high-tech – The OM Blog by Heizer, Render, & Munson

OM in the News: More AI From the Start Up Nation

This past week, The Wall Street Journal ran three separate articles on more high-tech research coming out of Israel. These complement the blogs we have earlier done on Israeli firms producing 3-D printed hearts (April 23, 2019), warehouse robotics (Nov. 12, 2020), computer vision systems (Nov. 21, 2018), and 3-D printed steaks (Feb. 2, 2019). Here are the latest:

First, about 7.5 million people in the U.S. have trouble using their voices. So Amazon other AI tech providers is working on tools to enable voice-activated digital assistants to understand users with a stutter and other speech impairments. Amazon’s Alexa integration, with software developed by Israeli startup Voiceitt, lets people with speech impairments train an algorithm to recognize their own unique vocal patterns (WSJ, Feb, 24, 2021). Training voice assistants to respond to people with speech disabilities could improve the experience of voice-recognition tools for a growing group of potential users, such as seniors, who are more prone to degenerative diseases.

Second, Israel’s ALYN Hospital is developing a wheelchair-mounted robot arm powered by AI chips designed to mimic the way the human brain works, a technology known as neuromorphic computing. (WSJ, Feb. 24, 2021). Neuromorphic software is programmed to learn about the surrounding environment and adapt to it in real time, enabling the system to automatically adjust the arm’s trajectory and force for precise tasks, such as delicately bringing a cup of water to a user’s mouth. The models learn similarly to the way human babies learn, by seeing an image or toy once and being able to recognize it forever. The focus is on helping patients with spinal injuries, MS and cerebral palsy.

Finally, we earlier reported that McDonald’s paid $300 million for the Israeli firm Dynamic Yield, in a bid to boost sales at drive-thrus and digital kiosks. With Dynamic Yield’s technology, restaurants can vary their electronic menu boards’ display of items, depending on factors such as the weather—more coffee on cold days and McFlurries on hot days—and the time of day or regional preferences. (WSJ, Feb. 27, 2021). For McDonald’s, it provides personalized offers for customers of its stores.

Classroom discussion questions:

Why does Israel have more high-tech startups than any nation beside the U.S?
Why is AI such an important operations management tool?

OM in the News: Move Over, Silicon Valley

In Chapter 8, Location Analysis, we discuss the interesting topic of clustering (see Table 8.3). Clustering is basically locating near competitors so as to take advantage of major resources found in that area. The perfect example is how software and high-tech firms head to Silicon Valley, Boston’s Route 123, and Bangalore (India). Our colleague, David Greenberg, just emailed from India that Tel Aviv belongs near the top of the list and sent the adjacent graphic. He adds: “Aside from Israel as No 2, what I found interesting is that Waterloo, Ontario is on the list. There’s an implication here that a single successful startup (Blackberry, Microsoft) is enough to build a cluster (Waterloo, Seattle)”.

Like the U.S., Israel puts entrepreneurs, successful or not, on pedestals, which allows them to attract the best minds to work with. Some Israeli high-tech innovations: voice mail (1984), multislice CD scanners and cardiac stents (1992), ICQ instant messaging and VoIP “voice over internet” (1995), USB flash drives and computer vision software for road navigation (1999), the pillcam (2001), and Intel mobile technology (2003). More than 90 Israeli firms are listed on NASDAQ–2nd only to the U.S.

Classroom discussion questions:
1. What ecosystem is needed for success in high-tech?

2. Name several other clusters that are not high-tech.

OM in the News: The High-Tech Clusters– Silicon Valley, Boston, Bangalore, and Israel

In our discussion of how companies select a site in which to locate (in Chapter 8), we bring up clustering, which is basically locating near competitors so as to take advantage of major resources found in that area. The perfect example is how software and high-tech firms head to Silicon Valley, Boston’s Route 123, and Bangalore (India). Here the talents of bright graduates in scientific and technical areas and plenty of venture capital are keys to success. Today’s Wall Street Journal (Sept.10, 2012, pp. C5-C8) compellingly adds Israel to this list. Israel’s Minister of Finance ascribes much of its success to “government support of the robust venture capital industry, which is the accelerating spirit behind many start-up companies.”

Indeed the World Economic Forum’s Global Competitive Index just ranked Israel’s “availability of venture capital” 2nd in the world, “world-class capacity for innovation” 6th, and “high number of patents” 4th in world rank. The IMD World Competitiveness Yearbook lists Israel 1st for R&D expenditure (as % of GDP), 2nd for qualified engineers, 2nd for IT skills, 2nd for scientific research, 2nd for entrepreneurship, and 2nd for innovative capacity. The society, like the U.S., “puts entrepreneurs, successful or not, on pedestals, which allows them to attract the best minds to work with,” says one professor in Jerusalem. Included among the active sectors for innovators have been cleantech, agrotech, life sciences, communications technology, and security.

Here is the list of just some Israeli innovations: drip irrigation (1965), the Rummikub game (1977), voice mail (1984), multislice CD scanners and cardiac stents (1992), ICQ instant messaging, voice over internet VoIP), and the MS drug copaxone (all in 1995), USB flash drives and computer vision software for road navigation (1999), the pillcam (2001), and Intel mobile technology (2003). It follows that more than 50 Israeli firms are listed on NASDAQ–2nd only to the U.S.

Discussion questions:

1. Why do some countries have a much higher percent of scientists and engineers than other nations?

2. How does OM play a role in startup companies?