The Israel Innovation Authority, the body in charge of setting out the nation’s tech policies, has warned that the so-called Startup Nation is “falling behind in the race for AI-based technological dominance” and, without the allocation of appropriate resources and tools, risks losing out to other nations.
“The race for leadership in artificial-intelligence-based technology has begun,” said Aharon Aharon, the CEO of the Israel Innovation Authority, in a phone interview with The Times of Israel, as the authority released its 2018-19 annual report. “AI will be with us for very many years, and without a massive national program for Israel we’ll trail the rest of the world.”
Israel “must close the gap” with the countries that are making enormous investments in artificial intelligence infrastructures, he added.
The authority is calling for “the consolidation of all sectors — government, academia, and industry — to establish a vision and a strategy on AI for the Israeli economy.”
Artificial intelligence — the field that gives computers the ability to learn — has been around since the 1950s. It is now enjoying a renaissance made possible by the higher computational power of chips. The field is expected to grow at a compounded annual rate of almost 37 percent from 2018, and is expected to be a $191 billion market by 2025, according to MarketsandMarkets, a research firm.
Artificial intelligence and machine learning are used for a wide range of applications, from facial recognition to detection of diseases in medical images to global competitions in games such as chess and Go. Nations are already investing huge amounts of money in the field, which is expected to be the heart of technology going forward and a key to economic growth worldwide.
“Countries and companies that lead this wave of innovation will then get the lion’s share of the ensuing profits, while those who lag behind will be forced to make do with the leftovers,” the report said.
More and more countries are developing national artificial intelligence strategies, the report said, with 17 countries — including Canada, China, Denmark, France, India, South Korea and Taiwan — having already declared their AI strategies, some with an investment of billions of dollars. China, for example, has invested over $10 billion in the field, followed by South Korea, with $2 billion and France with $1.5 billion, the Israel Innovation Authority report said.
“We must acknowledge the fact that we are already falling behind in the race for AI-based technological dominance,” the report said. The heavy investments in AI infrastructure planned by other governments “should be a warning signal for all of us. If appropriate resources are not allocated, and if we do not develop suitable tools to advance Israeli leadership in AI-based technologies, we risk lagging behind.”
Israel’s strategy should address a number of key challenges, including strengthening academic research in AI; boosting human capital in the sector; developing computer and data infrastructures for R&D to serve both academia and industry; and helping implement AI technologies in all industries.
Governments need to take a role in developing AI technology both because it requires heavy and long-term investment in infrastructure that is generally too expensive for companies to undertake on their own and because a regulatory framework is required to ensure the smooth transition of decision making from humans to machines.
“The transition to accepting decisions made by algorithms, particularly in critical domains, calls for appropriate regulation,” the report said. “In AI, decisions are made by non-human entities. As a result, there is a shift in the concept of culpability.”
“The State of Israel is facing significant challenges in the field of innovation during a period in which artificial intelligence is establishing itself as the central technological platform of our generation. In recent years, many countries rich in resources have realized the power of innovation as key to economic growth and are investing huge sums in innovation and in research. These challenges will occupy center-stage in the Innovation Authority’s activity in the coming years,” Ami Appelbaum, the chairman of the Israel Innovation Authority, wrote in the report.
In previous technological waves of the digital revolution, Israel has always been among the countries forging the path forward — like in the fields of communications, where the defense industry played a key role, and software, led by academic researchers. The government also played key roles in promoting these fields, and it should similarly play a role in boosting the development of AI technologies, the report said.
According to IVC Research Center and attorneys ZAG-S&W 2018 Israel Tech Funding Report, software firms specializing in AI technologies raised a total of $1.89 billion in 171 deals in 2018, up from $1.5 billion in 2017 and just $397 million in 2013.
“Despite the substantial threat posed by the growing global competition, we believe that Israel has an excellent chance of being a technological leader in the era of AI,” the report said.
Israel’s innovation ecosystem is “mature and sophisticated,” its academia has strong computing skills, and the nation has skilled human capital, with entrepreneurs who “stand out in their daring and their innovation.”
“While a small country like Israel cannot compete with huge investments in China, in Google or in Amazon, over the years, Israeli companies have managed to be technological leaders in exclusive fields, and have been able to compete with resource-rich organizations. These are all important assets that will help Israel get on board with the next wave of technology — the wave of AI — if we succeed in paving the way for the industry,” the report said.