R&D and Innovation as a Growth Engine – The Israeli Model and the Role of the OCS Ministry of Industry, Trade and Labor ISRAEL Ministry of Industry, Trade and Labor ISRAEL

Some Facts About Our World  Forecast for 2050: 9.4 billion people  900 million people are hungry  33 million people are infected with HIV  1.1 billion people do not have access to clean water  5.1 billion people do not have access to internet  2.75 billion are not using cell phones  Barrel of oil $40 → $147 → $70  Forecast for 2050: 9.4 billion people  900 million people are hungry  33 million people are infected with HIV  1.1 billion people do not have access to clean water  5.1 billion people do not have access to internet  2.75 billion are not using cell phones  Barrel of oil $40 → $147 → $70

And now what?

“ Heavier-than-air flying machines are impossible" Lord Kelvin, 1895

Source: OECD and Israel CBS Expenditure on Civilian R&D as a percent of the GDP in Israel and in OECD Countries Israel Sweden Finland Japan Switzerland Korea Germany Iceland USA Denmark France Belgium Netherlands Austria UK Norway Canada China Australia Brazil New Zealand Italy Russia Spain India Greece If you lie on the ground, you cannot fall … 3.2

Scientists & Technicians per 10,000 Workers

Patents (2008) Israel ranked #1 in Medical Device patents per capita Israel ranked #5 in number of patents per capita Source: The United States Patent and Trademark Office (June 2008)

“ If you want real growth, you have to have new technologies ” Source: Business Week

Evaluating Activities of the OCS Magnet Magneton, Nofar Magnet Magneton, Nofar R&D Fund Tnufa Technological Incubators R&D Centers in Universities R&D Centers in Universities Support of Research Institutes Support of Research Institutes Support of Traditional Industry Support of Traditional Industry Seed Fund Bi-National Agreements Bi-National Agreements EU R&D Program FP-7 EU R&D Program FP-7 Global Enterprise R&D Cooperation Framework Global Enterprise R&D Cooperation Framework US-Israel Science & Technology Commission US-Israel Science & Technology Commission Bi-National Funds Eureka Matimop Chief Scientist Dr. Eli Opper Chief Scientist Dr. Eli Opper Activities in Israel International Activities

Generic R&D Magnet Magneton Competitive R&D Industrial R&D National Pre-Seed Tnufa Nofar Technological Incubators Cooperative R&D Infrastructure for R&D Seed Fund Applied Academic Research Basic R&DMarket Proximity EUREKA! Bi-national Funds ISERD (Europe FP) International OCS Instruments Along The Value Chain Global Enterprises R&D Cooperation Bi-national Agreements Galileo Support of Research Institutes Support of Traditional Industry

International Activities Academia Industry Preferred Sectors BUDGET Quality of Service to the Customer Strategy:

Encouraging Innovation While Embracing Tradition source: The Economist

 2008 Budget – NIS 1,650 M, ~2000 requests per year  Supports competitive R&D of mature companies (SME’s as well as big companies)  Target: establish and develop substantial industrial R&D infrastructure  Grants between 30-50% of R&D plan, royalties payments - obligatory upon success  Acquisition and transfer of knowledge due to special approvals  Budgetary platform for all bilateral parallel agreements  2008 Budget – NIS 1,650 M, ~2000 requests per year  Supports competitive R&D of mature companies (SME’s as well as big companies)  Target: establish and develop substantial industrial R&D infrastructure  Grants between 30-50% of R&D plan, royalties payments - obligatory upon success  Acquisition and transfer of knowledge due to special approvals  Budgetary platform for all bilateral parallel agreements R&D Fund Competitive R&D

Technological Incubators Pre-Seed & Seed R&D  2008 Budget – NIS 175 M  A framework for nascent companies to develop their innovative technological ideas into start- ups that can attract private investors  Suitable facilities for R&D activity & administrative and logistic support to projects  2008 Budget – NIS 175 M  A framework for nascent companies to develop their innovative technological ideas into start- ups that can attract private investors  Suitable facilities for R&D activity & administrative and logistic support to projects 24 Incubators 2 Industrial Incubators 1 Biotechnology incubator 8-10 projects in each Grants- up to 85%

Magnet Generic R&D  2008 Budget – NIS 190 M  Supports consortia of industrial companies and academic institutions.  Target: jointly develop generic, pre competitive technologies or dissemination existing new technologies.  The technology cannot be acquired from commercial sources at competitive prices  Grants of up to 66% - no royalty repayments  Magneton, Nofar, Nataf, Katamon  2008 Budget – NIS 190 M  Supports consortia of industrial companies and academic institutions.  Target: jointly develop generic, pre competitive technologies or dissemination existing new technologies.  The technology cannot be acquired from commercial sources at competitive prices  Grants of up to 66% - no royalty repayments  Magneton, Nofar, Nataf, Katamon

Preferred Sector: Traditional Industry 2006 – 2008: M 180 NIS in 200 projects Strategic consultation Strategic consultation Guidance and evaluation services Guidance and evaluation services

Preferred Sector: Nanotechnology  6 R&D Centers  $278M/5 Years  NOFAR Program  Infrastructure  6 R&D Centers  $278M/5 Years  NOFAR Program  Infrastructure

 Small Enterprises – 520 Projects in R&D Fund  Incubators – 100 projects  MAGNET - 13 Consortia  Magneton – 24 Projects  Nofar – 14 Projects  Katamon – 3 Projects  Nataf – 9 Projects  Small Enterprises – 520 Projects in R&D Fund  Incubators – 100 projects  MAGNET - 13 Consortia  Magneton – 24 Projects  Nofar – 14 Projects  Katamon – 3 Projects  Nataf – 9 Projects Academia Industry

6 Nanotechnology R&D Centers  6 Nanotechnology R&D Centers  4 R&D Institutions  1 Biotechnology R&D Institution  2 R&D Centers: Water, Energy 6 Nanotechnology R&D Centers  6 Nanotechnology R&D Centers  4 R&D Institutions  1 Biotechnology R&D Institution  2 R&D Centers: Water, Energy Academia Industry

Global Network for Transfer of Knowledge

International Cooperation Foundations: BIRDF-with U.S.A. USISTC/F SIIRD-with Singapore CIIRDF - with Canada KORIL-RDF - With S. Korea BRITECH–with the UK

International Cooperation Maryland, Victoria, Ontario France Belgium China Finland Germany Holland Italy India Taiwan Hungary Sweden Portugal Turkey Brazil Argentina Greece Denmark Bi-National Support Agreements : Uruguay

Future Cooperation in R&D Israel and Russia Bi-National Fund Bi-National Support Agreement: Agency (such as MATIMOP) to Agency (such as RUSNANO) or Government to Government Within Multilateral platforms such as Eureka Options:

Total Figures for : International Cooperation source: OCS Data $210M in 520 R&D Projects

Where Technology Meets Creativity

OCS Grants by Technological Sectors 2008

OCS 2009 Some Figures No. Of Applications No. Of Applications: ~2000 Projects Requested Budget: ~6.7 Billion NIS Total Grants: Total Grants: ~1.75 Billion NIS

GOING TO THE FUTURE

Other: 5% Communications: 33% Software: 8% Chemicals: 4% Electro-Optics: 7% Electronics: 15% Life Sciences: 28% OCS Grants by Technological Sectors - Forecast Bio? Nano? High-end Industry? Converging Technologies? Energy/Water/ Environment?

There is always room also for the small ones

Excellence is a Key Success Factor