Israel number one in COVID-19 Health Safety ranking? What is so special about the Startup nation handling of Coronavirus?

April 5, 2020

 

How does the startup nation manage the war against coronavirus? What are the differentiated measures, and what impact does it have on its economy and innovation ecosystem? Has the current political crisis weakened its governance?

 

Source: Deep Knowledge Group, April 4th

The pandemic comes amid the absence of an official government, as no ruling coalition has been formed following the 2020 Israeli legislative election, the third since the dissolution of the government in December 2018, putting increased pressure on public trust, consensus, democracy and governance.

On March 26, the previous IDF’s Chief of the General Staff Benny Gantz, the main opponent to Netanyahu accepted to enter into a united emergency government, hence restoring work of the parliament and a comfortable majority for dealing with new legislations.  

This announcement should reassure the business and investment community in the capacity of Israel to cope with the crisis and take the necessary sanitary and socio-economic measures. On March 29, the labor party announces its willingness to join the majority.

 

These evolutions lead to free the governmental Corona package: increased from 8 Billion Shekels (€2B) to 80 Billion Shekels (EUR20B) within a few days - that is, 6% of GNP. Half of it will go to the business sector, a quarter to safety nets and social relief and 11 Billion to healthcare and sanitary measures. A reserve of 7 Billion is put aside to prevent bankruptcies and to invest massively in the health, infrastructure and building sectors. (Announcements from March 30)

 

On the 30th of March, the Prime Minister, over 70 years old, is placed in 2 days preventive quarantine following the diagnosis of one of his advisers. On the 31st of March, it is the turn of the IDF Chief of the General Staff. And on April 1st, coming as a bad joke, the 71 years old Health Minister is found positive to Coronavirus. The list of his 14 days meetings only started to circulate.

 

Coronavirus Chronology

 

The first case of coronavirus in Israel was confirmed on 21 February 2020: a female citizen tested positive for the virus after return from quarantine on the Diamond Princess ship in Japan.

As a result, a 14-day home isolation rule is instituted for anyone who visited South Korea or Japan, and a ban is placed on non-residents and non-citizens who visit South Korea in the 14 days before arrival.

 

On the 2nd of March: for the legislative elections, confined voters vote in secured offices.


On March 11, Israel limited gatherings to 100 people.

 
On March 15, gatherings were limited to 10 people, with attendees advised to keep a distance of 2 meters between one another.


On March 19, Prime Minister Benjamin Netanyahu declared a national state of emergency, saying that existing restrictions would henceforth be legally enforceable, and violators would be fined and imposing particularly high fines of 6,000 ILS on offenders (companies and individuals) or even up to 6 months in prison for repeating offenders. Israelis were not allowed to leave their homes unless absolutely necessary. Essential services would remain open.

On the 20th of March, an 88-year-old Holocaust survivor in Jerusalem was announced as the country's first casualty.


Coercive measures are updated almost on a daily basis. Activity is reduced to essential shops and workers, which forms a total of 30% of the active population. As of the 31st of March, this is reduced to 15%. The population is limited to 100 meters from home, one exit a day, under digital and police surveillance. All stores, except for drugstores and supermarkets, are shut down and delivery services will be restricted to food and medicine. In addition, public transportation will be suspended, and only family members residing in the same household would be allowed to drive in the same car.

 

From March 30, only up to two household members’ "gatherings" are allowed in public space.

 

Epidemiology

 

Between February 20 and April 2, Corona rose in Israel from 1 to 6857 cases, 107 of which are serious, maintaining to date a rather low death rate (4 per 1 million). Source: Worldometers

 

Below the curves of 5 countries (April 2). For the sake of comparability, the data are represented from the day on which the 100th patient was registered and measures the progression of the virus and its morbidity. (We have chosen not to include the United States, which has a very worrying curve.)

 

 

 

Differentiated Measures taken by the Authorities

 

Over two weeks, from February 17 to March 4, as number of cases was still inferior to 20, Israel was very fast at imposing a travel ban and isolating foreign and national travelers, starting with Asia then extending to Europe and the US. Since March 4, tourists coming from France, who cannot prove citizenship or residence are not allowed to enter the territory.

