South Korea and Israel must speed up the conclusion of their free trade agreement in order to maximize the synergy from Korea’s manufacturing power and Israel’s innovation strength for leadership in future mobility and biotech, Israeli President Reuven Rivlin said.
“By working together, Korea and Israel can strengthen each other and accelerate the Industrial Revolution 4.0,” Rivlin told Korea’s Maeil Business Newspaper in an email interview.
Rivlin arrived in Seoul on Sunday for a four-day state visit to discuss prospects for deeper economic cooperation. He held summit talks with President Moon Jae-in on Monday.
Rivlin called for a swift conclusion of a bilateral FTA to “make a real difference in how we work together.” He also picked out automotive, biotech and med-tech as sectors that could benefit from greater collaboration and encouraged more investment from Korean companies.
At the forefront of this growing bilateral alliance has been the Korean auto giant Hyundai Motor, which has made a string of strategic investments in Israeli startups to bolster its capabilities in connected cars and autonomous driving. In 2017, it invested in Opsys, an Israeli maker of optic based sensors, and a year later followed up with an investment in Autotalks, a communication chipset manufacturer. Last month, it decided to back the Israeli artificial intelligence startup MDGo to develop solutions that predict and analyze passenger injuries.
“For both of us, human capital is very important and we value education and excellence. These create deep ties that can help us work even more closely together,” Rivlin said.
Below is Maeil’s written interview with Rivlin, which has been edited and condensed for clarity.
Q: What do you think Israel and South Korea have in common? In what areas should the two countries cooperate?
A: It may sound surprising, but I believe that our two countries have a lot more in common than first meets the eye. We are both ancient cultures, thousands of years old, and have a strong connection to our homeland. But we are also young countries that are deeply committed to democracy and freedom and building economies that are changing the world. For both of us, human capital is very important and we value education and excellence. These create deep ties that can help us work even more closely together.
As you know, Israel is a start-up nation where ground-breaking technology is developed. It is a natural fit for the Korean economy, which excels in developing and manufacturing. By working together, Korea and Israel can strengthen each other and accelerate the Industrial Revolution 4.0 that President Moon is leading. There is a wide range of areas on which we can work together, including cyber, trade and technology. I also hope that we can make progress on the free trade agreement between our two countries, which could make a real difference to how we work together.
Q. Israel has seen remarkable economic growth despite facing a security threat. How could Israel separate security and economy?
A. Like Korea, Israel overcame initial difficulties before becoming the modern state of today. When we declared independence, we were immediately faced with a war of survival, and have fought several wars since. We also welcomed millions of immigrants from all around the world, creating the diverse society we have today. I believe that one of our strengths as a people is that we have looked on every challenge as an opportunity. This is something that I also see in the Korean people, who have created a country that is rightly called the Miracle on the River Han.
The security situation is an excellent example of how challenges can be turned into opportunities. When faced with a threatening environment, we began to develop a defense industry that would help us face those challenges. Some of those projects became world-leading products, but the ecosystem that grew up between industry, academia and business in Israel has produced a far greater number of technological breakthroughs.
Q. Israeli people are known for their creativity. What is the secret behind that creativity?
A. I don`t know if there is any secret, but just like you we are a people that looks to find solutions to problems. In Jewish tradition, we put a high value on asking questions and working together to find answers. That is also how the State of Israel has faced significant challenges over the years.
Q. Some point out that the source of creativity is in Israel`s unique education system.
A. If you were to come and visit an Israeli classroom, you would find that whether the teachers and pupils are religious or secular, Jewish, Muslim or Christian, it is a place of questions and discussion. We believe that a culture of questioning and finding answers helps our young people develop skills that will allow them to solve problems in the future.
