Israel is a very small country, measuring 470 kilometres long, and 135 kilometres at its widest point. But it has a well-developed network of roads and railroads, as well as modern ports and airports. Infrastructure development failed to keep pace with rapid population growth, boosted by the arrival of some one million immigrants over the last decade, and by a surge in economic growth and rising affluence.
Beginning in the 1990s, Israel’s government and industrial organisations have placed a much greater priority on investment in transport. The government has been actively upgrading the transportation sector across the board to introduce greater competition and to encourage private enterprise. A study released in July 2016 found that of all OECD countries Israel has the greatest average traffic density per kilometre.
In the early 1960s, rapid economic growth and the end to restrictions on importing private automobiles placed a serious burden on the road network. But with especially heavy defence expenditures and the slowing of economic growth during the 1970s and 1980s, transportation infrastructure development was often neglected. Israel’s transportation network by the late 1980s was in no position to accommodate the tidal wave of immigration from the former Soviet Union – which increased the population by 20 per cent over the next decade.
Israel’s road network extends more than 19,758 kilometres, including urban, access and non-urban roads. Modern highways radiate out of the major urban centres. But road infrastructure lags far behind the growth in the number of cars. There are now more than 1.8 million motor vehicles on the roads (more than one car for every four people), with a net increase of some 120,000 cars every year. As a result, an average of 105 cars crowd every kilometre of Israel’s roads, compared to some 40 cars per kilometre in the US.
To help alleviate the congestion, funding for inter-urban road projects has increased substantially since 1992, with the national Ministry of Transport’s Public Works Department annual budget exceeding $450 million in 1999 and 2000. Israel’s biggest-ever highway project, the Trans-Israel Highway, extends 300 kilometres from the northern border to the Negev. At a cost of $2.0 billion USD, it forms the eastern backbone of the country’s transportation network, thereby reducing congestion and air pollution in the centre of the country. The first phase of the highway – a 90-kilometre toll road running parallel to the greater Tel Aviv metropolitan area – was constructed by an Israeli-Canadian consortium, which was organised using the ‘build-operate-transfer’ (BOT) method. In this situation the national government appointed a private company to build and operate a project for a period of time, after which it transfers the assets back to the government. The toll road cost around $750 million to build. The second phase expanded the highway by 48 kilometres north and south of phase one.
The Carmel Tunnel is another major BOT project – a 16-kilometre underground road below Haifa’s city centre, linking the northern and southern side of the city. Like the Trans-Israel Highway, the Carmel Tunnel is aimed at alleviating congestion in the city centre. The tender was won by a Spanish-Israeli consortium. Construction was been delayed due to difficulties in attaining necessary statutory building permits for the project. It now operates as planned.
Perhaps the most important Israeli contribution to the global transport industry emanates from Israel’s dynamic ecosystem of mobility tech innovators. In recent years, Israel has developed into a mobility innovation powerhouse. The number of mobility-related start-ups has sharply increased. Investor appetite has reached unprecedented heights. Global automotive manufacturers are steadily increasing their involvement and government support continues to grow. Not even the Covid pandemic could halt the growth trajectory of the Israeli mobility ecosystem and the future remains promising.
Israel is home to one of the world’s largest technology hubs. It has lately seen enormous growth, particularly in the transport, logistics, mobility sector. Since 2016, mobility start-ups have grown by 50 per cent, from 400 then to over 800 in 2022. Israeli start-ups are highly sought after by global corporations for strategic alliances and acquisitions.
The global transport industry is being disrupted by the new Mobility, Autonomous Driving, Digitalisation, and Electrification (MADE) revolution. Israeli start-ups are seizing the opportunity to develop novel solutions for the future of mobility. In fact, approximately 85 per cent of all mobility start-ups in Israel can be allocated to one of the MADE trends.
Start-ups addressing the trend of new mobility provide innovative mobility solutions for passengers and goods, most notably in the area of shared mobility and micro-mobility, as well as in fleet management solutions. For example, in May 2020, Moovit, an Israeli-based leader in Mobility-as-a-Service, was sold to Intel for 1.0 billion USD.