By closing its borders, Israel has reacted faster than any other country, in order to prevent an Italian scenario. Israel knows too well that it cannot count on its overcrowded health and hospital system to cope with a rapid spread of the disease. The number of hospital beds per 1000 habitants is 2.2, compared to a 3.6 average from the OECD, and 4.1 in Europe.[1]

 

As soon as March 20th, a “Check and travel,” testing facility began operating in Tel Aviv, with a capacity of carrying out 1,500 tests per day. On March 23, the Health Ministry announced that it had conducted 3,208 tests in one day. Additional drive-through coronavirus testing facilities opened in major cities Haifa, Jerusalem, and Beersheba, as the government seeks to dramatically increase the number of tests it conducts on a daily basis, switching to a more systematic strategy.[2] Lockdown was adopted faster than elsewhere but was not coupled with systematic testing like in South Korea and Singapore. Testing are increasing gradually, surpassing 6000 a day on April 2.

 

To free space in hospitals, the government has sub-contracted a private chain of 4**** hotels hosting patients in mild condition. Empty schools may also be requested for additional space.

 

On March 26, Israel allows compassionate use of unapproved medication to treat Coronavirus, such as Chloroquine for patients in moderate condition, and US Gilead Remdesivir for more serious cases.[3]

 

Individual freedom restrictions

 

Controversy over basic privacy rights: On March 19, Israel’s Supreme Court initially ruled against and on March 24 in favor of emergency regulations letting the police and Shin Bet (interior intelligence services) obtain information on coronavirus patients without a warrant, with a goal to localize, trace 14-day retroactive, and control quarantine.

In the meantime, similar to TraceTogether - the Singaporean app[4], the Israeli Ministry of Health partners with Israeli GlobeKeeper for an application called “Hamagen”, which was put in the air on March 23 on a voluntary basis for civilian monitoring, letting the user know if he has come in contact with a coronavirus patient.[5]

Although, the same kind of digital monitoring is adopted now by much more privacy protective countries, controversy is not yet abolished in Israel, for example when it appeared that last dialed numbers are used to locate the people you’ve been in touch with.

 

COVID-19 has insinuated itself into the flaws of Israeli society. As in other places, the government is struggling now with the "lost territories of the republic". In particular, the government and its Minister of Health from the ultra-Orthodox minority lacked firmness in the face of this audience - 11% of the population - which records now the highest rates of contamination and is put under lockdown. No data yet available about the Arab minority.

 

Mobilization of the Army and the Mossad

 

As opposed to most Western countries, the Army service is still mandatory, in Israel.

An estimated 7.3% of the total population is part of the IDF active and reserve personnel, with a 20B USD defense budget.[6]

 

In contradiction with national crisis management planning recommendations, the army has remained relatively withdrawn from the management of the crisis, letting the under-staffed Ministry of Health to centralize the action of the government, but placed under the direct control of the Prime Minister.

 

While keeping with readiness and deterrence constraints, Tsahal volunteered to allocate soldiers and resources to the national effort. Soldiers will act as auxiliary force to the Israel Police, which has legal authority to enforce the lockdown, as well as to health and social workers in the field. A control room is being established in one of the Airforce basis.

 

Earlier this week, Police Acting Insp.-Gen. Moti Cohen revealed some details of the plan. It would involve dividing the country into quadrants, each headed by a captain and team of police officers and soldiers, who would monitor borders and movement and enforce the lockdown. Hundreds of police officers would be deployed to villages, towns and cities and be stationed alongside soldiers, he said.[7]

 

The head of the Israeli Home Front Command announced that the military is set to open two “Corona Hotels,” group recuperation facilities for non-severe coronavirus cases in addition to three existing civil “Corona Hotels”.


The Military R&D (MAFAT) established an Inter-institutional and Multidisciplinary National Emergency Team for the development of technologies to combat the virus combining civil and military to develop respiratory ventilators amongst other priorities. According to the Director Dr. Gold, “the brightest minds in the country, from all the various sectors, are committed and working around the clock in order to identify and develop the technological solutions that will contribute to the national effort to cope with the corona pandemic. We hope to share good news with the State of Israel, as soon as possible.” The team is using both civilian and military technology, including big data, AI, command and control systems, various sensors and mobile technology.[8]

 

The Military Intelligence Unit 81, in collaboration with the Ministry of Health, has started working on the adaptation of the BiPAP electronic home ventilator device for use with Coronavirus patients and manufacturing protection masks for the medical staff and to prepare ambulances for Corona patients transportation without risking the driver.[9]

To cut short the administrative and budget constraints of the Ministry of Health, the Defense Minister has committed himself early in March to buy 2500 ventilators, localized with the help of volunteers, leaders of the high-tech community, who activated their global networks. (no update available, might have been hijacked by more agile buyers)

 

Mossad has established an emergency room for purchasing medical supplies. Who better than the Mossad to fight in this wild market? Only time will tell its degree of efficiency, if ever. Some failures and dysfunctions made their way to the media, such as ordering 100,000 incomplete test - for which Jerusalem based Nova Med is manufacturing the missing component[10].

