Ministry of Innovation report reveals significant gaps in the work environment, data availability, and policy, alongside research and economic potential
First and foremost, the local sector is facing a number of worrying trends: a decrease of about 28% in the number of scientific publications in artificial intelligence in Israel in recent years, compared to an average decrease of about 7% in OECD countries. At the same time, the growth rate of skilled human capital – required to develop and implement cutting-edge AI technologies – ranks ninth in the world, but its slow decline could harm the ability to maintain a competitive advantage.
The local operating environment also points to weakness: Israel ranks only 65th out of 83 countries in the Tortoise Global AI Index for regulatory environment, legislation, and public opinion. This situation may create uncertainty for entrepreneurs and investors, and slow the entry of advanced companies and technologies. In addition, computing and communications infrastructures do not meet the level required for advanced research and industrial development: the ranking of 26th out of 83 reflects gaps in electricity, internet capacity, and cloud computing availability at a national level.
The lack of a comprehensive government strategy is reflected in Israel’s 62nd place ranking in the National Policy Index for Artificial Intelligence – a situation that requires setting a long-term technological vision, permanent budget allocation, and integrating government and academic bodies in implementation and oversight. In addition, the availability of data for research and development is very limited: Israel ranks only 25th out of 188 countries in terms of availability and accessibility of open databases, which limits innovation based on intelligence from large knowledge bases.
These gaps define goals for action:
- Strengthening academic research – Encouraging publications in leading journals and international collaborations, alongside special grants for researchers developing innovative applications in artificial intelligence in the fields of medicine, energy and infrastructure.
- Infrastructure upgrade – Investment in electrical capacity, communication bandwidths, and supercomputing centers (HPC), to enable experiments and training processes of advanced models.
- Unified government strategy – Establishing a regulatory-advisory body that brings together the Ministry of Science, the Ministry of Finance, and the Privacy Protection Authority, which will produce an up-to-date national plan with timetables and performance indicators (KPIs).
- Regulatory and ethical frameworks – Legislation that will address the use of AI in sensitive areas (health, law, and security), regulate algorithmic liability, and import international cybersecurity standards.
- Opening databases – Establishing a government portal that brings together government, academic, and industrial information under an open license (Open Data), alongside developing tools for sharing and analyzing data.
Alongside these overwhelming challenges, there are also important advantages to build on. Israel is developing a vibrant ecosystem: over 2,100 AI startups have raised approximately $78 billion to date, a ratio that places Israel first in the world relative to population size. In addition, the rate of employees reporting AI skills on their LinkedIn profiles stands at 1.13% of all employees – the highest rate in the world – and is comparable to leading countries such as the US and China.
In academia, too, we see signs of strength: Israeli researchers were involved in the development of about 4% of the world’s major machine learning systems in 2023, 30 times our share of the world’s population, and Israeli publications in the field have averaged over 40 citations per article – over six times the global average. These metrics indicate the depth and quality of research, and are of great importance in implementing AI solutions in areas such as precision medicine, smart agriculture, and autonomous transportation.
Implementation highlights:
- Inter-sectoral cooperation: Balance between industry, academia, and government, within the framework of inter-ministerial forums and with the support of the Ministry of Finance.
- Personnel training: Establishing short training courses and subsidizing professional development, with an emphasis on minorities and women, to increase diversity and expand the pool of experts.
- Responsible innovation: Developing ethical guidelines for the use of AI in areas with great social and economic impact, such as automated judgment systems, personalization systems on social networks, and security-oriented systems.
- Cloud infrastructures streamline: Creating a government subscription model for purchasing cloud services, which will reduce costs for public entities and allow them to implement advanced models without heavy initial capital investments.
Israel is facing a crossroads today: If it does not immediately cultivate human capital, update its communications infrastructure, and formulate a clear political-regulatory framework, its ability to cope with the challenges of the future and implement AI technologies on a scale that allows it to maintain its competitive advantage will be diminished. At the same time, it must continue to cultivate the innovative system of startups and take advantage of the research and economic advantages that it thirsts for empowerment. Only in this way can Israel continue to be a leader in the international arena of artificial intelligence.
Minister of Innovation, Science and Technology Gila Gamliel: "The ministry will continue to lead steps that will ensure Israel's future as an innovation powerhouse, while reducing gaps and making opportunities accessible to all populations in the country."
