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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
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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
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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
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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
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“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
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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
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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
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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
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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)
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Innovation = Economic Innovation = Economic GrowthGrowth
“If you want real growth, you
have to have new technologies”
Source: Business Week
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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
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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
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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
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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
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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
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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
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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
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International CooperationInternational Cooperation
Ministry of Industry, Trade & Labor - The Office of the Chief ScientistMinistry of Industry, Trade & Labor - The Office of the Chief Scientist
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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
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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
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EUREKAEUREKA
The European FP6The European FP6
Multi-National Multi-National AgreementsAgreementsMulti-National Multi-National AgreementsAgreements
Int’l CorporationInt’l CorporationInt’l CorporationInt’l Corporation
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Global EnterprisesGlobal EnterprisesCountriesCountries
StatesStates ProvincesProvinces
MunicipalitiesMunicipalities
Multi Multi National National
?
Change of FocusPartners for International CooperationPartners for International Cooperation
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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
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There is always room also for the small onesThere is always room also for the small ones
Before…
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Global Network for Transfer of KnowledgeGlobal Network for Transfer of Knowledge
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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
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Biotechnology
Nanotechnology
Preferred SectorsPreferred Sectors
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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 ?
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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.
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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.
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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
?
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25
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Excellence is a Key Success Factor