Autonomous driving-related start-ups have shown the strongest growth among the four categories. Since 2016, the number of start-ups in the autonomous space grew by 26 per cent annually, driven by a steep rise in Advanced Driver Assistance Systems (ADAS) and passenger safety solutions – a trend that is in line with the rising adoption of autonomous technologies in mass-produced vehicles. In 2017, Mobileye, a leader in ADAS camera systems, became the largest exit in the history of Israel’s tech industry, after selling to Intel for 15 billion USD.
Digitalisation-related start-ups make up the largest share of mobility start-ups. These firms offer vehicle connectivity solutions (for example, cloud, internet resources, infrastructure) and cybersecurity-related solutions. Since 2016, cybersecurity solutions alone grew five-fold, underlining the importance of secure connections as a prerequisite for increasingly autonomous vehicles.
Start-ups focusing on the development of electro mobility (such as EVs, batteries, charging facilities, electric motors) experienced moderate growth in recent years. Israel boasts favourable conditions to encourage the growth of star-tups, with multiple government entities taking supporting roles, with respect to R&D support, infrastructure development, early-stage funding, marketing, and networking events. In total, Israel’s national government has invested and distributed at least $165 million USD into the mobility sector over the past five years. The list of participating entities is a long one, and would include these key entities:
The Smart Mobility Initiative (Fuel Choices), under the Prime Minister’s Office, is concerned with the development of testing and piloting infrastructure; mobility research collaborations with academia; open source high-resolution mapping of Israeli geography; projects improving Israel’s transport sector; and funding of the mobility-related activities of the Israel Export Institute.
The Israeli Innovation Authority (IIA) promotes R&D collaboration between Israel and the international community. IIA supports hundreds of projects annually, ranging from pre-seed funding and incubator work to support for more established start-up companies and industrial R&D enterprises.
EcoMotion, a joint venture of public and private entities and Israel’s broader mobility start-ups network, facilitates and fosters exchange between start-ups, investors, OEMs and suppliers, and academia. It convenes projects which enable knowledge-sharing, networking, and collaboration.
In collaboration with the Israeli start-up community, such entities are expanding their support programs to address the most pressing topics for startups, for example by conducting ‘demonstration days’ for OEMs and suppliers and hosting global mobility events. Additionally, government stakeholders look to develop additional testing facilities, draft regulation for new technology, and support the next generation of emerging start-ups.
For most start-ups, Israel is too small a market to compete in effectively. Unlike other global start-up hubs, Israel is not located in a large and reasonably homogenous market such as North America or China. The success of Israeli start-ups is dependent on early entry into a foreign market, where challenges around limited personal connections and cultural differences prevail.
For startups, a collaboration with OEMs and OESs through their local subsidiaries represents a possible solution to this challenge. Moreover, entities such as Fuel Choices or EcoMotion are increasing their efforts to promote Israeli startups by organising global events such as the EcoMotion Week and the Smart Mobility Summit.
The story of one company is worth noting here: Back in 2016, an Israeli-based startup called ElectRoad installed the country’s first strip of electric road in Northern Tel Aviv. This represented an innovation which powers and charges electric vehicles as they drive over it. Special grooves are carved into the asphalt, which are then filled with a copper wire that is connected to a power converter at the roadside. Electric cars that are equipped with the company’s technology receive electricity while driving over the road, which not only powers the car but charges the battery inside. ElectRoad is the first technology that can charge electric car batteries and power the vehicle, all in real time.
EVs is not the only domain which new companies are making inroads with news solutions into old-line businesses. Another company’s story is relevant here: Getruck is an Israeli-based start-up, funded by venture capital firms, and other investors. It is pioneering a unique approach to moving goods, one which uses advanced data tools of the kind that were pioneered by the Israeli Defense Forces.
