Israel's competitive advantage

1,900 views

Published on

My friend Asaf Luxemburg is behind these great figures and stats, share with your peers

Sharon Weshler
Investment Banker
Israel

Published in: Economy & Finance, Business
0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,900
On SlideShare
0
From Embeds
0
Number of Embeds
7
Actions
Shares
0
Downloads
51
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide
  • 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 .
  • Israel's competitive advantage

    1. 1. Promoting Israeli High-Tech Industries 2011 - 2012 Competitive Advantage National Plan משרד האוצר Ministry of Finance
    2. 2. ~ Review <ul><li>Program Highlights </li></ul><ul><li>Basic information </li></ul><ul><li>Strengths </li></ul><ul><li>Weaknesses </li></ul>~ The Program <ul><li>Tool box </li></ul>~ Summary ~ Appendices
    3. 3. Program Highlights “ Israel related” concept Integrated Program No Silver Bullet Continuous Process
    4. 4. High-Tech Industries Software / Hardware Nanotechnology Biotechnology Clean-Tech Space Industry Life Sciences Innovation Centers Start-ups Large companies Security Industries Semiconductors Communications Internet
    5. 5. Basic Information Israel’s High-Tech industries <ul><li>41.2% of total exports in 2009 </li></ul><ul><li>270,000 employees in 2008. </li></ul><ul><li>c. 14% of total employees in Israel’s business sector </li></ul><ul><li>15% of Israel’s GDP </li></ul>
    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 <ul><li>Program Highlights </li></ul><ul><li>Basic information </li></ul><ul><li>Strengths </li></ul><ul><li>Weaknesses </li></ul>~ The Program <ul><li>Tool box </li></ul>~ Summary ~ Appendices
    10. 10. Tool Box <ul><li>Covers all phases of industry’s growth </li></ul><ul><li>Uses a wide variety of additional tools </li></ul>
    11. 11. Industry Flow chart
    12. 12. Industry and Academic Partnership <ul><li>The Chief Scientist formulated a set of designated tools to enhance the relationships between Academy & Industry (marketing, financing, business training, etc.) </li></ul><ul><li>Supporting basic research that has the potential to be commercialized </li></ul><ul><li>Expanding existing programs (&quot;Magneton&quot;, &quot;Nofar,&quot; etc.) </li></ul>Tools 1-2 | Industry and Academic Partnership | Israeli scientists abroad
    13. 13. <ul><ul><li>The Problem : </li></ul></ul><ul><ul><ul><li>Loss of human capital as Israeli scientists move abroad (“brain drain”) </li></ul></ul></ul><ul><ul><li>Goal : </li></ul></ul><ul><ul><ul><li>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 </li></ul></ul></ul><ul><ul><li>Solution : </li></ul></ul><ul><ul><ul><li>Tax deductions on income from royalties, stemming from research abroad, to scientists who have returned to Israel and commercialized the product </li></ul></ul></ul>Israeli Scientists abroad Tools 1-2 | Industry and Academic Partnership | Israeli scientists abroad
    14. 14. <ul><ul><li>Changing the R & D Act regarding the transfer and sale of franchise knowledge </li></ul></ul><ul><ul><ul><li>Reducing uncertainty for investors </li></ul></ul></ul><ul><ul><li>Improving the effectiveness of the Technological Incubators program </li></ul></ul><ul><ul><ul><li>Matching the program to the industry's current characteristics </li></ul></ul></ul><ul><ul><ul><li>Changing the loan repayment system of the incubator franchises </li></ul></ul></ul><ul><ul><ul><li>Creating incentives to the franchises to reward excellence </li></ul></ul></ul>Updating the Chief Scientist’s Programs Tools 3-4 | Update of Chief Scientist Programs | R&D for the global financial industry
