dr. eli opper – chief scientist ministry of industry, trade and labor early stage financing...

Dr. Eli Opper – Chief ScientistDr. Eli Opper – Chief Scientist

Ministry of Industry, Trade and Labor Ministry of Industry, Trade and Labor

Early Stage Financing Strategies Early Stage Financing Strategies for High Tech in Israelfor High Tech in Israel

January 2005January 2005

We think we know the past

We hope we understand the present

We must plan for the future

"There is no reason for any individual to have a computer in his home."

Ken Olsen, Founder and CEO of Digital Equipment Corporation, 1977

We think we know the past

We hope we understand the present

We must plan for the future

“Heavier-than-air flying machines are impossible" 

Lord Kelvin, 1895

We think we know the past

We hope we understand the present

We must plan for the future

“640 K Ought to be enough for anybody "

Bill Gates, 1981

“It’s not the strongest of the

species that survives, nor the

most intelligent; it is the one

that is most adaptable to

change” Charles Darwin

Jaffa Oranges vs. SoftwareJaffa Oranges vs. Software(1992-2001)(1992-2001)

0

500

1000

1500

2000

2500

3000

3500

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

exports ($millions) Citrus

Software

Source: Ministry of finance

Expenditure on Civilian R&D as a percent of theGDP in Israel and in OECD Countries

(2002)4.2

3.63.23.0

2.72.42.4 2.32.2 2.12.02.01.91.81.61.6 1.6

1.4 1.41.31.11.0 0.90.8 0.70.7

0

1

2

3

4

5

Isra

el

Sweden

Finla

nd

Japan

Switzer

land

Korea

Germ

any

Icel

andUSA

Denm

ark

France

Belgiu

m

Nether

lands

Austria UK

Norway

Canad

a

Irela

nd

Austra

lia

Czech

Rep

ublic

New Z

elan

dIta

ly

Spain

Portugal

Greec

e

Slova

k Rep

ublic

0

500

1000

1500

2000

2500

3000

3500

1999 2000 2001 2002 2003 2004 E

Capital Raised By Israeli High-Tech Capital Raised By Israeli High-Tech Companies:Companies: 1999-2004 (in Million $)1999-2004 (in Million $)

Source: IVC – Israel Venture Capital

6.04

6.17

6.37

6.37

6.58

6.77

6.89

6.92

7.10

7.82

7.17

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00

Norway

Belgium

Sweden

Austria

Canada

Switzerland

Israel

U.S.A

Singapore

Iceland

Finland

Source: IMD World Competitiveness Yearbook 2004

Knowledge Transfer (Universities - Industry)

Innovation = Economic Innovation = Economic GrowthGrowth

“If you want real growth, you

have to have new technologies”

Source: Business Week

Where does Israel Where does Israel excel?excel?

BiotechnologyBiotechnology Encryption and Encryption and

data security data security SoftwareSoftware ElectronicsElectronics Agro-technologyAgro-technology

TelecommunicatioTelecommunicationn

Medical equipmentMedical equipment OpticsOptics InternetInternet NanotechnologyNanotechnology

Chief ScientistDr. Eli Opper

Activities in Israel International Activities

R&D Fund Bi-National Funds

Magnet Programs U.S-Israel Science & Technology Commission

Tnufa BI-National Agreements

Technological Incubators EUREKA

Seed FundEuropean Union Programs

FP-6

Activities of the O.C.S.Activities of the O.C.S.

Generic R&D

Research Institutes

Chief ScientistDr. Eli Opper

Activities in Israel

Tnufa

Technological Incubators

Seed Fund

Activities of the O.C.S. –Activities of the O.C.S. –Early StageEarly Stage

OCS 2004 - Some FiguresOCS 2004 - Some Figures

No. Of Applications:No. Of Applications: ~~1700 Projects1700 Projects

Total Request:Total Request: ~~ 6.2 Billion N.I.S6.2 Billion N.I.S

Total Grants:Total Grants: ~~1.3 Billion N.I.S1.3 Billion N.I.S

OCS Grants by Technological SectorsOCS Grants by Technological Sectors

Other: 4%

Communications:

36.5%Software:

17.3%

Chemicals: 2.6%

Electro-Optics: 8.1%

Electronics: 9.1%Life Sciences:

22%

0320

OCS Grants by Technological SectorsOCS Grants by Technological Sectors

Other: 7.8%

Communications:

37.4%Software:

12%

Chemicals: 1.9%

Electro-Optics:

7%

Electronics: 11.4%Life Sciences:

22.8%

0420

Nano-Tech?

