Low-tech innovation can contribute to the economy no less than high-tech

Says Yosef Schneider, the founder of the Israeli Center for Inventors, who agrees that on the one hand the government establishes committees instead of giving funds for R&D to the traditional industry and on the other hand, when it does give, the implementation is done in an ineffective way * at the opening of the largest invention exhibition in the world

Avi Blizovsky *

Yosef Schneider at the Inventors' Conference, October 2007

"We are doing what the government should have done, and more efficiently," says Yosef Schneider, founder of the Israeli Center for Inventors, which assists inventors in bringing their inventions to the market and operates the School for Inventors in collaboration with the Multidisciplinary Center for Sports at Tel Aviv University, in an interview with "Industrials". About a year ago, high-tech man Aviv Zidon entered the project, which led to the upgrading of the center and the expansion of its activities. Schneider says that Israel has a high intellectual power, but so far only the high-tech part of it has been exhausted, and the developments in the traditional industry, or as it is also called low-tech, have been neglected (with the exception of a few cases that have had international successes such as Rav Barih, Keter Plastic and Zag).
"We managed to introduce high-tech into low-tech. We wish to raise the level of reference to engineering and production, to the level that characterizes the high-tech industry." Says Schneider, the narrator, that in the last year the center developed 400 inventions and brought them to the status of start-up companies or of a retail product ready for marketing."
According to him, the government only talks and does not do. Anyone who has listened to the Minister of Science and Technology Eli Yishai and Chief Scientist Dr. Eli Ofer in recent months has noticed that they emphasize the need for investment in R&D and innovation in traditional industry and even allocated funds for this in the 2008 budget. An act because the planning of the implementation was assigned to a committee. "Already two years ago I appeared before a similar committee. I explained to them that it is possible to greatly strengthen the traditional industry in Israel, by connecting to it Israeli inventions, and Israeli marketing chains that will agree to market in Israel and the world the products manufactured in Israel. Unfortunately, nothing real has been done on the ground except that two committees have been formed and are discussing debates. I'm not saying that you should give up high-tech, but in macro thinking, big, broad thinking, you have to look at the whole pyramid and the most important thing in the pyramid is the strong foundation."
"The advantage of inventors is that you don't have to teach them how to invent, you have to teach them what to do with these inventions. The biggest difficulty of a traditional industry is to acquire innovation and what to do in the world of retail trade, a good product can sit on the shelf for a maximum of one to one and a half years. If a plastic injection factory sells the same 20 molds for many years, if it doesn't produce more molds and add innovation, that factory will die."
"Statistically, in relation to the population, we are among the five leading countries in the inventiveness of their residents. In any healthy economy, traditional industry is the bottom of the pyramid on which high-tech is based, but because resources are directed only to high-tech, they reduce the base of the pyramid and traditional manufacturers simply disappear from the market."

We can even compete with the Chinese
According to Schneider, with the help of the mechanization of the production lines, it is possible to compete with the huge production system established by the Chinese, but which is mainly based on cheap labor. The raw material of the plastic is a stock exchange product - like metals and oil, which means that the Israeli and the Chinese buy the raw materials at the same price. Electricity also costs the same in China and Israel because it relies on fuel, whose prices are uniform. Because a Lowtech product consists of one, two, maximum three pieces of plastic. Automation can easily beat the Chinese in international markets. One of the people who proved these things in a big way is Zvika Yamini Mazag, and Keter Plastik also proved that Israel can be a huge exporter of Lowtech and they compete very well with the Chinese. "
"I have been working for many years in China and the strong structure of the Chinese economy is due to the fact that they provide a lot of work for a lot of people, so the economy there is strong and stable, because a lot of people work and consume, not necessarily high-tech."

According to Schneider, it is impossible to require the entire population to be software engineers. It just doesn't suit everyone and thus increases the gaps in society instead of reducing them. Then a snowball starts that causes the traditional industry to close. Even if we look at it from the practical point of view, we do use high-tech products such as computers, plasma televisions, cell phones and more, but we all need endless low-tech products - pants, shoes, a chair, a pen, a page, etc. The spending in Israel on such products is several times greater than the spending on high-tech products and it is a difference of many billions in favor of the traditional industry. There are also many more low-tech companies than high-tech, although few high-tech companies have a market value of hundreds of millions of dollars, therefore in terms of market value the proportion is different. If the base of the pyramid is cut, these companies will have nothing to lean on. In Finland, for example, most of the economy of the Nokia company is based on the mass production of the product and not on the technology of the developers and programmers. They provide low-tech work at a ratio of one hundred to one compared to high-tech, because after you have designed the most sophisticated phone in the world, you want to produce 20 million units and sell them. For this you have to inject, assemble, solder, paint. If in Finland they behaved like in Israel and did not understand that the main industry is based on technology, they would establish companies that develop cell phones and bring technologies to the whole world, but then they would not have an economy at all."

"If we were to connect the inventor to the industrialist and the industrialist's product to the Israeli or international market, we would undoubtedly be one of the strongest countries in the world in terms of Lowtech innovation. At our center, for example, they invented the air conditioner for baby carriages, a product that is going to be marketed this summer all over the world - a quality product that works. Two Israeli teachers are the ones who invented the carpet with the stunt, they became millionaires. They sell their product all over the world because someone gave them the opportunity (I think it was the Shilav company that provided them with incubation for the idea). An Israeli inventor living in the USA has reached the position of vice president of the American Colgate company responsible for the part of the toothbrushes. There are many such examples."

