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THE NATIONAL POLICY FOR ENCOURAGING ISRAELI HIGH-TECH

THE NATIONAL POLICY FOR ENCOURAGING ISRAELI HIGH-TECH. Yair Amitay Managing Director. 3500. 3000. 2500. 2000. exports. Citrus. ($millions). Software. 1500. 1000. 500. 0. 1992. 1993. 1994. 1995. 1996. 1997. 1998. 1999. 2000. 2001. Jaffa Oranges vs. Software (1992-2001).

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THE NATIONAL POLICY FOR ENCOURAGING ISRAELI HIGH-TECH

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  1. THE NATIONAL POLICY FOR ENCOURAGING ISRAELI HIGH-TECH • Yair Amitay • Managing Director

  2. 3500 3000 2500 2000 exports Citrus ($millions) Software 1500 1000 500 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Jaffa Oranges vs. Software(1992-2001)

  3. 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Low-tech Med-tech High-tech Industrial Export by technological intensity (In million $)

  4. Why Israeli High-tech? • High-Tech is over 50% of industrial production. • Over 50% of industrial export are High-Tech. • World highest per-capita science graduates and scientific workforce: 140 per 10,000 • R&D spending 4.5% of GNP - among the world’s highest. • Civilian spin-offs of defense technologies. • Global JV’s takeovers and international alliances.

  5. Expenditure on Civilian R&D as a percent of the GDP in Israel and in OECD Countries (2001)

  6. OCS Industrial R&D Programs Pre-Seed Generic R&D Technological Incubators Magnet Tnufa Magneton Nofar Eureka Bi-national Funds Bi-national Agreements Competitive R&D Industrial R&D Fund National Seed Fund ISERD (Eu FP6) MATIMOP International

  7. OCS Support Programs Along theInnovation Process RISK Applied academic research MAGNET Nofar EU FP6 Tnufa Competitive R&D INCUBATORS International programs Seed Fund MARKET PROXIMITY

  8. Technological Incubators • 23 Incubators • Grants are 85% of the approved expenses, up to 350,000$. • Duration: up to 3 years. 14

  9. MAGNET - Generic R&D and Technology Transfer Support • Collaborative pre competitive generic technologies. • Grants: 66% of approved budget. • Over 5 participants per project (Industry & Academia) 16

  10. INTERNATIONAL TECHNOLOGICAL CO-OPERATION Why? How?

  11. International Technological Cooperation - Why • Sharing the risk of R&D. • Strategic partnerships for • mutual benefit. • Access to new technologies.

  12. International Cooperation in R&D Bi-national Funds: BIRD - with the U.S.A CIIRD - with Canada KORIL - with KOREA SIIRD - with Singapore BRITECH - with the UK

  13. Portugal The Netherlands Belgium Spain International Cooperation in R&D BI-national R&D Support Agreements: Italy France Germany Ireland Sweden China Finland India

  14. International Cooperation in R&D Multinational Agreements: • European Commission Sixth Framework • RTD Program • EUREKA

  15. Bi-National and Multi-NationalIndustrial R&D Projects Total 65 Total 102 Total 152 2004 Plan No. projects 2002 2003

  16. National and International programmes Yearly Funds Available • Industrial R&D Projects $300M • Magnet $40M • Technology Incubators $30M • Tnufa $ 3M • EUREKA $16M • Israel – Sweden (SIBED) $1.5M • Israel-Italy $1.5M

  17. National and International programmes (cont.) Yearly Funds Available • BIRD-USA-Israel Bi-National R&D Foundation 14 $M • CIIRDF-Canada- Israel Industrial R&D Fund 1 $M • Britech-United Kingdom- Israel Industrial R&D Fund 2 $ M • SIIRD-Singapore -Israel Industrial R&D Fund 2 $M • KORIL – Korea-Israel Industrial R&D Fund 2 $M European 6th Framework programme $4000M

  18. Electronics: 9.1% Life Sciences: 22% Electro-Optics: 8.1% Other: 4% Chemicals: 2.6% Communications: 36.5% Software: 17.3% OCS Grants by Technological Sectors 2003 2 0 0 3

  19. VC INDUSTRY in ISRAEL • Highest VC investments as share of GNP:1.3% during 1998-2000 (5.4 $B) • High Share invested in early stage firms (over 0.6% against 0.1% in most OECD countries). • Large Pool of SU; highest number of IPOs in Nasdaq after the US & Canada • Strong participation of foreign (limited) partners • A distinctive targeted VC industry policy was adopted (Yozma Program, 1993-8)

  20. YOZMA: Objectives and Targets • Objective: Creation of a VC ‘Industry’ rather than stimulating a pool of VC. • Specific Design targets • Attracting high quality foreign & domestic agents; • Strengthen collective learning mechanisms; • Triggering evolutionary selection processes (strategies,organization; etc)

  21. Achieving critical mass of capital and capabilities; YOZMA: Objectives and Targets (cont). • Lead Coordination among agents; • Send a strong coherent signal about the potential of the cluster and of the commitment of the Israeli Government; • Achieving critical mass of capital and capabilities;

  22. THE YOZMA PROGRAMSpecific Design Features-1 • A Government Venture Investment Component-100M$ • 80% Fund of Funds investment: • 10 private/hybrid daughter “Yozma Funds” typically • with a 40% Government Share in each fund (8M$) • 20% direct investments in SU • Limited Partnership form of VC organization; • Incentives to the Upside(call option on Govern. Shares)

  23. THE YOZMA PROGRAMSpecific Design Features-2 • Selection of management teams • Collective Learning:reputable foreign limited partners; links among Yozma Funds, Interactive processes, etc.; Notes on Government Venture Contribution • Scope leading to Critical Mass: triggered a self-sustaining cumulative process engulfing the entire cluster; • Catalytic Program: limited period of incentives; privatized in 98;

  24. Thank You for Your Attention

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