Promoting Israeli High-Tech Industries
2011 - 2012
Competitive Advantage
National Plan
‫האוצר‬ ‫משרד‬
Ministry of Finance
~ Review
Program Highlights
Basic information
Strengths
Weaknesses
~ The Program
Tool box
~ Summary
~ Appendices
“
Israel related” concept
Integrated Program
No Silver Bullet
Continuous Process
Program Highlights
High-Tech
Industries
Software /
Hardware
Nanotechnology Biotechnology
Clean-Tech
Space
Industry
Life Sciences
Innovation C...
Basic Information
Israel’s High-Tech industries
 41.2% of total exports in 2009
 270,000 employees in 2008.
 c. 14% of ...
Industry’s Strengths
Signs of Weaknesses
THERE IS A SIGNIFICANT RISK OF IMPAIRMENT TO THE
CONTINUED GROWTH OF THE INDUSTRY IN ISRAEL
~ Review
Program Highlights
Basic information
Strengths
Weaknesses
~ The Program
Tool box
~ Summary
~ Appendices
Tool Box
 Covers all phases of industry’s growth
 Uses a wide variety of additional tools
Industry Flow chart
Industry and Academic Partnership
 The Chief Scientist formulated a set of designated tools to enhance
the relationships ...
13
The Problem:
 Loss of human capital as Israeli scientists move abroad
(“brain drain”)
Goal :
 To encourage Israeli sc...
Updating the Chief Scientist’s Programs
 Changing the R & D Act regarding the transfer and
sale of franchise knowledge
 ...
The Problem:
 Israeli high-tech is marginal in the global financial
industry’s R&D, the biggest consumer of technology
wo...
16
The Problem:
 Over dependence on ICT and a lack of investment and
limited knowledge in the bio-tech and Life Science a...
The Problem:
 Not enough money is raised by SEED-stage companies.
SEED-stage companies raised approximately $39 million i...
18
The Problem:
 There is a dramatic decline in the ability to raise capital in the
Venture Capital industry in Israel fr...
19
 Encouraging high-tech Israeli companies to acquire small
Israeli high-tech companies
 Encouraging the creation of cl...
20
The Problem:
 Low rate of Arab minority and Ultra-orthodox employees in the
high-tech industries
Solution:
 Incentive...
21
 The government purchases
more than a billion shekels
worth of technology and
services each year from the
high-tech in...
22
Strengthening Technological Education
Tools 6-9 | Encouraging Underrepresented Communities | Dual R&D | CIO | Science /...
23
Governmental Focus on R & D
The Problem:
 No preference or system for integrated national R&D efforts
The Solution:
 ...
~ Review
Program Highlights
High-tech Industries
Strengths
Signs of Weakness
~ The Program
Tool box
~ Summary
~ Appen...
THANK YOU
~ Review
Program Highlights
High-tech Industries
Strengths
Signs of Weakness
~ The Program
Tool box
~ Summary
~ Appen...
2003 2006
30.6% 33.4%
0
10
20
30
40
50
60
70
80
90
100 Philippines
Singapore
Malaysia
Korea
Hong Kong
Israel
Ireland
U.S.
...
ISRAEL
Hong Kong
UK
Singapore
Korea
Sweden
Germany
U.S.
Malaysia
Indonesia
Philippines
Ireland
16.4%
0%
3%
6%
9%
12%
15%
1...
High-Tech Employees by Sub-Branches
2008, thousands
Source: Central Bureau of Statistics, Manpower Survey
85%
15%
Source: USPTO.
Innovative Patents Registered by
Emerging Markets in the U.S. in 2008
)Patents per million people(
U.S. Patent Applications
by Country of Source 2008
Source: CBS.
University Degrees by Field of Study
1987-2008
0
1,000
2,000
3,000
4,000
5,000
6,000
1987
1988
1989
1990
1991...
Israeli Requests for Patents in the U.S.
From 1995-2008
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1,072 ...
Students Studying Abroad Vs. Students
Studying Domestically, 2002-2007
Source: OECD - education at glance.
2002 2003 2004 ...
Israeli Students in the U.S. After
Receiving a Ph.D.
)% Staying and Returning(
*‫התואר‬ ‫קבלת‬ ‫לאחר‬ ‫בשנה‬ ‫תוכניותיהם‬ ...
Forecast in Venture Capital
Investment Activity in 2010
Source: NVCA.
15% 40% 45%
20% 53% 27%
58% 26% 16%
70% 17% 12%
0 0....
1% companies
25% employees
5
9%companies
30%employees
90%companies
45%employees
Large
companies
Over
450 employees
>$100 M...
Source: Gartner.
Expenditure on IT by Sector
THANK YOU
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  • תעדוף
  • הסקר בוצע בתאריכים 30 בנובמבר – 8 בדצמבר 2009 , בקרב 325 קרנות הון סיכון ברחבי ארה"ב. יש לזכור שמרבית קרנות ההון סיכון בישראל אינן קרנות ישראליות.
