INNOVATION AND ENTREPRENEURSHIP
BASED ECONOMY:
Lessons from Israel for
Vietnam
Prof. Shlomo Maital
Technion-Israel Institute of Technology
Dr. Tran Luong Son
Chair VietSoftware
Samuel Neaman Institute - Technion, Israel Institute of Technology, Haifa 32000, Israel
Ministry of Planning & Investment
Why Vietnam and Israel are alike!
Ancient civilizations, once independent,
lost it, regained it with a hard fight
Hard-working determined stubborn people
Bright creative young people
Eager to grow: Growth Mindset
Israel 1948
600,000 people
$1,500 GDP pcap
2014
8,13m people
$31,500 pcap
Zoom Out (the World Economy)
Zoom In (Vietnam)
Samuel Neaman Institute - Technion, Israel Institute of Technology, Haifa 32000, Israel
What Can Or Does Vietnam Do/Make
Better Than Anyone
Else in the World?
68th in Global Competitiveness
75th in “macroeconomic situation”
85th public institutions
104th property rights protection
109th perceived corruption
81st energy, transportation infrastructure
49th labor market
34th market size
99th Technological readiness
118th speed in adopting latest technology
106th degree of business sophistication
A country is a business.
Vietnam & Israel are businesses.
What is your strategy?
What is your unique value proposition?
What does each Vietnamese
need to do
to implement the strategy?
Vietnam:
“Jump the Queue
Innovation Driven
Efficiency Driven
Factor Driven
Do All
Three
…at once!
We CAN Work together!
* agrotech
* cleantech
* IT/software
* defense
*
biotech
Foster world-class elite science and
technology universities
Technion, Israel Institute of Technology was
established in 1912 (before Israel became an
independent nation). A small university, but
Technion had three Nobel Prize winners, and
4 other Nobel laureates have been associated
with it. Technion has created a world-class
high-tech industry through its graduates. One
of every 4 graduates of Technion start their
own business.
Technion’s Graduates
Incredible
Facts
Number of Graduates
Cumulative Number of Graduates from Technion
1911-2011
Since its establishment, over 70,000 Technion
graduates entered the labor market in Israel and
abroad; 60,000 are still active
Samuel Neaman Institute - Technion, Israel Institute of Technology, Haifa 32000, Israel
Graduates' Contribution to Technological
Entrepreneurship and Innovativeness in the Economy
•23% or 13.5 thousand graduates founded at least one new
company (startup).
• Among women it was found that about 15% of them (about
one in seven) established a new company during their career.
Incredible
Facts
Samuel Neaman Institute - Technion, Israel Institute of Technology, Haifa 32000, Israel
Strategy for government intervention
(Socialist Republic of Vietnam)
US software companies dominate the
world market, in part because of the large
investments of the defense industry in
universities and infrastructure. Internet
was born from the US Department of
Defense's ARPANET at UCLA. Israeli
investment boom began when the
government established Yozma,
specialized state venture capital for
technology.
Globalization
Nov. 9 1989 “Fall of the Wall”
Implications for Vietnam
“buy/sell anything/anywhere/anytime
to anyone”
Samuel Neaman Institute - Technion, Israel Institute of Technology, Haifa 32000, Israel
In today’s globalized world
(“buy/sell anything, anywhere, to anyone,
any time”)
what is “Socialism?”
Wealthy: Earn 8%, wealth doubles in 9 yrs
Middle class
Poor
Little or no wealth.
Make entrepreneurship viral
In Israel in 1981, Zisapel brothers founded RAD
Data Communications. Chairman Yehuda Zisapel
initiated a model that engineers, who left RAD to
open their own company, receive advice and
financial support from RAD. The result was that
128 companies were born, forming a combined
15,000 employee cluster with billions of dollars
in exports for Israel.
1
7
RAD
128 startups from 1 startup (1981)
Samuel Neaman Institute - Technion, Israel Institute of Technology, Haifa 32000, Israel
RAD Group Today: $1.4 b. Revenues
3,500 workers
No holding company. Each company in the
group operates independently, under
a “common strategic umbrella”.
RAD is very big…
but ‘feels very small’.
Whenever a market opportunity is identified,
a new business is created. This occurred
128 times!
18
1
9
3n
59,000
Samuel Neaman Institute - Technion, Israel Institute of Technology, Haifa 32000, Israel
20
Doing business with neighboring countries
Vietnam should pursue a strategy like Singapore.
When Common Market for East Asia (AEC) gets
launched in 2015 Vietnamese companies may
have great business opportunities in the region,
or may lose positions even at home country,
depending their competitiveness. Vietnam has
Opportunities in the EU, as your Prime Minister
has recognized.
Geopolitics is crucial – make friends to
build your markets. Be relevant. Be
constructive.
Quality and effectiveness of foreign
investment are important
Few poor countries can meet their own needs of
finance. Attracting external investment is
necessary. However type of investment is
no less important.
Woo the FDI / foreign investor
Vietnam should pay attention to the quality
and effectiveness of FDI projects to improve
its competitiveness. Do not just look at GDP,
or depend on factors such as availability of
cheap labor, land, natural resources and
conditions...
Israel: $76 b. in FDI, 4% of GDP in 2013
Maximize value-added, leaning toward
innovation and high technology
Israel has become one of the leading countries
in high technology products with more market
dominance, especially in information technology,
defense industry.
Proximity to the market is a major advantage of
producing goods. Vietnam needs to maximize
business opportunities and value added in the
domestic market. It is not acceptable for Vietnam
to lose competitiveness especially in
agriculture and tourism.
However, it is even more important to bring high
technology (such as biotechnology, information
technology) to production and business activities,
together with the local advantages.
GDP per capita PPP ($) = -15 + 0.572 Competitiveness, R2adj = 0.596
(9.0)
ISRAEL
Impact of R&D expenditure per student
Incredible
on per capita GDP
Elasticity of GDP per capita in relation
to the expenditure per student on R&D
Facts
0.90
SWE
0.80
R2 = 0.89
0.70
0.60
ISR
DEU
UK
0.50
0.40
0.30
0.20
AUT
FIN
HUN
POL
SVK
0.10
DNK
FRA
IRE
NLD
USA
TUR
0.00
0
2000
4000
6000
8000
Expenditure per student on R&D (in PPP $)
Increasing Israel’s R&D spending per student to
the level of Sweden will cost an added $375 m.
yearly – but will raise GDP by $600 m. yearly!
Samuel Neaman Institute - Technion, Israel Institute of Technology, Haifa 32000, Israel
Celebrate Failure!
29
Wheelchair to Marathon
Amazing
stories
Dr.32000,
Amit Goffer
Samuel Neaman Institute - Technion, Israel Institute of Technology, Haifa
Israel
Bible:
“Come, let us reason together”.
- Isaiah
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