The Road to Economic Recovery: Digital Bridges and Overpasses

The economic depression in Israel and around the world created by the coronavirus (Covid-19) requires the Israeli government to formulate a 'New Deal for 2020' similar to the 'New Deal' enacted by President Franklin D. Roosevelt's administration in the U.S. between 1933 and 1939. A deal that at its foundation included massive investment in infrastructure meant to drive the country forward economically in the subsequent decades.

But this time, unlike in the first half of the 20th century, the investment isn't in physical infrastructure, but rather in digital bridges, roads, and overpasses.

Traffic jams. Photo: Shutterstock

The 'New Deal' of digital infrastructure must include the digitization of the public service, the deployment of state of the art 5G internet infrastructure, the building of broad infrastructure on the roads for autonomous cars and in the sky for autonomous UAVs, including the allocation and management of communication frequencies and the deployment of sensors throughout the country, the encouragement of remote learning for all ages and the building of remote medical infrastructure that can operate under different scenarios.

The country is currently preparing for the biggest socio-economic challenge it has faced in recent decades. The government can make the most of this opportunity and the socio-consciousness change created by the coronavirus crisis and advance Israel into the next stage of its economic growth by moving to a 'digital mindset.'

 A 'Digital mindset' means shifting a set of attitudes and behaviors from analog to digital, in order to foresee possibilities to incorporate and extract value from technology in work. So far the discussion regarding digital mindset on an international level dealt mostly with the many obstacles standing in its way. But the coronavirus crisis removed many of those obstacles and created a unique opportunity, opening the door for the age of the digital mindset.

The past couple of months brought about changes that hadn't taken place for several decades. In the public, academic and government sectors, conceptual and logistic restrictions and obstacles going back many years were removed, and everyone had to find a way to be relevant, and even improve their performance, by using technology.

In the much-maligned construction and housing sector, for example, local municipalities, especially in the periphery, were able to remove years worth of bottlenecks by convening the committees for planning and construction quickly and effectively over video rather than waiting months to coordinate meetings. By doing so, they provided a transparent, swift, and effective service to the citizens.

A 'New Deal' in the field of digital infrastructures, together with the advantages of the intellectual and operational flexibility unique to Israel, will give the Israeli economy four main advantages:

The first, at the heart of the civil service, is improving efficiency, professionalism, and service to the public.

Secondly, Israel will receive additional motivation to close social and economical gaps once the crisis is over, and will also overcome the geographical gap that currently exists, with most of the civil service, advanced industries, quality medicine, and academic bodies being concentrated in four main cities. This is a deep conceptual change. Instead of bringing the patient from Dimona to a doctor in Tel Aviv, or the student from the Arava to a lesson at Technion Israel Institute of Technology, the improved infrastructure will allow them to meet in cyberspace.

Thirdly, this will be a massive driving force for the Israeli tech sector, which will receive development incentives, large contracts, and significant implementation deals. It will be a way to revive the business sector without resorting to direct funding or grants, which often result in a public outcry and are seen as aid for the rich.

Over recent weeks, the government has displayed a movement towards this direction, for example, the reform to set up a joint digital payment system for all of the different branches of civil service.

This is a good start, but it needs to be part of a strategic and comprehensive plan. The time of a crisis can and should also be a window of opportunity. There is an opportunity and public legitimacy to implement a broad plan that will change Israel's society and economy in the coming decades. A movement that will see Israel have a vastly improved government sector, a strong business sector, a thriving tech industry, and a new global position not just as a tech nation, but as a digital superpower.

Lior Prosor is a General Partner and Co-founder of Hanaco Ventures which invests in Israeli entrepreneurs in Israel and the U.S.