And the problem is not always the lack of money, according to him, excess money also has bad consequences. "I met several times with the senior officials of the TMT, I even met the deputy chief scientist in one of the meetings and I proved to him that because of the wasteful conduct, that they invest hundreds of thousands of dollars in Lowtech products, they fail to achieve results. I gave as an example a product that they invested $360 in developing, a rollerball - an aid for wheelchairs invented by a man named Moshe Shaliu, and it failed. I invested ten thousand dollars and I succeeded and there is a product on the shelf. We have hundreds of such examples that show that it is possible to reach a well-known product at the right costs."

How much to invest in engineering"One of the biggest problems we have encountered in Israel is the problem of engineering and development of Luotech products, where engineering thinking instead of commercial thinking is purely engineering and then to design one product you can pay 150 thousand dollars for a product that is sold for 5 shekels to the consumer, and when you load the cost of engineering to the product You can't sell it because it's more expensive than the competition. To address this problem, the Israel Investors Center established a new company called SIE in cooperation with Ziv-Av Engineering to deal with commercial engineering. The company specializes in product design where the thinking of the engineers is commercial thinking. They know how to tell you what the cost of the product will be, how much engineering needs to be invested to reach the product, and thus you arrive at a situation where the cost of developing the product does not commercially or financially hinder its production.
I have a very strong example. A development company in Israel came to us for advice on a product, in which 300 thousand dollars were invested in its development, which in the end should cost 19 dollars to the consumer (after all, the income for the manufacturer is much smaller) and they did not reach a result. SIE engineers were able to resolve all mechanical issues for $5,000. When I look at a project, I ask where it is sold, what is the target audience and what is the price for the consumer, and then I do engineering and do not provide jet aircraft engineering solutions in a product that should be sold for $19."
"We don't raise venture capital, only working capital." Says Schneider and provides examples of this: "In another product, we invested $70, including development, until we reached the final product for sale, and not long ago, a partner entered there at a value of one million dollars and bought 5%. The jump from a value of 70 thousand dollars to a million dollars took about two years. I don't know many industries that know how to generate such profit gaps and what is most important is that at least our policy of the Israeli Center for Inventors is that we do not raise funds unless there is a product for sale. "
"These days I'm raising $350 for Netron, which developed a special chair for an adjustable computer and even massages the person who sits on it for long hours at a value of $3.5 million. I estimate that in 2008 we will sell about a thousand such chairs with a turnover of more than a million dollars, and what is beautiful here is that from the first day we can already start selling a real product. I have many such examples. And when you do the purely economic examination of how much return a person gets from his money when he invests in any other industry, you find that the lowtech industry backed by inventions is one of the most profitable industries, provided that the investors' money is not used for development and planning but for marketing and sales. In this area, international trade companies that operate in Israel and that know how to sell to global marketing chains such as Walmart, Office Depot Global and more can be at our disposal. An example of this is the Zag group of Zvika Yemini, whose international marketing activity is headed by Orli Zilberman, who succeeded in marketing products by Israeli inventors. And there is the Tzipa Carmon Export company, whose owner, Tzipa Carmon, began its activities in 1992 as a HOME DEPOT representative in Israel. And today the company is engaged in the export and marketing of many products and currently serves as the exclusive representative in Israel of the HOME DEPOT chain from the USA, the largest chain in the world in the "do it yourself" field, and other large marketing chains in Europe.

A match between inventors and industrialists, also at the local level"As part of my activities, which also include a lecture tour all over the country, I encountered the most finds in Israel, several thousand. I discovered that they are not only in the center. We seek to empower these people. "We will give them a platform and we will make sure that the traditional industry in their area of ​​residence will agree to be the manufacturer of the inventions in exchange for royalties only, and the large marketing chains will agree to put the product on the shelf for sale. I'm starting a journey of performances all over the country specifically in development areas that are more difficult there and trying to connect inventors with local manufacturers and by doing this I believe that we will strengthen the base of the pyramid and the whole issue of traditional industry and above all we will raise the horn of those inventors if they feel that they can express themselves, the benefit The State of Israel will have a petition."

"I am starting a project that in 2008 they will not be able to ignore - "INVENTED IN ISRAEL". The move will help to increase the recognition of inventors in Israel, and raise the profile of those people who, unfortunately, up until a year ago were called delusional, crazy, etc., and today the media and the people treat them with great respect. Even the inventors themselves - we have the Israeli School for Inventors and Entrepreneurs at Tel Aviv University. There we were able to teach inventors to be professionals. We taught them the method I developed - the Schneider method, how to reach the maximum maturity of the product with a minimum of money and we managed to raise a venture capital fund called MG EQUITY which teaches the entrepreneurs how to raise money from capitalists for lowtech products. This is news that has not been in Israel for many years because both venture capital funds and angels have moved away from low-tech, and I very much hope that soon banks will also realize that investments in inventions can generate much more profit than investments in high-tech, where the success rates there are very low."
"A new venture within the Israeli Center for Entrepreneurs is the establishment of a think tank of inventors, headed by Dr. Yehoshua Hess (whose occupation is psychology). In simple ways they solve very complicated problems and I think that in this we will be the first in the world in this kind of providing solutions by groups of inventors because inventors are usually single people. In addition, we have established a community that includes 10,000 inventors that we met at the center, at school and at conferences who, thanks to this connection, can create hard work with each other."
According to him, the contribution of the businessman Aviv, who actually comes from the high-tech world, to the Israeli center and the school for inventors that made all these activities possible contributed and greatly encouraged this entire market of inventors in traditional industry and I think it opened doors for a great many capital funds and private businessmen to follow his path and invest in traditional industries. "
Schneider hopes to hold in September 2008 the largest conference of inventors in the world. "The largest exhibition of inventions in the world is in Geneva once a year and 80 different inventions are presented there. "We will present at least 200 new Israeli inventions." He promises.

* The article is published at the same time today in the magazine "Indusyot"