Successful smart cities rely on more than deploying exciting new technologies in the city. They require a robust ecosystem that can support and sustain ongoing innovation, an ecosystem that comprises of local and central governments, IT companies, universities, startup companies, and citizens. But, how can such an ecosystem be built?
Last year, a delegation of specialists from the Inter-American Development Bank (IDB) and clients from the region had the opportunity to travel to Israel and learn how Israeli companies, cities, and academia are leveraging cutting-edge technologies to address urban problems and provide better services to citizens. Our purpose was to learn how a small country, with many challenges and no natural resources, has become the world’s Start-Up Nation, and how the Latin America and the Caribbean (LAC) region can learn from its experience. In Israel, we found non-stop creative, diverse, and tolerant cities and people – and delicious local cuisine! Also, it resulted in publishing the fascinating report of “Smart City Technologies in Israel – A Review of Cutting-Edge Technologies and Innovation Hubs” that investigates how the Israeli experience can contribute to the development of smart cities in LAC.
With more than 5,500 startups, Israel has a larger venture capital industry per capita than any other country in the world and it’s the 3rdcountry with more companies listed on NASDAQ, after US and China. According to the OECD (2016), Israel is the number one country in the world in investing 4.25% of its GDP in research and development (R&D), and in less than 20 years it doubled its GDP per Capita (US$19,136 to US$40,200 from 1999 to 2017) and experienced a significant increase in economic growth and digital technology.
Therefore, it is not surprising that Israel has been known throughout the world as the center of a vibrant high-tech and startup scene, boasting one of the world’s top ecosystems. This ecosystem is supported by many factors such as the availability of a highly educated workforce and venture capital, significant investment in R&D, a culture of entrepreneurship, and the ability to use the Israeli market as a testing ground for new technologies . Its components include R&D institutes, government programs, accelerators and startup hubs, mature companies, and municipalities. Together they serve as innovation hubs for cutting-edge technologies using different mechanisms. For example,CAPSULA – Smart Mobility @ TAU center is a partnership between Tel Aviv University (TAU) and the Fuel Choices Initiative of the Prime Minister’s Office, combining academic research and spin off companies.
Other startups are funded by independent venture capital and angel investors in accelerators. The Herzliya Accelerator Center (HAC), that is focused on urban technologies, is funded by private venture capital companies and supported by the municipality of Herzliya. HAC enables its startups to have access to the workspace and municipal databases and can interact with the city to run pilot programs. Several startups described in the Cutting-edge technology report began at this kind of accelerators.
In addition, the ecosystem is supported by several government agencies, and primarily by the Israel’s Innovation Authority. This authority is the major policymaking body outside of the university system in all things related to R&D. It includes functional frameworks to fund research and innovation, such as the R&D Fund, the Technological Incubators Program, and more that supports smart city startups, among other technologies.
One of the keys to the success of the Israeli approach lays in its ability to create partnerships. The Israeli startup ecosystem was built gradually in urban areas, close to the country’s leading academic institutions, and with private market collaborations. The Israeli experience provides a valuable lesson that can be drawn for cities in LAC on how to promote innovation that generates impact by the creation of meaningful synergies between the public and private sectors, academia, and citizens.
Furthermore, many of the technologies presented in the report have specific characteristics that make them especially relevant to cities in LAC. First, the technologies and the way of thinking about smart cities incorporate bottom-up innovation driven by the products of startup technologies rather than on a large-scale plan. Secondly, most of the solutions avoid the need to install costly infrastructure and are based on the use of mobile technology to communicate directly with residents, rather than installing expensive public displays. In LAC, where the penetration of cell-phones is significant, investing in initiatives that benefit from the existing hardware infrastructure can generate great impact with reduced costs.
This cutting-edge publication includes several examples of innovative solutions that could be of high value to LAC cities considering their most important challenges in areas such of security, emergency response, transportation, energy, citizen engagement, water and waste management and others.
Yin, D. 2016. “Secrets to Israel’s Innovative Edge.” Forbes, June 5. Available at:
Guest Author: Eran Toch
Eran is a visiting associate professor at Cornell Tech. He is also a faculty member at Tel-Aviv University and the co-director of the IWiT (Interacting with Technology Lab). Eran’s research group is working on usable privacy and security, large-scale analysis of interactive behavior, and smart cities. The research group is currently running several projects funded by agencies such as the Israeli Science Foundation (ISF), European Union Horizon 2020 Program, DARPA, and Israel Ministry of Science.