Startup Culture and the Future of Israel-Japan Relations

Startup Culture and the Future of Israel-Japan Relations

Startup culture is buzzing, and business between Israel and Japan is flourishing through initiatives such as the Japan-Israel Innovation Network (JIIN).

In this episode, we are honored to welcome Her Excellency Yaffa Ben-Ari, the Israeli Ambassador to Japan. She delightfully informs us of the ongoing developments between our two nations, and the diplomatic ties that continue to inspire cooperation and international commerce.

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(Transcript below)

Tim: Hi everyone, welcome back to Mission Japan. This is where we talk about various embassies and their missions in Japan: where they started; where they’re housed right now; where they’re located; where that land came from; and what is the prognosis of their relationship with Japan going forward? Today, I have the honor of welcoming the Ambassador from, Israel Yaffa Ben-Ari. Thank you very much for joining me.

Yaffa: Thank you.

Tim: You’ve traveled so far to join us… what 600 yards?

Yaffa: Proximately, yes.

Tim: Your embassy is located in the Bancho area, Nibancho. How long has the embassy been there?

Yaffa: Well, about 50 years.

Tim: So the relationship between Japan and Israel started in 1952… but they didn’t actually have an embassy here until 10 or 15 years after that?

Yaffa: Exactly 10 years. In 1963, the presence of the mission of both countries was upgraded to a level of embassies… that was back in 63.

Tim: Okay, so Israel, as a state was established very recently to that point and then in 1952, they decided to establish some sort of a diplomatic Legation and from there, from 1952 to 1963, they actually signed diplomatic papers, they exchanged them. And it’s then when the Japanese also opened an embassy in in Tel Aviv?

Yaffa: Not exactly. Basically, official diplomatic relations started on the 15 of May in 1952. That was when the Foreign Minister of Japan acknowledged a request of Israel to open diplomatic relations. From that moment on, this is the 15 of May 1952, and that was nearly two weeks after Japan became totally independent (from American occupation). And Israel was the first Middle Eastern country to open a Mission in Tokyo.

Tim: Excellent about that.

Yaffa: And Japan had been doing the same in Israel. It was the first Asian country with whom we had a full diplomatic relation.

Tim: Why is that? What’s that foundation? Because I know that the Jews and the Japanese there’s a… It’s a weird kind of relationship that goes way back in history.

Yaffa: I don’t like the word weird. I do like the word interesting.

Tim: Oh, Okay.

Yaffa: I think we have fascinating similarities and differences, and the collaboration or the combination of the two is something that is enriching the future. But, we will talk about it later, but we can say that identifying the past, we had a past relationship between Jewish people and Japan.

Tim: Before the state was even established, right?

Yaffa: Exactly. One should say that, even in a political manner, that back in San Remo when the British Mandate was established. It was also thanks to the Japanese Foreign Minister at the time who supported a mandate allowing the Jewish people to return to their homeland, establishing a Jewish state.

Tim: Right, because there was an experiment wasn’t there? They were shipping them to Hong Kong, to Shanghai, to parts of Japan as well.

Yaffa: That came much later and as a matter of fact, we will not get into the whole history of the Jewish State or the rebirth of the Jewish State, because you do know that the Jews were dispersed all over the world for 2,000 years. I think it’s the only case in history, right, as same nation is coming back home after such a long period. I think the determination and the strong will of a nation is something that is similar between the Jews and the Japanese. So maybe the Japanese people can identify with our strong will and hope for a national determination. You know, to have our own state. But, at the same time of that support, much later, 20 years later on, we have the Second World War, where Japan joined Nazi Germany, but yet in spite of that allowing Jewish people, thanks to Sugihara, who enabled thousands of Jews to escape from Nazi Germany in from Kovno, Lithuania and finding a haven in Japan. So thousands of Jews, at the time of the Second World War, at time of the Holocaust, were saved, their lives were saved. And they found their haven in Kobe. Later on, moving from Kobe to Shanghai, under the Japanese occupation, still their life was saved. So yes, we do have a history with some positive feeling between the two nations.