  • הסקר בוצע בתאריכים 30 בנובמבר – 8 בדצמבר 2009 , בקרב 325 קרנות הון סיכון ברחבי ארה"ב. יש לזכור שמרבית קרנות ההון סיכון בישראל אינן קרנות ישראליות.
  • Competitiveadvantage 110919032458-phpapp02

    1. 1. Promoting Israeli High-Tech Industries 2011 - 2012 Competitive Advantage National Plan ‫האוצר‬ ‫משרד‬ Ministry of Finance
    2. 2. ~ Review Program Highlights Basic information Strengths Weaknesses ~ The Program Tool box ~ Summary ~ Appendices
    3. 3. “ Israel related” concept Integrated Program No Silver Bullet Continuous Process Program Highlights
    4. 4. High-Tech Industries Software / Hardware Nanotechnology Biotechnology Clean-Tech Space Industry Life Sciences Innovation Centers Start-ups Large companies Security Industries Semiconductors Communication s Internet
    5. 5. Basic Information Israel’s High-Tech industries  41.2% of total exports in 2009  270,000 employees in 2008.  c. 14% of total employees in Israel’s business sector  15% of Israel’s GDP
    6. 6. Industry’s Strengths
    7. 7. Signs of Weaknesses
    8. 8. THERE IS A SIGNIFICANT RISK OF IMPAIRMENT TO THE CONTINUED GROWTH OF THE INDUSTRY IN ISRAEL
    9. 9. ~ Review Program Highlights Basic information Strengths Weaknesses ~ The Program Tool box ~ Summary ~ Appendices
    10. 10. Tool Box  Covers all phases of industry’s growth  Uses a wide variety of additional tools
    11. 11. Industry Flow chart
    12. 12. Industry and Academic Partnership  The Chief Scientist formulated a set of designated tools to enhance the relationships between Academy & Industry (marketing, financing, business training, etc.)  Supporting basic research that has the potential to be commercialized  Expanding existing programs ("Magneton", "Nofar," etc.) Tools 1-2 | Industry and Academic Partnership |Israeli scientists abroad
    13. 13. 13 The Problem:  Loss of human capital as Israeli scientists move abroad (“brain drain”) Goal :  To encourage Israeli scientists and entrepreneurs, that have the power to influence and promote the high-tech industries in Israel, to return home to Israel Solution :  Tax deductions on income from royalties, stemming from research abroad, to scientists who have returned to Israel and commercialized the product Israeli Scientists abroad Tools 1-2 | Industry and Academic Partnership |Israeli scientists abroad
    14. 14. Updating the Chief Scientist’s Programs  Changing the R & D Act regarding the transfer and sale of franchise knowledge  Reducing uncertainty for investors  Improving the effectiveness of the Technological Incubators program  Matching the program to the industry's current characteristics  Changing the loan repayment system of the incubator franchises  Creating incentives to the franchises to reward excellence Tools 3-4 | Update of Chief Scientist Programs |R&D for the global financial industry
    15. 15. The Problem:  Israeli high-tech is marginal in the global financial industry’s R&D, the biggest consumer of technology worldwide Solution :  Government incentive to multinational financial entities to establish R&D centers in Israel Description:  New program under the Chief Scientist Office to encourage R&D centers for global financial technology Developing R&D Centers for Global Financial Industries Tools 3-4 | Update of Chief Scientist Programs |R&D for the global financial industry
    16. 16. 16 The Problem:  Over dependence on ICT and a lack of investment and limited knowledge in the bio-tech and Life Science area Solution:  Significant encouragement for the bio-tech industry in Israel Description:  4 public-private funds for bio tech. Government’s $104m to be leveraged with a minimum of $304m private funds. Status:  Status: 4 managers were selected for the funds in April 2010. Development for Bio-Tech Industry Tools 5-8 |Bio-Tech |Early stage capital |Institutional capital | Growing Large Companies
    17. 17. The Problem:  Not enough money is raised by SEED-stage companies. SEED-stage companies raised approximately $39 million in 2009, a decrease of about 56% compared to 2008. Solution:  Allowing investment in an R&D-focused company to be reported as an expense on “day one” Description:  Deducting this investment as an expense against income from all sources, spread over three years Incentives for Early Stage investments Tools 5-8 |Bio-Tech |Early stage capital |Institutional capital | Growing Large Companies
    18. 18. 18 The Problem:  There is a dramatic decline in the ability to raise capital in the Venture Capital industry in Israel from local Pension Funds  The percentage of Israeli institutional investors investing domestically is significantly lower than abroad, 0.2% vs. 2% Solution:  The State will participate in the investment risk of Israeli institutional investors Status:  The State has a budgetary commitment of about NIS 200 million for this program Israeli Institutional Investment Tools 5-8 |Bio-Tech |Early stage capital |Institutional capital | Growing Large Companies
