Exploring Israel's Innovation Ecosystem
In April, the Innovation team at Skipso based in Milan, Italy, with Skipso’s Israel Outpost lead Joshua Yeres embarked on an exciting trip to Tel Aviv, Israel alongside ItalGas, where they engaged with influential figures within the Israeli innovation ecosystem. Caterina Scatozza, Innovation Consultant at Skipso, gives us a rundown of the trip and provides us with valuable insights into the dynamic and bustling innovation landscape in Israel within the energy sector.
For years now, Israel has been hailed as one of the emerging markets in the innovation space. A catalyst for Israel's innovation ecosystem is its supportive ecosystem for startups and entrepreneurship. Israel, often referred to as the "Startup Nation," stands at the forefront, hosting a vibrant ecosystem of incubators, accelerators, venture capital firms, and experienced mentors. The close-knit nature of this community promotes collaboration, networking, and knowledge-sharing, enabling entrepreneurs to thrive and turn ideas into reality.
Driving energy innovation in Israel
Israel has shown a dedicated commitment to promoting innovation in the energy sector, driven by its goal of generating 30% of electricity from renewable sources by 2030. Between 2018 and H1 2022, a remarkable $6.67 billion was invested in Israeli climate tech, demonstrating a staggering growth rate of 340% over the three-year period from 2018 to 2021. This growth rate is 2.6 times faster than the global investment growth, solidifying Israel's emergence as a global hub for climate innovation.
Joshua Yeres explains that Israel has made it an endeavour to foster innovation in the energy sector through the creation of a distinctive ecosystem that encompasses industry, utilities, and universities. This powerful synergy is often conceptualised through the "triangle of innovation," with each element playing a vital role:
- Private entrepreneurs play a pivotal role in bringing new ideas and technologies to the forefront: Israeli entrepreneurs, known for their innovative mindset, have been instrumental in fostering numerous technological advancements. With the rise of information and communications technologies, artificial intelligence, and advanced materials, the energy sector has witnessed the integration of cutting-edge solutions. These transformative technologies often originate from academia, private companies, military/defence R&D, or individual entrepreneurs.
- Utilities provide trial and implementation sites: Making it possible for entrepreneurs to work with utilities is challenging and critical. While this model has been successfully implemented in sectors such as water, defence, ecology, and life sciences, the nascent Israeli energy sector, which saw its first natural gas discoveries in December 2004, lacks a robust utility and industrial base for large-scale pilot projects. Consequently, Israeli technology developers seek strategic partnerships with non-Israeli entities to serve as pilot sites and early adopters of their innovative solutions.
- Government provides financial support: Various governmental agencies manage programs aimed at bolstering innovation at the academic, startup, and commercial levels. Examples of these agencies include the Israel Innovation Authority and the Chief Scientist of the Ministry of Energy and Water, which oversee initiatives spanning research and development to pilot stages. Additionally, partnerships with EU and US research programs have been established to further facilitate innovation endeavours.
The success of the Israeli ecosystem in adapting to constant changes has attracted numerous companies from around the world, leading them to establish outposts in Isreal. These companies recognize the significance and power of being part of the Israeli innovation ecosystem. ItalGas is among the companies that have embraced this opportunity and joined the Israeli ecosystem.
Innovation at ItalGas
ItalGas is a leader in gas distribution. Thanks to their infrastructures, they play a leading role in the energy transition towards the decarbonisation of the economy and consumption, in line with the European Union’s Green Deal targets.
In 2020 ItalGas launched “Ideas4Italgas”, an innovation program which addresses the world’s best Startups and Scaleups with a view to enhancing research and contributing to the improvement of the Group’s performance. From there, every year ItalGas engages hundreds of strategic startups for exploring new solutions aiming at testing new technologies thanks to the development of Proof of Concepts.
With the support of Skipso, starting from the 2022 edition, ItalGas introduced two new pillars:
- New research through the formula of permanent scouting: ItalGas maintains a constant "radar" actively monitoring technological and entrepreneurial novelties in areas of interest such as digitalization, analytics and data management, operation & maintenance, grid monitoring, metering, sustainability and circular economy, biomethane, hydrogen, and synthetic gases.
- Outpost in Israel: Recognizing Israel's renowned status for pioneering technologies, profitable business opportunities, and high investment returns, ItalGas has chosen Israel as one of the geographical areas for a specific and vertical scouting activity. The aim is to discover innovative and disruptive startups in Israel.
With this "non-stop scouting" approach and the establishment of an outpost in Israel, Skipso continues to support ItalGas in establishing strong connections between ItalGas and innovative and disruptive startups.