Tim: Even between the Japanese-Russian War of 1902 or so (1904-5). There was a Jewish banker who gave just a tremendous amount of money, he believed in what Japan was attempting to do and because of him, not solely because of him, but because of his largesse, Japan was able to do the unthinkable.

Yaffa: True the assistant from his Bank in the United States was very helpful to Japan in order to win the war against Russia at the time, but, of course, we also had the problem of the persecution that Jewish people suffered in Russia. Hence, it was a meeting point of the interests, but definitely that was a very appreciated assistance at the time. What is this glue? I mean, it’s a very special relationship. It kind of cooled during the oil embargo because the Japanese were so thirsty for oil and they kind of made a choice and it cooled the relationship, but even in spite of that there’s an affinity that just it really escapes, you know, my ability to describe it.

Tim: Well, I’m not a psychologist, and I’m not attempting to make any analysis of the relationship from that point of view. But, I would like to say, as a diplomat, and previously I was a head of the economic division in the foreign ministry taking care of promoting Israel’s foreign economic relations, that today diplomacy is basically openly relying on many sectors of getting close to one another. It’s not only, you know, empathy; it’s not only military or defense issues as in the past glorious time of, you know, 200 years ago- it was all made on an agreement to fight to get to similar wars etc… Today, it’s much more cultural, maybe psychological, as you suggest, but also a lot of economic interests. You have to combine the whole basket: it’s a basket full of goodies and, definitely, interests-wise there are many interests involved. You couldn’t see if you are looking on the 66 years of relation between Japan and Israel, you will see the ups and downs of the relationship as a kind of a regression line of decision making process out of the economic interest sector. Definitely, the first 20 years were good: they developed slowly, you know, but according to the times, but the two economies did marvels. Maybe, the Japanese economy did much better than Israel at the time in the 50s and 60s but, also for us it was a u-turn development and that made Israel suddenly getting assistant for all the problems of absorption of new immigrants and all the, you know, other security challenges that we had to face with the different attacks. So, definitely we had many challenges but yet we developed our economy to a level of an export from an input oriented to an export-oriented economy and also from socialist-kind of economic philosophy into capitalism and into privatization, and our industry started to flourish. But yet, it’s a small country with no natural resources, until recently… we are facing new developments. But our main resource are the human beings: human power. Definitely, there is another thing that we are partnering with Japan, because Japan as big as it is, even though it’s smaller in light of the neighborhood, but it’s a big country that has as a main resources the human being, the people, the people power. Thus, basically, we are sharing similar values of investing in education, in engineering, in technology, neurology, in science and not for nothing, you can see that, for Japan, it’s the number one in Asia for its Nobel Prize laureates, 25 of them. Israel is only 12. But if you compare it to the number of population, the ratio is much higher in Israel. But the idea is that we have similar, you know, values of developing our knowledge , our technology, our science, so we are very fitting: we’re not competing, we are complementing each other. Especially in our economy, because Japan soon after the war, within 20 years or so, turned into the number two economy of the world. Israel took about 40 years to develop the miracle of its position as a very strong economy. Of course, very far from from Japan, very far behind of Japan.

Tim: Somewhat restricted, because of being surrounded by enemies and the need to develop armaments and to hoist an army, while you’re trying to create an economy, as well.

