Toyota opens ‘brave new world’ of Israeli tech cooperation

A Japanese conglomerate’s gutsy move has given the green light for Japan Inc. to benefit from Israeli tech, says veteran Japan-watcher

Hacking away at the Toyota Israel Tech Center event (Photo credit: Courtesy)
Hacking away at the Toyota Israel Tech Center event (Photo credit: Courtesy)

In its first-ever hackathon in Israel, Japanese car manufacturer Toyota walked away with new ideas and apps that, the company said, will bring its vision of the “connected car” closer. For the company, said Yu Nagata, senior researcher of Toyota’s Department of Development and Strategic Planning, Israel was the natural place to seek out those new ideas and apps. “Toyota chose Israel for it’s because of its strategic location between Europe and Asia, its diverse population, and of course it is a center of innovation in information sciences.”

That’s not a statement a top Japanese business official would have made just a decade ago, according to Dr. Roni Bornstein, an Israeli who heads the local branch of Rakuto Kasei, a Japanese chemical and food technology and production conglomerate. “They have come a long way in their relationship with Israel,” Bornstein said of the executives who run Japan Inc. “There have been numerous political obstacles to opening up a relationship with Israel, not the least being the fear that Arab countries would stop selling them oil.” Add to that, he said, a traditional insularity and conservative approach to the outside world, both of which made Israel a very foreign entity in Japanese eyes.

But necessity is the mother of invention, as the old saying goes, and as it faces a major demographic crisis and continued shrinking of the economy, the Japanese are taking what they consider to be major risks. Israel, fraught as it is with political tension – the kind of thing Japanese usually run from – is also the Start-Up Nation, and the Japanese realize they need some start-up spirit if they are going to jump-start their economy, said Bornstein. “Under the leadership of Prime Minister Shinzo Abe it has become clear that Japan can’t afford to remain isolated any longer, and they are testing the foreign waters, not just with Israel, but in other places as well,” said Bornstein. “They are actively looking for technology, and for partners to work with in development.”

Toyota seems to have found that partner in Israel, said Toyota’s Nagata. “We came to the conclusion that Israelis not only have good technology ideas, but also good ideas on how to approach business. They think about return on investment (ROI) from the first stages of their projects. That is very unique to Israel, we have found – in Japan, for example, we have some great ideas, but not necessarily sense of how to use them in business.”

Roni Bornstein (Photo credit: Courtesy)
Roni Bornstein (Photo credit: Courtesy)

Dozens of entrepreneurs and start-ups participated in the Toyota event, which was held several weeks ago at the company’s tech center in Herzliya. The apps and projects developed fit into three categories: “Standalone software,” in which a program will be able to operate autonomously in a vehicle, without requiring direction from the cloud; car information and hardware, which integrates data about a driver’s surroundings with the car’s transport capabilities, providing drivers with better options for routes, landmarks and places to go, and other information that will ensure a more pleasant experience; and big data services, which will collect the information generated by drivers on the road to help others avoid traffic jams, reduce air pollution, driver more safely, and otherss.

The winners of the event were three projects that fit into each of Toyota’s categories. One app, called Traffic Light, seeks to gather information about traffic lights everywhere in the world, in order to generate a map, and get data about lengths of red lights and green lights. T-NET is an app that will help build a profile for a driver, based on how s/he and others drive, in order to suggest ways drivers can save gas, drive more safely, etc. And Nooly is a weather app that can pinpoint what drivers can expect the weather to be down the road, informing them if inclement weather is expected, and when they are likely to run into it.

For a Japanese company Toyota is actually making a bold move by seeking Israeli technology, said Bornstein. “The big companies all have their own research and development operations in-house, so they do not take lightly the idea of partnering with people outside the company for new products. It just goes to show how highly they think of Israeli technology, and that it is worth it for them to pursue a relationship with Israel, despite the political dangers and corporate discomfort.”

Bornstein, perhaps more than any Israeli, has seen the changes in Japan’s attitude to Israel first-hand. He’s been working with Japanese firms for over 25 years, and his company, with 1,000 employees, is the largest distributor of Asian food in Israel; Rakuto Kasei Israel is, among other things, the importer of Kikkoman soy sauce and other products.

Yu Nagata (Photo credit: Courtesy)
Yu Nagata (Photo credit: Courtesy)

And based on more than two decades of observation, Bornstein can say with full confidence, he believes, that many other Japanese conglomerates will follow in Toyota’s wake. “Once one comes here, they all will,” he said. “None of the major Japanese car nameplates, except Subaru – which is relatively small – were selling here until the mid 1990s, when Mazda decided to open a dealership in Israel. Within a year and a half, all the big companies had ‘made aliyah.’ The same thing is happening now on the corporate and business level.”

Whether or not Honda, Mazda, and Mitsubishi follow in its wake, Toyota is already planning its next hackathon or other tech event in Israel, said Nagata. “Our purpose in the the hackathon was to become familiar with the development capabilities of Israeli start-ups, and we came away very impressed. As a result there is a good possibility that we will hold another event in Israel. We hope to discover more ideas that will help the company grow.”

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