Q. Israel is also very strong at venture capital. Does the government have any role in this?
A. Technology innovation requires support at the beginning and it is important that good ideas get funding at an early stage, whether from the public or private sector. We like to refer to the triangular relationship between business, government and academia, where each strengthens the other. For many years, we led the world in the amount of state funding for research and development, investing over 4 percent of our GDP in early-stage technology companies. Korea is now investing at similar levels, which is very encouraging. We also have a very active venture capital sector which invests in the best start-ups and helps them develop technologies and products that make the world a better, safer place.
Q. South Korea is eager to develop innovation and technology in the time of the 4th Industrial Revolution. What kind of lesson can South Korea learn from Israel? And how can the two countries cooperate for mutual benefit in terms of innovation and technology?
A. There is almost no field where Israel and Korea cannot work for mutual benefit in the fields of innovation and technology. Our economies have strengths that complement each other, rather than competing with each other. There are some fields where we already work together closely and can do even more, such as the automotive, biotech and med-tech sectors. Korean investors have already made some acquisitions in these fields and I hope that there will be even greater cooperation in the future.
Q. The negotiation of South Korea-Israel FTA began in 2016 but it hasn`t finished yet. When will it be completed and what benefits do you expect when it enters into force?
A. Over the past 25 years or so, Korean products have become part of the daily life in Israel. Your cars are on every street and your electronic goods are in every home and business. There is a great deal of cooperation between our economies in a wide range of fields, but there is much more that we can do. In the fast-growing field of automotive technology, there is a natural fit between Israeli innovation and the Korean manufacturing industry. The same is true in the biotech and med-tech sectors, as well as in energy, water and environment. In fact, there is scarcely an area where Israel and Korea cannot cooperate to significant mutual benefit. I know both sides are working tirelessly to conclude the negotiations over the Free Trade Agreement, which will contribute to increased bilateral trade between our two economies.
Q. How does Israel deal with employment? Slowing economic growth has also put a dent on employment.
A. Israel`s economy has changed a great deal over the past seven decades. We are no longer so reliant on agricultural exports, and instead our high-tech sector is now a major sector, contributing to our trading patterns and employment. Fortunately, our economy has experienced steady growth over many years, and employment is at an all-time high.
Q. Israel is called a start-up nation. What does the government of Israel do for start-ups and what does the private sector do to have the best environment for start-ups?
A. When I was growing up, before the State of Israel was established, the Jewish community had limited resources and had to make difficult decisions. But even then, with only a few hundred thousand Jews living in the Land of Israel, we had two universities - the Hebrew University of Jerusalem, where my father was a professor of Arabic, and the Technion in Haifa, which is a technical university. Now, seven decades later, we have over sixty institutes of higher education, including world-leading research universities. This points to the importance we have always placed on education, from early years until post-graduate. As a country lacking in natural resources, like Korea, we have always invested in education as the best way of creating a modern economy. Those university graduates are one part of our success in innovation and technology, but so is the support we give to start-ups that I discussed earlier.
Q. Where does the Israeli government put more emphasis on, growth or distribution? How should the two goals, which sometimes go against each other, be balanced?
A. I believe that there is a balance to be struck, where economic growth is shared amongst all parts of society, but where there is still a strong incentive to build businesses that make profits for their owners and workers. We must make sure that the weaker members of society are not left behind, and that those who create prosperity for the country as a whole are encouraged to do so.
Q. North Korea`s nuclear weapons are threats to the Korean Peninsula and East Asia at large. What advice would you offer for the peace of the Korean Peninsula?
A. I hope and pray that peace comes to the Korean Peninsula, just as I hope and pray that our region will know peace. As leaders, we must never cease in our efforts to find a real and permanent end of conflict, even when it is difficult to see a clear path to peace. This is our obligation to the people we serve.
Q. What are some topics you would like to discuss with President Moon Jae-in?
A. I am very much looking forward to my meeting with President Moon and discussing how our two countries can work even more closely together. As two countries with similar values, I believe that we can learn a great deal from each other.
By Kim Duk-sik and Kim Hyo-jin
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]