Yaffa: Yes, but I think, despite all that, the emphasis that brought us is, I was starting to show, the graph of the relationship of the ups and downs. So, the first 10 years were climbing up normally, then the mission became an embassy in both countries. There were exchange of, you know, visits etc. But there were no agreements, and then, after 67 and especially 73, with the Arab boycott ,actually the oil crisis, that caused Japan still to keep the relation, not to sever them, as some other countries did. But yet, in that sense, in the next 20 years from 1973, I would say, until 1992, the relations were kept but much emptier in the sense of real trade, or real investment, or really any economic development. I must admit that in the 80s, I had a Japanese car Subaru, but that was the only car sold in Israel. It was Fuji company that doing, I mean, the only one that did business in Israel. In the 90s, I think in 93 or 92, there was a totally different picture. Toyota came in and then today, I would say that the majority of the cars in Israel are Japanese. So, it’s again another change. So, if I’m coming to calculate the first 20 years were a development, kind of a normal development, the 20 years after we’re really crushing down because of economic reasons, and then whole idea of our boycott, you know, was suddenly empty, because both Egypt had already a peaceful relation with Israel from 1979, 40 years ago, but yet after the fall of the Berlin wall, and suddenly after many countries like China, have created relations with Israel and the pace in which China developed its relation with Israel was much faster. I think Japan at that time realized that they had something to lose and the development of the relations, from the economic point of view, started. Agreements started in the 90s. There was just beginning of the positive development and from a trade of about a hundred, a few hundreds of dollars, of million of dollars of a relationship when the 70 percent of Israeli exports to Japan was diamonds. And the input from Israel of diamonds was about 29% of Japan imports at that time. Soon in 93, it went up to 2 billion, of total volume of trade, that shows you the exact jump. Today, you can see, 20 years later, a different shift, but it’s an even more positive shift and on that, maybe, we can specifically talk about it.

Tim: Well, I know that it’s just a prelude because what’s going on in Israel right now and the age of the, it’s not the Intelligencia, it’s just basically the population’s high level of education and the Israelis are the people of the books, so they’ve been learning: their culture is learning. And this explosion that we can expect because of so many startups that are there, the ideas that are coming out in cryptology, and all of these just wonderful things that, gosh, only the Israelis can do there are so many little pockets of technology that they really dominate in.

Yaffa: Basically, Israel today is in a very leadership position, especially on innovation, and I would like to say, you know with modesty, there is not a “sector F field”, an issue that Israel doesn’t have expertise in innovation. It’s actually from the land to the space. It’s for agriculture that we conceived it as a very developed science in Israel, and it’s not just happening recently, innovating in agriculture started in the 50s. Energy issues, actually, solar energy was developed in the 50s; water management was developed in the 60s. Israel innovative processes have started from a long time, even before the state was born, but actually was regenerated immediately after the statehood because the challenges were calling for more attention to it, in the mind of the people. But in the 90s, government stepped in even more deeper in encouraging the ecosystem of innovation, creating incubators, 24 competitors around the country. So, we have developed a very interesting ecosystem that many like to understand and to copy, but after, through the process of privatizations, through the process, of you know, economic growth that occurred in the 90s in Israel, we came to a point where today we have become a center of interest of very many issues of innovation, especially in cybersecurity, the Internet (of things it is the main issue). So, everything is connected and everything can be “terrorized”. So, cybersecurity is a very important issue for infrastructure or for the autonomous cars or for whatever issue, and also for the issue of medical care, the life sciences. Collaborating between the scientific, the academic levels, and finding the right development. Israel, being a strong economy, has also been attracted, being very attractive to foreign investment today, we have 350 global companies. Google, Facebook, you name it.

Tim: Everybody is there.

Yaffa: Out of these 350 centers of global corporates, there are 220 Americans. Very many Europeans, and now growing numbers of Chinese, Korean, and Japanese. A growing number of investment to the point that in 2013, the Japanese investment in Israel at the time was about 20 million US dollars. Today, four years later, five years later, we are calculating over Six Billion U.S. Dollars. This is more than hundred and twenty times. So, definitely it’s a growing interest and about 70 Japanese companies are already opening office or making some investment of thought. Almost all the trading companies, Japanese major trading companies, have opened an office and some kind of investment in Israel. 11 of Japanese companies have already established R&D centers. So, we are looking at at a growing, a very intensively growing Japanese involvement in the Israeli economy. The basic notion of it is that the collaboration between great minds together can create a much bigger impact, not only on the two economies, something that both both countries will enjoy, but also in third countries, right?

Tim: Right. You have a particularly good friend in Shinzo Abe, the Prime Minister of Japan. What’s the foundation of that? He will soon be the longest-serving Prime Minister in Japanese history, so this is really important that you have such a tight relationship with him. What what’s the underpinning of that, do you know?

