After years of avoiding Israel, Japan appears ready to embrace the Start-Up Nation. This week a group of Japanese officials and executives of Toyota, the car manufacturer, will be in Israel to shop around for technologies that could become part of the next generation of Japanese smart cars.
Japan had long been an immovable object when it came to developing business relations with Israel, reluctant to engage Israel because of fear of upsetting its Arab oil suppliers, or because of cultural differences. Now things have begun to change, after Japan Inc. met the irresistible force of Israel’s technology success, said Vered Farber, director of the Asian Institute, an Israeli organization that has long been seeking to persuade both Japanese and Israeli companies that there is much to be gained from working together.
“The Japanese finally realized that there is a Silicon Wadi in the Middle East that rivals California’s Silicon Valley, and they don’t want to get left behind,” said Farber. “It took them a while to realize it, but they have finally begun to understand that Israel may have what it takes to keep their economy dynamic and growing.”
The hackathon this week by Toyota ITC (InfoTechnology Center), the company’s Israeli R&D center, is the first-ever tech event by a large Japanese corporation in Israel. During the hackathon, which takes place Thursday and Friday, Israeli programmers and entrepreneurs will develop projects for “connected cars” — vehicles that upload and download information to and from the cloud, enhancing safety and the driving experience, Toyota said. Hopefully, Toyota said, “participants are going to hack and create new services.”
Toyota is just the first of many Japanese companies planning to engage with Israel. “Last May, Prime Minister (Benjamin) Netanyahu visited Japan and met with a lot of business people and government officials,” said Farber. Although many of those meetings were not reported in the media, they helped cement business relations between Israel and Japan – to the extent that Japan’s Economics Minister, Toshimitsu Motegi, led a large delegation to Israel, just as Operation Protective Edge was getting underway in the summer. Even after the war broke out, Motegi and his entourage stayed on, said Farber, to work on several promising agreements and deals.
While other Asian countries – most notably China and South Korea – have been snapping up Israeli tech, Japan has sat on the side watching the action. No longer, said Farber. “Japanese companies used to concentrate solely on the domestic market, but in recent years they have become much more attuned to the international market. As a result, they have become much more aware of Israel and what it offers.” The lengthy slowdown in their country – China is set to surpass Japan as the world’s second largest economy anytime now – has also awakened the Japanese to the need to innovate, said Farber, “and they realize there are few countries as innovative as Israel.”
Besides car tech, Farber said that among the technologies Japan is shopping for in Israel are cyber-security, mobile apps, and technology like robotics that can help a country with a rapidly aging population. “Japanese are the longest-lived people in the world on average, and the government is concerned about getting the resources needed to ensure the health and safety of this population,” she said. “Israeli companies have developed many technologies, from robotics to medical devices to communication tech, that can help elderly people live more comfortably and safely.”
Farber has been working on developing Israel-Japan business ties for well over a decade. “My ‘romance’ with Japan started in 1991, when I went for a two-week vacation, and ended up staying for seven years.” In Tokyo, she studied business and the local language and became a “connoisseur” of Japanese business mores. “I decided to become a bridge between Japanese and Israeli business people who want to get together but are confused about how to deal with cultural and language issues,” she said. Besides facilitating business deals, Farber runs courses for Israelis seeking to learn Japanese, as well as seminars on Japanese business culture.
Farber established the Asia Institute in 2000, with a focus on Japan. “At the time, China wasn’t on the radar, so all the talk in Israel was about doing business with Japan,” she said. At the time, though, the Japanese weren’t quite ready – but they are now. “In business it’s often about timing, and the time is now right,” Farber said.
After the Toyota hackathon, Farber believes that other Japanese car companies will follow suit and run tech events in Israel. And it’s not just cars. Already, she said, several medical device and technology companies are lined up to check out what Israel has to offer, and a road show of Israeli companies, in which Japanese executives will review Israeli medical tech, is set for next year.
“2014 was a very good year for Israel-Japan business relations, and 2015 will be an even better year,” said Farber. A high-level Israeli government delegation is set to visit Tokyo next month, and Farber believes many more deals are going to be announced in the coming months. “The governments here and there are taking this initiative very seriously,” she said. “Both sides have learned that there’s nothing to fear from each other – and in fact, there is a lot to like.”