    19. 19. 19  Encouraging high-tech Israeli companies to acquire small Israeli high-tech companies  Encouraging the creation of clusters  Allowing the amortization of goodwill for tax purposes Promoting M&A activity Tools 5-8 |Bio-Tech |Early stage capital |Institutional capital | Growing Large Companies
    20. 20. 20 The Problem:  Low rate of Arab minority and Ultra-orthodox employees in the high-tech industries Solution:  Incentives for high-tech employers to employ underrepresented communities Description:  Adjusting the Ministry of Industry’s support programs, which subsidize the cost of salaries for the high-tech industry  Examining other options to encourage employment via the Chief Scientist’s programs Tools 6-9 | Encouraging Underrepresented Communities | Dual R&D | CIO | Science / Technology Education Minorities & Industry
    21. 21. 21  The government purchases more than a billion shekels worth of technology and services each year from the high-tech industry  The CIO will see all the needs of the government, set strategy and work to create standardized tools and infrastructure  The CIO will have direct responsibility to initiate, lead and operate all horizontal projects for the government  The CIO will create a supportive environment to promote innovation in Israeli industry Appointment of a Government CIO Tools 6-9 | Encouraging Underrepresented Communities | Dual R&D | CIO | Science / Technology Education
    22. 22. 22 Strengthening Technological Education Tools 6-9 | Encouraging Underrepresented Communities | Dual R&D | CIO | Science / Technology Education Structured combination of high-tech industry retirees /young people Retraining program by the Ministry of Education for teaching technological subjects Shortage of teachers in technological education Industry Ministry of Finance Ministry of Education
    23. 23. 23 Governmental Focus on R & D The Problem:  No preference or system for integrated national R&D efforts The Solution:  a body responsible for: recommendations for research focus areas, formulating an action plan and coordinating between governmental bodies  Members of the Body: various government bodies that are in charge of investment in research and development Clean- Tech? Bio-Tech ? Homeland Security ? Tools 10-11 | Bringing Back Israeli Scientists | Governmental Focus on R&D
    24. 24. ~ Review Program Highlights High-tech Industries Strengths Signs of Weakness ~ The Program Tool box ~ Summary ~ Appendices
    25. 25. THANK YOU
    26. 26. ~ Review Program Highlights High-tech Industries Strengths Signs of Weakness ~ The Program Tool box ~ Summary ~ Appendices
    27. 27. 2003 2006 30.6% 33.4% 0 10 20 30 40 50 60 70 80 90 100 Philippines Singapore Malaysia Korea Hong Kong Israel Ireland U.S. UK Germany Sweden Emerging markets Developed economies Emerging markets Developed economies Exports of High-Tech Industries as a % of Exports In 2009, the share of exports of high-tech industries in Israel was 41.2%
    28. 28. ISRAEL Hong Kong UK Singapore Korea Sweden Germany U.S. Malaysia Indonesia Philippines Ireland 16.4% 0% 3% 6% 9% 12% 15% 18% Export of High-tech Industries Average Growth Rate 2004 - 2006 Source: EuroStat, CBS. Developed countries Emerging markets
    29. 29. High-Tech Employees by Sub-Branches 2008, thousands Source: Central Bureau of Statistics, Manpower Survey 85% 15%
    30. 30. Source: USPTO. Innovative Patents Registered by Emerging Markets in the U.S. in 2008 )Patents per million people(
    31. 31. U.S. Patent Applications by Country of Source 2008
    32. 32. Source: CBS. University Degrees by Field of Study 1987-2008 0 1,000 2,000 3,000 4,000 5,000 6,000 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Mathematics Statistics and Computer Science Physical sciences Biological sciences Engineering and architecture
    33. 33. Israeli Requests for Patents in the U.S. From 1995-2008 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 1,072 1,042 1,097 1,358 1,953 2,508 2,707 2,645 2,539 2,693 3,157 3,657 4,410 4,550
    34. 34. Students Studying Abroad Vs. Students Studying Domestically, 2002-2007 Source: OECD - education at glance. 2002 2003 2004 2005 2006 2007 0% 1% 2% 3% 4% 5% 6% 7% U.S UK Germany Sweden Israel
    35. 35. Israeli Students in the U.S. After Receiving a Ph.D. )% Staying and Returning( *‫התואר‬ ‫קבלת‬ ‫לאחר‬ ‫בשנה‬ ‫תוכניותיהם‬ ‫לפי‬ 64% 0 10 20 30 40 50 60 70 80 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Staying Returning
    36. 36. Forecast in Venture Capital Investment Activity in 2010 Source: NVCA. 15% 40% 45% 20% 53% 27% 58% 26% 16% 70% 17% 12% 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Europe Israel India China Increase investment Unchanged Reduce investment
    37. 37. 1% companies 25% employees 5 9%companies 30%employees 90%companies 45%employees Large companies Over 450 employees >$100 M Growth companies Sales >$10 M “Start-Ups” According to CBS: • There are 36 companies with sales greater than $100M • There are 12 companies which were established after 1992 • 4 companies were established after 1995 Source: IVC. Failure of Large Company Development
    38. 38. Source: Gartner. Expenditure on IT by Sector
    39. 39. THANK YOU
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