Yaffa: I think that it has a lot to do with the way Prime Minister Abe is looking at the economy and the fact that he identified the values of doing a stronger relation, having a stronger relation with Israel, for the Japanese economy, the Abenomics something that you’re familiar with, I think the fact that both Prime Minister’s visited each other and there is kind of a chemistry between them.

Tim: Relationship spring, right?

Yaffa: Basically, it was the second visit. The first time he visited Israel was in May 2015 and in January 2015. Prior to that, Prime Minister Netanyahu visited Japan in May 2014. But I must admit that, even before that, an interesting fact, is that the Keidanren sent in February 2014 an initial big delegation that came to Israel, you know, starting and seeing what we can do together. So, the matchmaking process

Tim: JETRO was there as well.

Yaffa: Exactly, from 1997. To conclude I would say that the government-to-government, the g2g relation became a catalyst. There’s something that really boosted the economic interest and the already starting to grow interest in the economic field with the business community, so they got a jump start to the process through the visits. Now in this May (2018) Prime Minister Shinzo Abe visited again and again to promote its another push to promote. There was JIIN that was established, which is the Japan-Israel innovation network, which is the collaboration of both government and non-government economic organizations to boost the matching of the two economies on the issue of innovation and, I think, it’s an exciting exciting collaboration.

Tim: Tell me about, if we can go back a little bit more, to the embassy and the presence of Israel in Japan. The chamber of commerce how vibrant is that? You know, it strikes me that there are so few Israelis who live in Tokyo or live in Japan?

Yaffa: I think it’s an interesting question, but I would like to say that the proximity is a problem.

Tim: Yes, far away.

Yaffa: We are far away from each other. We have many similarities, but geographically we’re far apart. Unfortunately, in spite of the agreement that we have on transportation of mutual landing rights in both countries. It was never materialized, so when I wanted to land it was not permitted; when they were permitted you know, it didn’t come into fruition and now I’ve been knocking on doors in, you know, among Japanese airlines and finally, I hope, it’s a question of when when a direct line will be established.

Tim: So, a direct flight you think would really change that?

Yaffa: Absolutely it’s a game-changer, because business people, actually, they want to save time and it takes too long through a transit, you know, to flight to go from one location to another ,you come to do business in two days: you’re wasting four days on the road. That’s too much of investment. So basically, it will be a direct line, whenever. It will really boost the relations and the economic relations between the two countries.

Tim: A lot of people have the same complaint about their countries.

Yaffa: True, because it becomes an issue of an egg and, you know, a chicken. What comes first… And the airlines say well, there’s not a demand. We already last year surpassed fifty thousand in volume of you know Japanese and Israelis, they’re going into each other’s country. Definitely, Israel is coming to visit Japan much more than Japanese come to Israel. But, we do expect that this year 2018 will show much higher numbers, so we will surpass the sixty thousand.

Tim: Okay, so the numbers on tourism the more Israelis that visit Japan than Japanese that visit…

Yaffa: Twenty five times bigger in relation to the population because after twenty one hundred and twenty six million Japanese, only eighteen thousand visited Israel in 2017. Where Israel has less than nine million people, and we’ve been visiting Japan thirty three thousand people in 2017. So the numbers and now it’s a buzz. Very many Israelis are being fascinated by Japan, for years. Even in schools, in academia, many people speak, you know even learn Japanese from the anime on TV. We’ve been exposed, a generation of our children were exposed to Japanese language through anime. So the Pokemon. Even through the martial arts. In Israel, in Tel Aviv, I think it’s the biggest number of sushi restaurants outside of Tokyo. So the Japan culture and the Japan beauty is something which has been really attractive for Israelis, but it was too expensive. Nowadays, it became more feasible. So many more Israelis are coming from whatever, you know, left and right. We hope that the coming season next year it will have, we will have, at least some charter flights. Hopefully, we will see much bigger numbers.

Tim: Well, hopefully this video will help us. The Israeli mission in Japan, it’s been here since 1952. The prospects for flourishing in the future are really apparent. Please stay tuned. Thank you very much for joining us.

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