Getruck’s VP Strategy & Operations, Gadi Umansky, considers the Israeli supply chain ecosystem to be “complex”. He thinks that the sector’s core weakness is that it’s “full of dependencies with many uncoordinated players. The result is inefficiency, inability to plan, and a situation where all the players in the chain lose.”
To make his point, Umansky cites some jarring statistics:
At any given moment, 28 per cent of all trucks are traveling empty.
For only 40 per cent of the time are trucks in motion. The rest of the time is wasted while waiting.
29 per cent of greenhouse gas emissions are generated by the transportation sector.
The Israeli freight market is weakened by the fact that it is so very fragmented, with dozens of traditional freight-forwarding companies. Even though Israel is called the ‘Start-Up Nation’, Umansky says that their freight industry really hasn’t gone through any digital transformation processes – at least so far. Surprisingly, even though Israel is a small country, it has a comparatively larger road freight market of about $12 billion. This is what makes companies like Getruck so focused on solving the puzzles.
In response to this sector’s glaring inefficiencies and disorganisation, Getruck has developed a planning and dispatching product based on several advanced technologies: cutting-edge algorithms and AI for route optimisation, smart planning, real-time re-planning, and data enrichment. From the outset, the company’s core aim has been to create a suite of solutions which allow customers to have full visibility and to achieve data-driven decision-making.
The product connects to the various organisational systems (ERP, TMS, WMS) in way which enable smart planning. This makes possible a kind of data-based decision-making which maximises every truck’s efficiency and saves precious time, money, and emissions. The company’s product includes several interfaces (distribution manager, warehouse manager, forklift operator, and driver’s app) – each of which are designed to provide a 360-dgree solution — from planning, to dispatch, and to POD.
Getruck is considered to the first and largest ‘Digital Freight Broker’ in Israel. Their business focus is the first miles, and the middle miles, of the road freight industry. Getruck does not have any trucks in its possession. But they do have about 10,000 trucks connected to their system, which accounts for about 10 per cent of the heavy trucks in use in Israel.
Mobility is not the only focus of Israeli tech attention. According to Israel’s Ministry of Trade, “the logistics and supply chain sector is expected to grow to a value of $37 billion USD in 2027 as consumer demands continue to rise”. The government is focused on nurturing a network of dynamic tech start-ups that focus on this sector. Israel has over 150 companies engaged in various aspects of the sector that use technology and innovation to ensure that goods are delivered quickly and efficiently.
According to Dr Ron Malka Director General of the national Ministry of Economy and Industry, “while Israel doesn’t have a native auto manufacturing, it does excel in the automobile smart technology sector. With more than 1,400 new startups per year, 300+ multinational companies, thousands of entrepreneurs and a comprehensive business ecosystem, global auto manufacturers and tech giants are looking at Israel while creating the next generation of smart vehicle.”
Michal Frank, Director General of the national Ministry of Transport and Road Safety, with “robotaxis just around the corner and drone deliveries in sight, digital ticketing, dynamic routing and electric public transportation at the palm of our hands”. She says that “Israel is a world leader in the field of smart mobility”. To prove this statement to skeptics, she points to hundreds of active Israeli start-ups in the field, 35 international R&D and innovation centers, leading academic research institutions, and more than $25 billion raised by Israeli smart mobility companies over the past decade, more than 10 per cent of smart mobility investments worldwide.” It is therefore her Ministry’s priority to continue to implement new technological solutions wherever possible, and support the ecosystem with adaptive regulation and tools. She lists these: “cutting-edge legislation, enabling driverless autonomous vehicles on the roads in Israel in 2022; a ‘call for proposals’ regarding the integration of autonomous buses in the public transport service; test sites for cybersecurity and autonomous and connected vehicles; access to open source data and HD mapping; pilot programs for smart mobility; the national drone initiative.”
Necessity and innovation combine in Israel to drive a smart mobility revolution featuring advanced technologies and new business models. Lessons can be learned based on practical experience. We look at the context then follow the journey of an innovative Israeli start-up focusing on revolutionising traffic management.
