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Global Industry 4.0 leaders turn to Israel for smart factory solutions

The country’s startups are prepared to develop new technologies for major international corporations.

Industrial robots. Source: Shutterstock. Industrial robots. Source: Shutterstock.

“Industry 4.0” is more than just a buzzword. The digitization of manufacturing is a global phenomenon now underway, and the world’s biggest manufacturers are looking to tiny Israel for smart factory solutions.

Over 1,000 global industry leaders and local entrepreneurs are taking part in a multi-day conference in Tel Aviv this week, II4, set on making industries smarter. Start-Up Nation Central, Grove Ventures, and Deloitte are co-hosting the II4 Week 2020 events.

On the one hand, Israel’s industrial sector is small at best. On the other, this innovation nation excels in the technologies needed for the digital transformation of the manufacturing industry to create factories of the future.

“When we look at what key technologies are needed in the Industry 4.0 revolution, we look at sensors, signal processing, data analytics, a combination of hardware and software, and these are areas in which Israeli startups excel,” Lotan Levkowitz, partner at Grove Ventures, tells NoCamels.

Levkowitz, an early-stage technology investor since 2012 in the areas of IoT, digital health, and enterprise IT, says that Israel can play a key role in what is now dubbed the fourth revolution of manufacturing.

“About four years ago, when we started looking at which multinational manufacturers could possibly enter strategic partnerships with Israeli startups, people thought we were weird. It wasn’t even a branded sector,” he says.

That makes this week’s conference all the sweeter. “All the top leaders from global industry are here. Many of these manufacturers are repeat visitors, they’ve been here before, they’ve collaborated on technologies with Israeli companies, and they’re coming back for more,” says Levkowitz, who leads Grove’s Industry 4.0 and cloud infrastructure investment strategy, and is the founder of the Israeli Industrial IoT Forum and II4 conference.

Israeli startups are renowned for their ability to adapt to new sectors and tweak their technology for new purposes. Moreover, local startups have always looked to the global marketplace to solve challenges there.

According to SNC, there are 260 active Industry 4.0 startups in Israel today. That figure is 70% greater than what it was in 2014. Funding in 2014 stood at USD 112 million and at USD 650 million by the end of 2019, according to an SNC report on Industry 4.0.

The purpose of this week’s conference is to enable connections between local startups and global industrial companies.

“Most of the startups target global players and global markets, it’s also true in Industry 4.0,” Karin Gattengo, vice president of strategic partnerships at Start-Up Nation Central, tells NoCamels. She says the global players can bring their “global needs and challenges and match it with Israeli technology.”

Manufacturers have a history of being conservative in how they run. Levkowitz says there are still companies today using machines from the 1970s because “they do what they know.”

But Industry 4.0 is pushing changes. And manufacturers, no matter how traditional, will need to keep up to stay in the game, adds Levkowitz.

Industry 3.0 introduced computers into the manufacturing processes. Industry 4.0 enhances these processes with technologies.

Israel’s forte in these 4.0 technologies, according to the SNC report, includes sensing and imaging, inspection and testing, operations optimization, cybersecurity, IoT platforms and connectivity, additive manufacturing, supply chain, robotics, and maintenance.

“Israel can be a major player in 4.0,” Gattengo says. “The strength of Israeli tech in imaging, IoT, cybersecurity, etc. makes Israel a major player in finding relevant solutions for manufacturers in taking this revolution forward.”

After all, Israel has long been involved in 4.0 technologies. They simply were not called that.

There’s Vayyar, which developed a 3D imaging sensor that penetrates through different materials, and helps in quality assurance and site safety.

Seebo’s AI platform enables manufacturers to predict and prevent manufacturing disruptions.

A map of Israeli Industry 4.0 startups by Start-Up Nation Central. Interactive Industry 4.0 startup map.

Plataine leverages IoT and AI to provide optimization software for manufacturers.

SCADAfence provides cybersecurity for critical infrastructure and manufacturing sites.

“Spread the word that Israel is a place to look for solutions,” says Levkowitz.

The word, however, is out there.

In July 2019, the World Economic Forum (WEF)’s Center for the Fourth Industrial Revolution (C4IR) program added Israel as its newest member.

“We are very excited to welcome Israel as the newest member of the C4IR network. As the ‘Start-Up Nation,’ Israel has already proven itself as a global leader in technology innovation. Now, as part of the C4IR network, it will extend this leadership to the global governance of key emerging technologies such as artificial intelligence, autonomous vehicles, and precision medicine,” Murat Sönmez, managing director of the World Economic Forum and head of the Center for the Fourth Industrial Revolution Global Network, said in a statement.

Moreover, a look at the executives in town—Dow Chemical Company, Honda Engineering, Schneider Electric, Rockwell Automation, Siemens, AB InBev, ABB, PepsiCo and others—indicates Israel is a center to look at for smart manufacturing innovation.

“Without a doubt, Israel has the world’s highest concentration of technological innovations for Industry 4.0. Schneider Electric is looking to create partnerships here for long-term growth,” Emmanuel Lagarrigue, chief innovation officer at Schneider Electric, the French industrial giant active in the digital transformation of energy management and industrial automation, tells SNC.

And while some conferences like CyberTech tend to end with announcements of acquisitions, Gattengo says strategic partnerships will boost Israel’s status in 4.0.

“Acquisitions are not necessary in any startup field. Most of the startups are eager to partner with global players to learn their needs and match them with their solutions. In general, in the market, startups are not necessarily looking to be acquired but to be long-term partners along the way and strategic partners,” she says. “We’re very proud of this conference that we created with our partners. Israel can be a global player.”

This article first appeared in NoCamels, which covers innovations from Israel for a global audience.