Stalled-Up Nation? Report shows loss of innovation momentum in Israel

Companies in the center significantly outperform companies in the periphery in almost all innovation criteria, the report found.

By EVE YOUNG DECEMBER 26, 2024 16:30

Israeli national flags flutter in front of an office tower at a business park also housing high tech companies, at Ofer Park in Petah Tikva, Israel August 27, 2020. (photo credit: REUTERS/Ronen Zvulun)

The Start-Up Nation is facing a number of challenges in innovation that may put its status as an innovative powerhouse at risk, according to a 2024 report by the Israeli Institute for Innovation Assessment (INSA) and Ono Academic College released this week.

Just 2% of the organizations in the country are working to advance disruptive innovation - innovation that would disrupt existing markets, which researchers said enables the creation of new opportunities.

Some 55% of organizations are focused on "conservative innovation," the report said, explaining that this means that they are focused on improving existing products and struggling to get out of their "comfort zones."

"Without promoting widespread innovation in all branches, Israel will have a hard time maintaining its standing," said INSA CEO Avi Sagi.

Addionics - Israeli battery technology start-up (credit: Addionics)

The report also said that Israeli companies are setting and using unclear goals and progress indicators, saying that they are "struggling to evaluate their success and to direct future processes."

"If you can't measure success, it's hard to lead meaningful change," said Michal Zigelman, a founding partner of INSA.

Geographic challenges

Another challenge highlighted in the report was significant gaps between Israel's center and geographic periphery.

Companies in the center significantly outperform companies in the periphery in almost all innovation criteria, the report found.

Challenges to organizations operating in Israel's North and South include a lack of resources and training, the report noted. Advertisement

This is a problem but also an opportunity, according to the organization. "Investing in innovation infrastructure in the periphery can launch the entire economy forward," Sagi explained.

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The report was compiled after researchers surveyed 200 organizations across 35 industry branches. The companies were asked about 15 different categories through 85 questions, the report noted.