Israel and India could unleash up to $25 billion in sales in cross-border investments, a report by Dublin-based consultancy Accenture and India’s National Association of Software and Services Companies shows.
The report was released to coincide with the first-ever visit to Israel by an Indian prime minister, Narendra Modi, last week, to mark 25 years of diplomatic ties between the Asian giant and the startup nation.
The study calls for the creation of the Israel India Startup Platform for Innovative Research and Entrepreneurship (or IINSPIRE), a program that will build upon a combination of India’s software talent pool and product development abilities with Israel’s “chutzpah,” hardware engineering talent and deep technology knowledge.
“Israel has built strong capabilities in technology, intelligent systems, defense and cybersecurity, and is setting global standards in areas such as artificial intelligence (AI) and machine learning. India, meanwhile, has a large domestic market, a large public sector, big corporations, strong IT services and an expanding landscape of product start-ups,” the report said.
Combining complementary strengths
“By combining such complementary strengths, the two nations can unlock new value not only for themselves and each other, but also for other economies around the world.”
The mutual benefits that can be reaped are multifold, the report said. Israeli startups can use Indian markets for growth and as a test bed for their technologies, and also can leverage India’s manufacturing and services capabilities along with its huge software talent base.
India can benefit from Israel’s strength in core technologies, and through collaboration the two countries can co-develop cost-effective products that can be sold globally. Sectors such as agriculture, defense, deep technology, healthcare, life sciences and energy stand to benefit the most from such collaborations, the report said.
Some challenges need to be addressed, however. There is an awareness deficit of the strengths and complementary traits of the two countries among the innovation ecosystem of both nations, the report’s survey showed. Only 19% of the survey respondents believe that Indian and Israeli entrepreneurs are fully aware of each other’s strengths. Additionally, only 11% believed that there is enough awareness of opportunities that collaboration could unlock.
In addition, Israeli and Indian entrepreneurs must adapt to the different decision making, management and communication styles, and products need to be tailored to suit the local market.
The report call for a systematic approach and an institutionalized framework to make the most of India’s and Israel’s complementary strengths.
It recommends key steps for realizing what the study calls Vison 25/25: develop deep-tech R&D corridors across India and Israel — chains of connected technology parks that support innovation in sectors that India and Israel consider high priority; set up an Indo-Israel exchange program for students and innovators to create a better cultural understanding among the two ecosystems; set up programs that boost mutual awareness; and trust and define the right procurement policies.
During Modi’s visit, Israel and India signed an accord on July 4 to set up the “Israel-India Innovation Initiative Fund,” which aims to foster technological cooperation between the two countries, leveraging the technological strengths of both nations. Each country will allocate $4 million per year over a five-year period for the fund’s activities, for a combined total of $40 million, according to a statement by the Israel Innovation Authority, which will run the fund on behalf of Israel.
Raghav Narsalay, managing director at Accenture Research, told The Times of Israel that the innovation initiative fund that was set up last week is a step in the right direction, and “can in fact pick up some of the ideas that we want to work upon in the context of the framework and move ahead.”
The Accenture/NASSCOM report was based on discussions with 57 entities of the technology ecosystems of both nations, including startups, education institutes, large businesses, government officials and VC funds, the report said.