 

Economic situation


On April 2, the unemployment rate had increased six-fold to 25%. 90% of the new comers are on unpaid leave, taken care of by the government. Before the outbreak of the coronavirus, the unemployment rate was only structural, around 4%.[11]

 

Israel's government approved emergency measures for partial lockdown that could turn to total lockdown over specific spots and populations in the coming days, if containment measures prove to not being sufficient to flatten the infection curve in a sustainable way. As in other countries, business is limited to very essential activities such as food and drug stores, building sector, strategic companies such as utilities, pharma, and R&D. Cultural and recreational establishments as well as schools and universities were shuttered as a result of banning gatherings of over 10 people.

 

Israel was hit with the emergency when its economy demonstrated positive growth and strong currency. However, the provisional government has no approved budget and the deficit was already larger than planned. Major financial damage is expected to come from a slowdown in productivity due to reduction in demand and the fall of financial markets. These will be due to restrictions on labor, the shutdown in the tourism industry (to which Israel has a high exposure), limited public transportation, the closure of the education system and of non-essential services, and above all the ongoing halt of large parts of the economy. Growth of domestic product will diminish and could even be negative. Households will lose earning power, and the Israeli capital market, like the global market, will be hit with sharp declines that hurt pension funds, advanced study funds, and investment opportunities.[12]

 

The credit rating agency S&P, still forecasted recently that Israel’s economy will see growth in 2020 despite the pandemic and that only an additional event such as a real estate collapse or an armed conflict could cause negative growth. (AA- with a stable outlook)[13]

 

Public transportation is gradually reduced to its minimum. Having closed down the whole country train network, the transportation ministry is taking advantage of the freeze to accelerate extension, maintenance and electrification works. This is good news, since poor infrastructure was identified as a main bottleneck for the Israeli economy, that ranks number 1 for traffic jams in OECD countries.


Announced on March 23, the Bank of Israel is purchasing NIS 50 billion in government bonds in order to ease credit conditions in the economy and support economic activity. The Israeli Shekel rebounds 10% against the Dollar and the Euro to its pre-Corona level.[14]

 

Following the announcement of a Unity government on March 26, the governmental Corona package for the next 3 months is adopted overnight. The Israelis wake up with NIS 8 billion (€ 2 billion) for funding unemployment and support to SME’s. In what seems an uncoordinated overbid, those NIS 8 billion turn to become NIS 80 billion 4 days later… (see introduction), being equal to 5,7% of GDP. Self-employed will also benefit from a direct aid of 6,000 NIS ($1,666) over the next two months.  An additional reserve is created for preventing corporate failures, and massively investing in health, infrastructure and building.

 

Innovation

Israeli companies rely on their advantage in geolocation, big data, vision systems and cyber to offer prediction, detection and surveillance solutions, while others rely on 3D printing and innovative materials to provide quick-and-dirty emergency solutions.

 

Based in Tel-Aviv, iKare Innovation [15] redoubles nowadays its efforts to boost projects between “Corona compatible” Israeli innovations and potential foreign industry partners. The list of Israeli startups on the Corona battle field would be too long for this article. Let’s mention two highly promising projects iKare Innovation is involved with:

  • Nanoscent is currently implementing its core technology to detecting Corona trace in the air exhaled from our nose in order to provide fast testing to the market in the coming months. This “less than two minutes” solution will be badly needed to get back to business and to re-open public sites and transportation.

  • Pluristem just received the Israeli Ministry of Health’s clearance and started treating a cohort of COVID-19 patients under a per-patient compassionate use. Their core cell stem injections will be proposed as a treatment for severe pneumonia resulting from COVID-19, boosting immunity response. Pluristem is looking to extend its development plan in Europe and the U.S.

A lot of hope is placed in the Israeli innovative health sector, Israel hosting some of the world leading companies and research institutes that are currently part of the worldwide race for developing vaccines and treatments.

The biology and drug blockbuster Weizmann Institute has mobilized all its resources to come up with diagnosis labs and tools to help sustain the accelerated detection campaign.