A smart mobility revolution is underway. While the term ‘revolution’ can often have negative connotations, our perception is that the smart mobility revolution is extremely positive. It will result in safer, cheaper, and more enjoyable travel. Our definition for the revolution is “sudden, radical change.” Sudden is a relative term depending on your perspective. If you participate in planning and delivering roads, then the life cycle you have in mind can be 30 to 50 years. If you conduct product planning and design for smart phones, then the life cycle you have in mind could be as short as 12 to 18 months. In either case, the terms “sudden” and “radical” have different meanings that are relative to the overall life cycle.
Whatever your perspective, the use of advanced technologies is emerging as a significant force in transportation and mobility. We expect sudden and radical changes to occur as deployment cycles get shorter and the gap between invention and commercialisation gets narrower. The foundation for this revolution has been set by previous programs relating to intelligent transportation systems and intelligent vehicle highway systems. Our belief is that to get the best from the smart mobility revolution it is necessary to re-evaluate current use of technology, assess the benefit of emerging technology and reconsider best practices.
A new level of awareness and a higher degree of agility will be required to adapt to the smart mobility revolution, It is already happening so, we must follow suit with transformative enabling condition settings. Examples include a switch from public sector funding to private sector funding for smart mobility applications. This is changing the nature of business models and the relationships between the public and private sectors. Another example is the application of sensor technologies, telecommunications, and smart devices in supporting mobility as a service. This involves delivery of decision-quality information to travellers regarding modal choice, reliability, and cost of service, as a way of improving the quality of decision-making. Some of the most radical changes are in the automated and connected vehicles where implementation is already at hand. We expect that freight and logistics will be at the forefront of this introduction.
Driver, vehicle, and infrastructure are considered as a single system, while the entire transportation system is considered as a single entity. The role of the driver and the traveller will be pivotal in responding to new choices, and a higher level of awareness regarding choices.
Connected vehicles also interact with the driver and collect data from the multiple systems on-board the vehicle. These technologies will revolutionise data acquisition for traffic operations and planning. The Internet of Things is also playing a significant role with new abilities to collect and process data using smart sensors, resulting in better use of telecommunications bandwidth. Beyond connecting people, this technology will connect a wide range of devices including automated and connected vehicles, enabling traffic control to go beyond flow dynamics management to discrete vehicle management.
Smart mobility offers to deliver valuable services across entire transportation networks. To harness the power of smart mobility, it is important that we learn lessons learned from prior implementations. A reference source highlighting what has gone right or wrong offering guidance for the future, is particularly valuable.
Smart mobility has an important role to play in the application of advanced technologies that will improve the lives of citizens and visitors in urban areas. There is also a tipping point at which the focus shifts from making the technology work, to devising appropriate strategies to extract value from the technology. The industry is at that tipping point, making it essential to communicate appropriate strategies to the practitioner community.
There is also the wider context of rapid technology change. This is likely to have socio-economic impact. Marketing professionals are already talking about adopting a market segment of one, in which big data and advanced analytics makes it possible to deliver mass customisation.
The revolution is fuelled by a convergence between the growing need to solve urban transportation problems and the emergence of new technologies and radical business models. One of the best ways to get up to speed quickly on the changes are underway is to take a close look at a country which is ahead of the field. We believe that Israel is a suitable case for treatment.
Israel has high population density. Travel demand means that the larger cities are approaching a crisis caused by a mismatch between mobility supply and demand. The Israeli government has been proactive, taking a comprehensive and structured approach to the problem. Advanced technologies have been applied for better traffic management and multi-modal coordination.
Measures to manage the demand for transportation include innovative modal shift techniques and consideration of congestion pricing strategies. For demand management, the Israeli government recently formalised the Million Trip Plan – a program of measures designed to shift one million trips from private car to other modes. On the supply side, the application of technology has been both dramatic and impressive. Technology-related start-up companies have been incubated to provide solutions for next-generation transportation supply management.