    15. 15. Developing R&D Centers for Global Financial Industries <ul><ul><li>The Problem : </li></ul></ul><ul><ul><li>Israeli high-tech is marginal in the global financial industry’s R&D, the biggest consumer of technology worldwide </li></ul></ul><ul><ul><li>Solution : </li></ul></ul><ul><ul><li>Government incentive to multinational financial entities to establish R&D centers in Israel </li></ul></ul><ul><ul><li>Description: </li></ul></ul><ul><ul><li>New program under the Chief Scientist Office to encourage R&D centers for global financial technology </li></ul></ul>Tools 3-4 | Update of Chief Scientist Programs | R&D for the global financial industry
    16. 16. <ul><ul><li>The Problem: </li></ul></ul><ul><ul><li>Over dependence on ICT and a lack of investment and limited knowledge in the bio-tech and Life Science area </li></ul></ul><ul><ul><li>Solution: </li></ul></ul><ul><ul><li>Significant encouragement for the bio-tech industry in Israel </li></ul></ul><ul><ul><li>Description: </li></ul></ul><ul><ul><li>4 public-private funds for bio tech. Government’s $104m to be leveraged with a minimum of $304m private funds. </li></ul></ul><ul><ul><li>Status: </li></ul></ul><ul><ul><li>Status: 4 managers were selected for the funds in April 2010. </li></ul></ul>Development for Bio-Tech Industry Tools 5-8 | Bio-Tech | Early stage capital | Institutional capital | Growing Large Companies
    17. 17. <ul><ul><li>The Problem: </li></ul></ul><ul><ul><li>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 . </li></ul></ul><ul><ul><li>Solution: </li></ul></ul><ul><ul><li>Allowing investment in an R&D-focused company to be reported as an expense on “day one” </li></ul></ul><ul><ul><li>Description: </li></ul></ul><ul><ul><li>Deducting this investment as an expense against income from all sources, spread over three years </li></ul></ul><ul><ul><li>Incentives for Early Stage investments </li></ul></ul>Tools 5-8 | Bio-Tech | Early stage capital | Institutional capital | Growing Large Companies
    18. 18. <ul><ul><li>The Problem: </li></ul></ul><ul><ul><li>There is a dramatic decline in the ability to raise capital in the Venture Capital industry in Israel from local Pension Funds </li></ul></ul><ul><ul><li>The percentage of Israeli institutional investors investing domestically is significantly lower than abroad, 0.2% vs. 2% </li></ul></ul><ul><ul><li>Solution: </li></ul></ul><ul><ul><li>The State will participate in the investment risk of Israeli institutional investors </li></ul></ul><ul><ul><li>Status: </li></ul></ul><ul><ul><li>The State has a budgetary commitment of about NIS 200 million for this program </li></ul></ul><ul><ul><li>Israeli Institutional Investment </li></ul></ul>Tools 5-8 | Bio-Tech | Early stage capital | Institutional capital | Growing Large Companies
    19. 19. <ul><ul><li>Encouraging high-tech Israeli companies to acquire small Israeli high-tech companies </li></ul></ul><ul><ul><li>Encouraging the creation of clusters </li></ul></ul><ul><ul><li>Allowing the amortization of goodwill for tax purposes </li></ul></ul><ul><ul><li>Promoting M&A activity </li></ul></ul>Tools 5-8 | Bio-Tech | Early stage capital | Institutional capital | Growing Large Companies
    20. 20. <ul><li>The Problem: </li></ul><ul><ul><ul><li>Low rate of Arab minority and Ultra-orthodox employees in the high-tech industries </li></ul></ul></ul><ul><li>Solution: </li></ul><ul><ul><ul><li>Incentives for high-tech employers to employ underrepresented communities </li></ul></ul></ul><ul><li>Description: </li></ul><ul><ul><ul><li>Adjusting the Ministry of Industry’s support programs, which subsidize the cost of salaries for the high-tech industry </li></ul></ul></ul><ul><ul><ul><li>Examining other options to encourage employment via the Chief Scientist’s programs </li></ul></ul></ul><ul><ul><li>Minorities & Industry </li></ul></ul><ul><ul><li>Tools 6-9 | Encouraging Underrepresented Communities | Dual R&D | CIO | Science / Technology Education </li></ul></ul>