 

Hospitals turn to crowdsourcing and 3D printing amid equipment shortages.[16]

 

A virtual "HackCorona" was held throughout March 19-20, by Birthright Excel in collaboration with the MIT and the 8200 Alumni Association, to mitigate restrictions placed by the government to control the spread of the novel coronavirus.[17]

 

All the Israeli innovation ecosystem seems busy responding to various Call for Corona projects. The Authority of Innovation has launched a Call for Proposals for R&D Plans of Industrial Products for the Prevention and Treatment of the COVID-19 (Coronavirus)[18].

 

Israel being an associate country to European Research Programs, Israeli companies rank among top recipients for decades.

The EU called for startups with Coronavirus solutions to apply for €164 million European Commission funding. The call is for startups and SMEs with technologies and innovations that could help in treating, testing, monitoring or other aspects of the Coronavirus outbreak to apply urgently to the next round of funding from the European Innovation Council. [19]

 

Innovation business goes on: fundraising/exits

 

A survey of 131 venture capital funds with over $1 billion in assets under management conducted by Israeli startup Wizer shows that 32% will reduce spending, 25% intend to completely stop investments while 17% answered they would continue to invest as usual another. Only 5% of the funds said they intend to increase their investment activity, the remaining 21% said they did not know how their activity would be affected.[20]

  • On the Exit side, business seems to go on, with Checkmarx, an Israeli security company was sold on the 16th of March to Hellman & Friedman, another private equity firm at the non-discounted valuation of $1.15 billion, despite the coronavirus pandemic.[21]

  • As for VC’s, venture capital firm Pitango, one of Israel’s leading venture capital funds, has raised this week $250 million for a new growth fund. Pitango has invested in more than 250 companies to date and has $2.3 billion in assets under management.[22]

  • Israeli-founded public transport company Via announced raised $200M in a Series E round led by Italian holding company Exor. The deal values Via at $2.25 billion. Israeli Pitango VC participated in the round.

  • Same for Israeli-founded Pyramid Analytics who just announced closing a $25M round.

  • Most startups try to delay their rounds in order to preserve valuations, searching for other forms of funding.

Initiative from the corporate sector?

 

Although all the segments all the Israeli population seem to be mobilized, the rather small Israeli corporate sector remains relatively silent. Teva, one of the rare Israeli giants, made an announcement that it will donate more than six million doses of hydroxychloroquine sulfate tablets through wholesalers to hospitals…. across the United States, starting March 31. Over 10 million tablets are expected to be shipped within a month. [23]  We can presume it will also help Israel, since it has just cleared the way to using Chloroquine on March 26.

 

Israeli DNA and genealogy company MyHeritage announced that they will be working with Chinese genomics giant BGI to build a giant emergency testing facility which will allow Israel to perform an additional ten thousand coronavirus tests per day. Unfortunately, the Ministry of Health abruptly blocked (provisionally?) the initiative while the lab was expected to be completed by April 9, and after a short while, to double the testing output to around 20,000 tests daily. "Our goal is not to become rich, but to benefit humanity. This is the time for the Israeli high-tech industry to shine," says CEO Gilad Japhet. MyHeritage is known for its numerous philanthropic initiatives around the world. MyHeritage has also donated 66,000 swabs to Israel, a financial effort worth $10 million. According to Japhet, you might need a nano-metric head swab, which is the type of swab the company uses for its DNA testing in order to detect small viral concentrations.[24]

 

The Israeli respirator supplier Inovytec will supply the IMoD with 1000 respirators as part of the emergency equipment process.

 

Conclusion

 

Israel was just ranked the number one country in the world in a COVID-19 Safety Ranking. iKare Innovation has contacted the Hong Kong based Deep Knowledge Group who has disclosed 22 out of the 24 families of metrics used in the benchmark. [25]  

Source: Information provided by Deep Knowledge Group, April 4th

 

Well, I hope these hidden criteria have something to do with

the bottom line total of deaths per Corona cases, since Israel is far from topping other countries in testing efficiency, or emergency readiness when entering the crisis. True, Israel shows one of the lowest mortality rate, and on April 4, recovery rate is still above 90%. Its health system has not been yet overwhelmed.

 

In this global race against the virus, the advantage of humans lies in our ability to exchange information at digital speed. It took 10 years to the medieval bubonic plague to cross the continents, decimating up to half of the European population. Lack of information, lack of science and lack of cooperation.

In 2020 Middle East, this cooperation is already at work for the exchanges of equipment and information between Israel, the Palestinian territories, the Gulf and Arab countries.

