Israel lags behind the USA and Western Europe in the transition to the new economy based on digital transformation and applications

According to analyst Dr. Jimmy Schwartzkoff, CEO of the STKI research company, in the long run this neglect will harm the competitiveness of Israeli companies

"Israel lags behind the United States and Western European countries in regards to the transition to the new economy based on digital transformation and applications, which in the long run may harm the competitiveness of Israeli companies in the world market" says Jimmy Schwarzkopf, CEO of the STKI research company. "While many companies in the US and Western Europe invest efforts in adapting their economic models and management methodologies to the digital economy and the application economy, most managers in Israel are not aware of the digital revolution and do not adapt their organizations to the new principles."

"We are at the beginning of a new world where the rules of competition are determined by the ability of companies to build themselves around software systems, which not only support the business activity but also create it and the revenue for the business" says Schwarzkopf. "The problem is that abroad the transition to this new economy is in full swing and in Israel they haven't even invented words in the Hebrew language for basic terms such as digital disruption which is the change the business is going through due to the digital revolution and agility - the agility and flexibility that characterize the fields of activity of modern businesses."

"There are also in Israel buds of companies operating according to the principles of the application economy and digital transformation, but most of them are startup companies such as GetTaxi, as well as 'islands' of digital transformation in financial institutions. However, most of the largest and oldest companies in Israel are still clinging to the old economy," notes Schwarzkopf. "I would suggest that these companies adopt in the meantime, for a few years, a hybrid approach in which the old and new methodologies will work side by side, and thus the transition to the new economy will be smooth and without problems."

In order to adapt to the principles of the application economy and the digital economy, companies are adopting cloud technologies and application programming interfaces (API) strategies to communicate with all employees, suppliers and customers. Also, more and more companies abroad are adopting Blockchain technology, which enables business activity and transaction verification without the need for a central management entity. In addition, many companies adopt Chatbots - virtual robots for chat conversations between the customers and the company, as well as software based on open source, plus cognitive and algorithmic technologies. "We see more and more software development tools for mobile devices, implemented by companies and organizations, as well as software "containers" implemented in companies and organizations," says Schwarzkopf.

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