israel, where he has specialized in Business Matching and English Copywriting. His special bond to Japan prompted him to establish Keyzuna in order to help Japanese companies who need assistance in Israel. His website is www.keyzuna.com