 

Given the current political and institutional crisis, Israeli public trust stood firm so far, outside anti-state spots. The fake news, the reversals or betrayals that have caracterized the political campaigns, the manipulations, the deliberate will to highlight the social divisions to stay in power, are not forgotten. Yet, the government of national unity that should be finalized these days is likely to help Israel overcome the economic and sanitary crisis and could prove to be a unique opportunity to upgrade to OECD levels the budgetary allocations for health, social and infrastructure that have suffered from decades of abuse and mistreatment.

 

Netanyahu, Prime Minister since 2009, is fighting for his survival. His trial for corruption, fraud and breach of trust, was to open... on March 17.

 

Between health and privacy, between enforcement and empowerment, Israel has not yet chosen. The Judicial power weakened over the past few years by the Executive and the Legislative attacks. In the absence of a working parliament for almost a year, judges were left alone trying to monitor and contain the revolution in progress, with some success.

 

And what about the Cyber ​​of which Israel is the world champion? 20 to 25% of cyber solutions come from Israel. Classified, Israeli cyber businesses are working tirelessly to deal with the new vulnerabilities created by remote control of all activities. We may be confined, but our data is more mobile than ever. A Bonanza for the bad pirates.

 

The ecosystem of Israeli startups has just established several breaking record years of investments and exits. Agile and vigorous, adapting to the new situation, reducing the burn-rate, focusing on finding solutions with a commando mindset, the immaterial economy of Israel benefits from the exceptional assets of the Startup Nation to ensure its resilience.

 

The author is CEO of iKare Innovation, President of France’s Foreign Trade Advisers in Israel and InnoCherche’s ambassador in Israel.


For any question or remark: Anne.baer@ikare-innovation.com

 

_____________________________________________________

 

[1] http://taubcenter.org.il/a-wellness-check-of-israels-hospital-system/

 

[2] https://www.timesofisrael.com/drive-through-coronavirus-testing-sites-open-in-haifa-jerusalem-and-beersheba/

 

[3] https://www.haaretz.com/israel-news/.premium-israel-preparing-to-use-unapproved-medication-to-treat-coronavirus-1.8712940

 

[4] https://www.tracetogether.gov.sg/

 

[5] https://www.jpost.com/Israel-News/New-app-tells-you-when-youve-come-in-contact-with-a-coronavirus-patient-621944 https://www.calcalistech.com/ctech/articles/0,7340,L-3802875,00.html

 

[6] https://www.globalfirepower.com/country-military-strength-detail.asp?country_id=israel

 

[7] https://www.jpost.com/Breaking-News/IDF-to-open-internal-lab-to-test-soldiers-for-coronavirus-622122

 

[8] https://i-hls.com/archives/99917

 

[9] https://i-hls.com/archives/99935

 

[10] https://www.jpost.com/Israel-News/Missing-componant-in-Mossads-coronavirus-test-kits-developed-in-Israel-621718

 

[11] https://www.jpost.com/HEALTH-SCIENCE/945-Israelis-test-positive-for-coronavirus-621857

 

[12] https://www.inss.org.il/publication/coronavirus-and-the-challenges-for-israel/

 

[13] https://www.calcalistech.com/ctech/articles/0,7340,L-3802191,00.html

 

[14] https://en.globes.co.il/en/article-bank-of-israel-to-buy-nis-50b-in-govt-bonds-1001323026

 

[15] The author is CEO of iKare Innovation.

 

[16] https://www.nbcnews.com/tech/innovation/worldwide-hackathon-hospitals-turn-crowdsourcing-3d-printing-amid-equipment-shortages-n1165026

 

[17] https://www.jpost.com/Jpost-Tech/Hackathon-seeks-to-find-solutions-for-coronavirus-challenges-621661

 

[18] https://innovationisrael.org.il/en/opencall/industrial-products-for-prevention-of-coronavirus

 

[19] https://www.eu-startups.com/2020/03/urgent-call-for-startups-with-coronavirus-solutions-to-apply-for-e164-million-european-commission-funding/

 

[20] https://www.calcalistech.com/ctech/articles/0,7340,L-3803850,00.html

 

[21] https://techcrunch.com/2020/03/16/insight-partners-sells-security-firm-checkmarx-to-hellman-friedman-for-1-15b/

 

[22] https://www.calcalistech.com/ctech/articles/0,7340,L-3803510,00.html

 

[23] https://www.jpost.com/HEALTH-SCIENCE/Teva-donates-potential-coronavirus-treatment-to-hospitals-across-the-US-621688

 

[24] https://www.calcalistech.com/ctech/articles/0,7340,L-3803120,00.html

 

[25] https://www.dkv.global

 

 


 

 

 

 

 

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