A new study by policy and research institute RISE Israel in collaboration with Google, examining Israel’s standing in the global artificial intelligence (AI) race, reveals some worrying trends, among them a moderate rise only in investment in generative AI in comparison with other countries, and a projected shortage of local manpower in this field. On the positive side, the study finds that 50% of investment and fund raising rounds in the technology sector in 2023 were in generative AI.
According to the figures presented in the study, although Israel has a prominent position in the global artificial intelligence arena, per the Tortoise Media Global Artificial Intelligence Index, which represents a weighted average of various aspects of AI, its ranking has declined over the years.
Israel is currently ranked seventh in the world in this index, down from fifth in 2020. Singapore, which has invested substantially in AI, jumped from tenth to third in the same period. Another worrying trend revealed in the study concerns human capital. AI jobs in Israel rely on people with higher degrees, in over 60% of all jobs.
Fewer than 700 graduates with second degrees in computer science, mathematics and statistics join the workforce in Israel each year, while the number of those with doctorates in these disciplines is only about 100 annually. Moreover, about 15% of those with second degrees and 21% of those with doctorates in computer science are part of the brain drain from Israel to other countries.
Nevertheless, the study finds, about 50% of total investment and of the number of financing rounds in Israeli technology companies in 2023 were in AI companies, and these companies tend to attract more investment than others. Almost 70% of the AI companies currently active in Israel have managed to raise capital, which compares with 55% of other high-tech companies.
The study also finds that about 2,300 companies in Israel are active in AI, representing 25% of the entire local technology sector. 60% of these are in software. About half the startup companies founded in the past year report that they use AI technology. Of the companies founded in the past five years, more than a third are active in this field.
Multinationals’ R&D centers push AI
A strong point of the Israeli industry, according to the study, is the local activity of R&D centers of global companies. In April this year, more than 100 multinational companies were conducting R&D in AI in Israel. The Israeli center of Google, for example, deals in the integration of AI into the company’s products, and works on development of AI-based technologies and tools for dealing with a range of challenges in areas such as climate, health, and education.
Another example is semiconductors giant Nvidia. Its R&D center in Israel is heavily involved in the development of communications chips and components for its supercomputers. There is also the three-year collaboration launched in 2022 between IBM, the Technion, and Hebrew University, the aim of which is to promote research into new AI solutions for natural language processing, acceleration of drug discovery, and multi-cloud computing for decentralized AI.
Lagging in implementation
According to the study, although Israel excels in technological development, it is largely unsuccessful in implementing innovation. This is not just true of AI. Israel lags in the adoption of transport, finance, and education technologies, even though its technology industry produces R&D of an international standard in these areas, the report says. "Without pro-active policy, this pattern will repeat itself in AI as well, and will limit fulfilment of the social and economic potential of this technology," it states.
The aim of the study is the formulation and implementation of policy and regulation regarding AI for the benefit of Israeli society and its economy, in areas that have the most impact on the lives of Israelis.
The AI Forward project, launched within the past few days, is directed by a steering committee composed of senior people in AI in Israel, among them Boaz Maoz, managing director of Google Cloud Israel, who is the chairperson of the committee; RISE Israel chairperson Prof. Eugene Kandel; Shai-Lee Spigelman, formerly director general of the Ministry of Innovation and Science; Dr. Lital Helman, an export on law and technology; AI consultant Uri Eliabayev; Shimrit Bainhoren, CEO of the MAOZ leadership development organization; and Mahmoud Rahman, formerly deputy commissioner of wages at the Ministry of Finance.
"The AI revolution is a fact, and Israel cannot afford not to be a leading country in this field. Besides the importance of maintaining Israel’s competitiveness in the global race, adoption of AI has the capacity to improve the quality of life of Israeli citizens dramatically," Prof. Kandel said.
"The AI Forward project has set a goal of assisting in the formulation and implementation of advanced AI strategy and policy that look towards the future. I thank Google for its cooperation in this important project, which we hope will lead to a new reality in Israel," Kandel added.
Published by Globes, Israel business news - en.globes.co.il - on May 22, 2024.
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