10 Israeli high-tech areas making waves

Ferry Biedermann, special to CNBC.com

Whether it's cybersecurity, drones or medical marijuana, Israel is at the forefront of some of the most important high-tech developments in the world. The small Middle Eastern country of just over 8 million people fashions itself as the "Start-up nation". Here are 10 areas that contribute to that image:

Cybersecurity

Israel's cybersecurity sector is world leading with giants such as Check Point and CyberArk as well as more recent start-ups such as GuardiCore and Fireglass. It attracted more than $680 million in funding in 2016, which amounts to some 15 percent of capital raised for the sector globally. The field is fed by graduates from the Israeli military and the intelligence services, particularly , and produced 83 start-ups last year alone. Check Point, among others, is listed on the NASDAQ and is the Israeli company with the highest market capitalization on the index: $17.8 billion.

Transport and navigation
A still image from a Mobileye video.
Source: Mobileye

's $15.3 billion acquisition of Israeli autonomous driving technology firm Mobileye in April was the largest high-tech business deal in Israel's history. It set the high-tech sector abuzz and dwarfed a previous deal in a related field, 's 2013 takeover of Israeli navigation app Waze for $1.15 billion. Among the plethora of other Israeli firms making waves in this sector are Uber-rival Gett, public transport app Moovit, and Argus, which provides cybersecurity for automotive systems. Car data collector and distributor Otonomo is another start-up to watch, chances are it will be watching you.

Medical technology
Medical Realities

As with many other high-tech fields, Israel's medical technology advances have come in large part from the defense sector. One company, based in Ohio but started by two Israelis, is Surgical Theater, where two former air force officers use virtual reality flight simulator technology in brain surgery modeling. Other start-ups also are highly interdisciplinary, such as Zebra Medical Vision, which teaches computers to read and diagnose medical imaging, for example x-rays. And, on a high note, Israel is at the forefront when it comes to the technological application of medical marijuana, as in the Syqe inhaler for which the company raised $20 million in 2016, for which it has signed a distribution deal with Israeli pharmaceutical giant Teva.

Water
Fotog | Getty Images

Israel, a relatively dry country, is a leader in water treatment and desalination. IDE is Israel's longstanding desalination company now producing the IDE Progreen "desalination plant in a box". There are also newer competitors such as the start-up TSD that aim to cut energy costs dramatically. As for efficiency and water management, software like TaKadu detects and prevents leaks in numerous countries around the world while Blue I ensures water quality, whether it's Beijing's water supply or your swimming pool.

Agriculture technology
Michael Interisano | Design Pics | Getty Images

Drip irrigation may have been around in one form or another since the Chinese wrote about it in the first century, but the system was made viable for modern agriculture by advances in Israel in the 1950s and 60s. Now, half a century later, the emphasis is on high-tech applications for water management and extraction. Two examples are CropX, a start-up that uses sensors to optimize irrigation, and Prospera, an artificial intelligence software company that combines the use of field cameras and machine learning for farm production management. Then there are completely new types of agriculture technology tools exemplified by Taranis, an information gathering and data analysis platform for farmers that can be used on a cell phone or tablet.

Space, aviation and drones
Michael Nagle | Bloomberg | Getty Images

Yet another field that's, unsurprisingly, closely related to Israel's military development. The country is by far the largest exporter of military drones. It's estimated that Israel has sold over 60 percent of all what are officially called unmanned aerial vehicles, UAVs, between 1985 and 2015. It has established firms such as IAI, Elbit and Rafael but the field is also teeming with start-ups that are increasingly oriented toward the civilian UAV market, which has taken off over the last few years. Airobotics, for example, has just received the country's first permission to operate a fully automated payload carrying drone. Others, such as Flytrex, have successfully been marketing small piloted drones for several years now. Also, Flytrex offers fully autonomous drone delivery systems for businesses. The CEO of Flytrex, Yariv Bash, also heads SpaceIL, the Israeli participant in Google's Lunar Xprize that seeks to land a vehicle on the moon. Satellites is another market, with Israeli-Swiss start-up SpacePharma earlier this year launching its first nano-satellite to conduct biochemical experiments in space.

Energy and solar power
A worker walks past some of the 55,000 mirrors directing sunlight toward the Ashalim solar tower, which is under construction near the southern Israeli kibbutz of Ashalim in the Negev desert, on May 26, 2016.
JACK GUEZ | AFP | Getty Images

Another field in which Israel has been an early adopter, with a historically high percentage, nowadays 90 percent, of homes taking hot water from solar panels. One solar power pioneering company, BrightSource Israel, formerly LuzII, is building the world's tallest solar tower in the Negev desert. More recent start-ups like SolarPaint have developed waver-thin coating that can turn any surface into a solar panel. In yet another an example of cross-fertilization with the defense industry sector, mPrest, which developed the software driving Israel's anti-missile system IronDome, raised $20 million last year from among others GE Ventures, to adapt its product to manage smart grids. Battery technology is another field in which advances are being made, particularly by start-up StoreDot, specializing in rapid-charging batteries.

A.I., machine learning and robotics
A man demonstrates the use of a robot by Roboteam during the Association of the United States Army (AUSA) Annual Meeting and Exposition in Washington,DC on October 14, 2014.
NICHOLAS KAMM | AFP | Getty Images

This is a mixed bag of applications that impact many different fields. Take, for example, Intuition Robotics, started by yet another graduate from Israel's military intelligence unit 8200, which earlier this year introduced an artificial intelligence-based robotic device called ElliQ that aims to keep elderly people active and engaged. Medaware, another start-up, watches out for prescription error using machine learning. Cortica uses artificial intelligence image recognizing technology, among others to help autonomous car driving systems recognize what's happening around them. One more example is RoboTeam, a leading maker of military robots now branching out into home assistants, for which it secured $50 million in funding last year.

High-tech education and main academic centers
Hero Images | Getty Images

Part of Israel's reality is its security situation, which means most people spend time in the army and has also spurred the development of military and security oriented technologies. Several army units are famed for spewing out veterans that go on to begin high-tech start-ups. These include the now-famed military intelligence Unit 8200 that focuses on issues such as cybersecurity and is an equivalent of the U.S. National Security Agency. But who has heard of Unit 9900 that deals with satellite intelligence? Then there's a plethora of hallowed Israeli science education centers, such as the Technion in Haifa and the Weizmann Institute in Rehovot as well as Tel Aviv University, Hebrew University and Ben Gurion University. On the one hand, Israel last year spent more on R&D (research and development) as a percentage of GDP (gross domestic product) than any other country in the world, just edging out South Korea. On the other hand, its high-tech sector is worried about declining numbers of pupils following technology oriented high-school trajectories.

Presence of large foreign tech companies (Intel, Google, Facebook etc.)
An employee monitors printed images from commercial printing machines at the Hewlett Packard Israel Ltd. Indigo division headquarters in Ness Ziona, Israel, Sept. 15, 2013.
Ariel Jerozolimski | Bloomberg | Getty Images

This year's $15.3 billion acquisition of Mobileye by Intel does not mean that the Israeli company will be packed up and shipped off to Santa Clara, Ca. On the contrary, Intel is making Israel its center for autonomous driving technology. It has a long-standing presence in the country, where it developed some of its fastest chips, such as the Core i6 and i7. As far as autonomous driving technology goes, General Motors has had an R&D center in Israel for almost a decade. A similar tale can be told for most other technology giants, from Facebook and Google to IBM, Microsoft, Apple and HP. Other have smaller presences, including Cisco, Amazon and Yahoo.