For Elite Israeli Intelligence Alumni, Cybersecurity Is Out and Health Tech Is In

Like other soldiers serving in the Israel Defense Forces elite 8200 technology unit, Gadi Rotenberg could have followed the usual path of working a highly paid job in cybersecurity or starting up his own company. But as he prepared to leave left the army five years ago, he realized that wasn’t for him.

“I knew I didn’t want to join a cybersecurity company,” he says. “I see the whole field of hacking as very problematic while cyberdefense in mainly dealing with problems caused by poor engineering.”

What does interest him is biotechnology. About a year ago, right after he attended a lecture on the emerging combination of biology and technology, he got in touch with an old 8200 colleague, Uri Shaked, and launched Smashing DNA – a program to give graduates of the cybersecurity units the tools and knowledge they need to work in the field.

“I sent an email to hundreds of people and thought I would get back a few responses. To my surprise, more than 100 responded,” says Rotenberg. Among them were veteran entrepreneurs who had already had an exit or two.

The course runs for several weeks, with an intensive schedule of lectures, panel discussions with entrepreneurs, experts and investors and homework assignments.

The IDF’s 8200 unit is akin to an Israeli version of Stanford and MIT. Its graduates are known for their technology skills and account for a disproportionate number of startup companies in the country. Naturally, many of them specialize in the cybersecurity skills they learned in the army.

But lately, as the Smashing DNA program shows, alumni of 8200 and other IDF elite technology units are starting to look farther afield.

Thus, Rotenberg and Shaked’s program is part of a wave of courses introducing these alumni to the world of biotechnology, health-tech and computational biology.

The growing interest in biotech may seem counterintuitive. It’s easier for 8200 alumni to stay in the sector they know and leverage the unit’s reputation. Cybersecurity is as much in demand as ever: According to Startup Nation Central, which monitors the Israeli tech industry, cybersecurity startups raised $1.6 billion last year. In contrast, pharma startups took in just $291 million from investors and digital medical firms earned $836 million.

The figures for exits or sales of tech firms aren’t that encouraging. IVC Research, an industry observer, estimated the sales of software and information technology businesses at $8.2 billion. Biotechnology’s total was just $2.3 billion.

For people opting to work in the industry rather than starting their own company, the pay is less attractive. The Central Bureau of Statistics estimates that the average pay for computer science graduates two years post-graduation was 28,000 shekels ($8,170 at current exchange rates) a month in 2017. Biology graduates were earning just 7,400 shekels a month.

But the worlds of computer science and biology are converging. Artificial intelligence and data sciences are increasingly being deployed in anticipation they may lead to medical and scientific breakthroughs.

There are already companies in Israel extracting insights from vast quantities of health data or applying computerized vision to help with diagnoses. Digital health companies are developing wearables and apps.

A hot new area is utilizing AI to help reduce the high cost of developing new drugs. The pharma company Novartis, for instance, announced in October it was teaming up with Microsoft to launch an AI lab help accelerate the discovery and development of “transformative” medicines.

Other areas where these fields converge is 3D printing of human tissue and organs, nano-robots for delivering medicine inside the body and genetic bioengineering.

“Biotechnology innovation isn’t coming from research and specific trials in labs today but from data science and big data,” says Rotenberg. “That’s in the comfort zone for people with a background in mathematics and algorithms.”

Last December, the organization of 8200 graduates opened its own course 8200bio. Its organizers say it is working to promote the connection between life sciences and medicine and computer science via meetings, events and courses, with the stated goal of “harnessing 8200 graduates and graduates to solving the difficult and complex problems in the health worlds through software.”

“There’s a critical mass of [8200] alumni interested in this connection,” says Arod Balissa, domain manager for Deloitte Catalyst and one of the founders of 8200bio. “People who are now focused on high-tech and cybersecurity feel they need to be doing something beyond that and to connect with something on an emotional level. What could be more beautiful and exciting than helping people to be healthier?”

Public benefit company 8400 offers a similar kind of initiative. Launched in 2017, its Spearhealth program helps alumni of army intelligence units to form health-tech communities.