Touring Israel with ItalGas
To foster powerful relationships between ItalGas and Israeli startups, Skipso had the pleasure of travelling to Israel with ItalGas, represented by Leonardo Ambrosi, Head of Innovation and Digital Transformation at ItalGas, in April 2023. The goal was to meet, engage, and establish robust relationships with key innovation stakeholders, including the Israeli Ministry of Energy / Office of Chief Scientist, the Israeli Innovation Authority (IIA), startups, and innovation enablers such as incubators, accelerators, and venture capitalists.
The Israeli Innovation Ecosystem was delighted to collaborate with ItalGas in exploring ways to establish powerful partnerships with the leading gas distributor to drive innovation. Very productive one-on-one meetings allowed ItalGas to forge strong connections with innovation players, identify technological areas of joint interest, and set the stage for collaboration in the development of relevant innovative technologies.
ItalGas engaged with different stakeholders, addressing multiple opportunities:
- Innovation Authorities: The Israeli authorities encourage corporates to co-fund investments with strategic startups, aiming to develop a proof of concept and advance innovation in the energy sector. ItalGas explored the possibility of acting as an enabler for Israeli startups looking to scale their technology in the gas distribution market. This includes discussing several IIA grant frameworks that support the co-development of innovative solutions and execution of pilots projects between Israeli startups and non-Israel multinational corporations.
- Incubators, Accelerators, and VC: Leveraging the strong connections these actors have with startups, they can provide ItalGas with access to their global networks. They can contribute by making connections aligned with ItalGas's main areas of interest and the key issues that ItalGas aims to address.
- Startup centers: With their expertise in technology and product scouting, as well as experience in joint ventures and strategic alliances with Israeli companies, startup centers can enhance ItalGas's ability to engage with the Israeli tech ecosystem. This allows ItalGas to tap into a wide range of sustainable solutions and gain access to relevant business and government resources.
During the tour, ItalGas met with 10 strategic startups that provide innovative technologies aligned with ItalGas's main areas of interest. Through a "Match Making" approach, there was an exchange of needs between ItalGas and the solutions the startups can provide. This "Win-Win" approach enabled the exploration of potential collaboration areas and the identification of possible use cases to address.
As a result, ItalGas has already begun the co-design phase with some of the startups, aiming to explore the business model, timeline, budget, expected results, and benefits that can arise from the development of proof of concept.
Fostering productive relationships with the Israeli innovation players allowed ItalGas to find strategic ways to discover new solutions to establish partnerships and business relations aiming at scale-up new innovative technologies and solutions in line with the specific needs and interests of Italgas.
A thank you to all the amazing entities we encountered during our time in Israel, including Exodigo, Ascola Financial & Economic Consulting, the Ministry of Energy Department, the Israel Innovation Authority, Startup Nation Central, Our Crowd, the Israel Export Institute, Coreteel, Momentick, Clairion, Nano Lock, Nanoscent, Golan Plastic Product, Ezmems, Alteco, and Powercom.
Partnerships that provide real value
From the Outpost in Tel Aviv and the conducted tour, ItalGas has gained several benefits:
- Establishing relationships with key Israeli innovation players.
- Strengthening international presence within the Israeli ecosystem.
- Boosting business partnerships with Innovation authorities.
- Identifying areas of potential collaboration with Israeli authorities.
- Defining use cases for developing proof of concepts.
- Participating in Israeli Innovation programs.
- Opportunities to receive funding for joint R&D or pilot projects to test technologies.
- Opportunities to receive co-funding for proof of concepts.
- Leveraging the scouting capabilities of the Israeli ecosystem.
- Undertaking a due diligence process to validate the technological potential of startups.
- Accessing special incentives for investing in Israeli startups.
- Access to expertise and co-development of innovative technologies.
- Assistance in co-commercializing with relevant local partners.
At Skipso, we strongly believe that by forging strong connections between corporations and innovative players, we can continue to cultivate and drive meaningful innovation, making a relevant impact and facing the challenges of tomorrow. Italgas's visionary choice to establish an Outpost in Tel Aviv through a powerful ecosystem approach not only allows ItalGas to witness how startups are driving and shaping the future wave in the gas sector with their disruptive technologies but also strengthens its business relations with key innovative Israeli actors. Together, they aim to develop proof of concepts and establish effective partnerships.
Thanks to this, Skipso is delighted to continue supporting ItalGas in being at the center of the Israeli innovation radar and catering to the needs arising from constant changes. We aim to promote and advance innovation together with the most influential Israeli enablers.