Other: 4%

Communications:

36.5%Software:

17.3%

Chemicals: 2.6%

Electro-Optics: 8.1%

Electronics: 9.1%Life Sciences:

22%

OCS Grants by Technological Sectors - ForecastOCS Grants by Technological Sectors - Forecast

013456789020 1234

International CooperationInternational Cooperation

Ministry of Industry, Trade & Labor - The Office of the Chief ScientistMinistry of Industry, Trade & Labor - The Office of the Chief Scientist

Bi-National FundsBi-National FundsBi-National FundsBi-National Funds

BIRDF-with U.S.A.BIRDF-with U.S.A.

USISTC/FUSISTC/F

SIIRD-with SingaporeSIIRD-with Singapore

CIIRDF - with CanadaCIIRDF - with Canada

BRITECH–with the UKBRITECH–with the UK

KORIL-RDF - With S. KoreaKORIL-RDF - With S. Korea

Int’l CorporationInt’l CorporationInt’l CorporationInt’l Corporation

FranceFrance

BelgiumBelgium

ChinaChina

FinlandFinland

GermanyGermany

HollandHolland

Hong-KongHong-Kong

ItalyItaly

IndiaIndia

TaiwanTaiwan

PortugalPortugal

SpainSpain

SwedeSwedenn

Bi-National Support Bi-National Support AgreementsAgreementsBi-National Support Bi-National Support AgreementsAgreements

Int’l CorporationInt’l CorporationInt’l CorporationInt’l Corporation

EUREKAEUREKA

The European FP6The European FP6

Multi-National Multi-National AgreementsAgreementsMulti-National Multi-National AgreementsAgreements

Int’l CorporationInt’l CorporationInt’l CorporationInt’l Corporation

Global EnterprisesGlobal EnterprisesCountriesCountries

StatesStates ProvincesProvinces

MunicipalitiesMunicipalities

Multi Multi National National

?

Change of FocusPartners for International CooperationPartners for International Cooperation

Strategic Agreement

Joint R&D Project

The two companies should have the combined, proven capability and infrastructure to define, develop, manufacture, sell and support the Product defined by the Project.

OCS support

Finance 50% of the Israeli company’s R&D approved costs.

OCS MNC

Israeli

Com

pany

The Global Enterprise R&D The Global Enterprise R&D Cooperation InitiativeCooperation Initiative

There is always room also for the small onesThere is always room also for the small ones

Before…

Global Network for Transfer of KnowledgeGlobal Network for Transfer of Knowledge

The Law For Encouragement The Law For Encouragement of Industrial R&Dof Industrial R&D

Transfer of Know-HowTransfer of Know-How

Exchange of KnowledgeExchange of Knowledge

Promote the Promote the EstablishmentEstablishment of Development of Development CentersCenters

Biotechnology

Nanotechnology

Preferred SectorsPreferred Sectors

Major Questions (Dilemmas)Major Questions (Dilemmas)

1. Should the Government take a more active role?

2. Should preference be given to certain sectors? (Targeting)

3. Should the O.C.S be more involved in Higher Education, Marketing & Management issues with respect to Industrial R&D?

4. Should Academia and Industry Strengthen their cooperation ?

Some AnswersSome Answers

1. The Government should take an active role in the TARGETING Policy.

2. The Government is not an investment group: it must maintain a long - range perspective.

3. Academia & Industry must strengthen their cooperation.

Some AnswersSome Answers

4. Israel will continue to focus on high potential areas like ICT, and Life Sciences, including Nano – Tech.

5. Increasing involvement in Education, Marketing and Management.

Export from IsraelExport from Israel(forecast)(forecast)

0

500

1000

1500

2000

2500

3000

3500

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

exports ($millions) Citrus

Software

?

25

Excellence is a Key Success Factor