Last year, it says, it formed 10 sub-communities with more than 1,250 members from former soldiers from 8200, the 81 intelligence technology unit, Talpiot and people who once served in naval commandos and other elite combat units. They are scheduled to hold a first conference in April and later to launch a boot camp to introduce them to the life sciences.

“The goal is to create industry opportunity groups for graduates and to turn this into a growth engine for the country,” says Dafna Murvitz, co-founder and CEO of 8400.

Eilon Tirosh, an investor and entrepreneur, and member of 8400, says: “Today, I’m more interested in biomed and health technology. Everything you touch on in it makes the world a better place. Also, it’s no less challenging.”

“When I first entered the field, I realized there was a shortage in data science people and that many entrepreneurs in it lacked business and management skills,” he adds.

That is what led him to the idea of creating a pool of ex-army professionals with skills in cybersecurity, gaming and AI, but who had little or no former exposure to biotech or health-tech.

“In my conversations with them it emerged that they want to do something of real and important value. They’re not sure of they want to do the same thing they were doing in the army in civilian life,” Tirosh says. His goal is to help the form teams that form startups or join existing businesses.

The government has been helping the process, with the launch of a program in 2018 to encourage digital health initiatives in the hope of making it an economic growth engine. The program’s centerpiece is a nationwide database of Israelis’ medical data being made available to researchers and companies.

The government’s Israel Innovation Authority is also helping engineers to migrate to the life science sector. It recently launched a Bio-Convergence program to help with interdisciplinary innovation on the assumption that high-tech has peaked and Israel must develop new industries.

Itai Kela, head of health-tech at the IIA, says the program isn’t about the “buzz and the hype of AI” but about biotech hardware engineering. “The combination of electronics, hardware engineering – this is the foundation of our medical future, For example, customized treatments and medicines that are administered at exactly the right time and right dosage.”

For that, Kela said, companies need “engineers who understand biology and biologists who understand engineering and software. The challenge is to build a cadre of talent. Why don’t the big pharma companies do research and development in Israel? Because there’s a shortage of talent.”

Kela said he thinks it will be easier for engineers to learn the ropes of life science than for biologists to acquire engineering skills. “We need to attract people from 8200 and 81, Talpiot graduates, and trained people from high-tech and bring them into the life sciences,” he said.

Right now, there’s no concrete program to do that, but at the IIA they talk about increasing support for practical academic research and establishing dedicated labs in relevant areas. Kela envisages startups founded by interdisciplinary teams of classically trained engineers and biologists.

“With this talent pool of people with a foot in both worlds we could building a world-leading industry. There’s a lot of excitement about this sector because everyone recognizes in the next big wave – and Israel can be a leading player in it,” he says.

Where’s the money?

The last piece of the puzzle is capital. Rotenberg says he has seen an upswing in the amount of money being invested in these industries. Tirosh agrees. “A lot of things that didn’t happen in the past are coming together now,” he says.

“There’s a convergence of changing regulations, large amounts of data being amassed and money being available, including from general venture capital funds entering the field of life sciences. Everyone wants to play the game. I believe health-tech will be the next growth engine for Israeli high-tech,” Tirosh says.

But Israel faces a bigger problem of a shortage in engineers. There just may not be enough to lure into the emerging health-tech industry in an era of heightened competition for talent.

A partial answer to this is for startups to recruit more biologists.

“Every engineer who starts up a bioconvergence company will employ four or five biologists,” says Kela.

Adds Balissa: “Biology graduates ask me what they should do with their degree. Once the answer was to work for a drug company or in medical devices. For someone who wanted to be an entrepreneur and develop a medical device or a drug that may or may not work, it meant spending 30 years of your life on it. But the entry of software into the world of biology and medicine is opening up new employment and entrepreneurial options.”

The other question is whether people working in a high-tech environment can make the intellectual leap to the world of biology, where solutions are often less certain and more complex.

They are used to a market where products are developed and evolve quickly. In medicine, the pace is slower and can get tied up in regulatory processes. A new treatment can be a decade in the making.

Despite his undertaking in biotechnology, Rotenberg is working on a startup outside the field. “It’s a much harder field,” he says. “The money isn’t like it is in high-tech and cybersecurity. Also, I don’t have enough experience to come to someone in biology and tell them, ‘Comes, let’s form a startup.’”