    21. 21. <ul><ul><li>The government purchases more than a billion shekels worth of technology and services each year from the high-tech industry </li></ul></ul><ul><ul><li>The CIO will see all the needs of the government, set strategy and work to create standardized tools and infrastructure </li></ul></ul><ul><ul><li>The CIO will have direct responsibility to initiate, lead and operate all horizontal projects for the government </li></ul></ul><ul><ul><li>The CIO will create a supportive environment to promote innovation in Israeli industry </li></ul></ul><ul><ul><li>Appointment of a Government CIO </li></ul></ul><ul><ul><li>Tools 6-9 | Encouraging Underrepresented Communities | Dual R&D | CIO | Science / Technology Education </li></ul></ul>
    22. 22. Strengthening Technological Education Industry Ministry of Finance Ministry of Education <ul><ul><li>Tools 6-9 | Encouraging Underrepresented Communities | Dual R&D | CIO | Science / Technology Education </li></ul></ul>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
    23. 23. Governmental Focus on R & D <ul><li>The Problem: </li></ul><ul><li>No preference or system for integrated national R&D efforts </li></ul><ul><li>The Solution: </li></ul><ul><li>a body responsible for: recommendations for research focus areas, formulating an action plan and coordinating between governmental bodies </li></ul><ul><li>Members of the Body: various government bodies that are in charge of investment in research and development </li></ul>Clean-Tech? Bio-Tech? Homeland Security ? <ul><ul><li>Tools 10-11 | Bringing Back Israeli Scientists | Governmental Focus on R&D </li></ul></ul>
    24. 24. ~ Review <ul><li>Program Highlights </li></ul><ul><li>High-tech Industries </li></ul><ul><li>Strengths </li></ul><ul><li>Signs of Weakness </li></ul>~ The Program <ul><li>Tool box </li></ul>~ Summary ~ Appendices
    25. 26. THANK YOU
    26. 27. ~ Review <ul><li>Program Highlights </li></ul><ul><li>High-tech Industries </li></ul><ul><li>Strengths </li></ul><ul><li>Signs of Weakness </li></ul>~ The Program <ul><li>Tool box </li></ul>~ Summary ~ Appendices
    27. 28. 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. 29. Export of High-tech Industries Average Growth Rate 2004 - 2006 Source: EuroStat , CBS . Developed countries Emerging mar kets
    29. 30. High-Tech Employees by Sub-Branches 2008, thousands Source: Central Bureau of Statistics, Manpower Survey 85% 15%
    30. 31. Source: USPTO . Innovative Patents Registered by Emerging Markets in the U.S. in 2008 ( Patents per million people )
    31. 32. U.S. Patent Applications by Country of Source 2008
    32. 33. Source: CBS. University Degrees by Field of Study 1987-2008
    33. 34. Israeli Requests for Patents in the U.S. From 1995-2008
    34. 35. Students Studying Abroad Vs. Students Studying Domestically, 2002-2007 Source : OECD - education at glance.
    35. 36. Israeli Students in the U.S. After Receiving a Ph.D. (% Staying and Returning) * לפי תוכניותיהם בשנה לאחר קבלת התואר
    36. 37. Forecast in Venture Capital Investment Activity in 2010 Source : NVCA.
    37. 38. 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” <ul><li>According to CBS: </li></ul><ul><ul><li>There are 36 companies with sales greater than $100M </li></ul></ul><ul><ul><li>There are 12 companies which were established after 1992 </li></ul></ul><ul><ul><li>4 companies were established after 1995 </li></ul></ul>Source: IVC. Failure of Large Company Development
    38. 39. Source : Gartner. Expenditure on IT by Sector
    39. 40. <ul><li>THANK YOU </li></ul>

    ×