About the Israel Innovation Authority

The State of Israel considers innovation to be a valuable resource and a necessary element for ensuring the economic prosperity of the Israeli economy. The Innovation Authority is an independent statutory authority charged with promoting innovation as a lever for inclusive and sustainable economic growth in Israel. In more detail, the Authority’s tasks are to preserve and strengthen Israel’s technological leadership and entrepreneurial culture, and to increase the economic value these bring to the Israeli economy, by contributing to output and exports, by creating quality employment, and by preserving the State of Israel’s place at the forefront of global innovation.
The Authority formulates a policy for the realization of the mission and carries it out through support tracks and diverse funding and assistance tools. In addition, the authority advises the government and the Knesset committees regarding innovation policy in Israel, monitors and analyzes the changes in the technological innovation environment in Israel and abroad, and creates collaborations with other authorized authorities around the world to help promote technological innovation in industry and the Israeli economy.

Establishment of the Authority:

In the mid-1980s, the structure of the Office of the Chief Scientist was redesigned and anchored within the law to encourage research, development and technological innovation in industry , 1984. The design of the structure based on the R&D law was intended to harness the scientific tools to deal with the national tasks that Israel faced at that time – absorbing mass immigration and an economic crisis. The Office of the Chief Scientist was able to identify five key challenges those facing the knowledge-rich industry and to develop appropriate answers for them: support for competitive R&D as a tool for the growth of a high-tech industry; Establishing initiative funds as a tool to create a venture capital market; Establishing the incubators as a tool to create a sufficient flow of innovative ventures; Encouraging collaborations between academia and industry through magnet programs; and opening up international markets to Israeli companies. The scientist’s tools that were designed at the time were innovative on a global level and helped catapult Israeli industry to the forefront of global technology.

This R&D policy was more successful than expected: an independent and vital knowledge-rich industry was created in Israel, and a vibrant entrepreneurial culture developed in it. The activities of the Chief Scientist’s Office succeeded in supporting the development of the Israeli economy into a modern economy led by knowledge-rich industries. The high-tech industry which has its roots in the defense industries has become an industry in which the information and communication technologies (ICT) branch is central. Alongside this, today it is possible to see sprouts of other branches such as life sciences and transportation. Israel is known worldwide as an innovative and leading country, with the weight of the business sector within this expenditure being the highest in -OECD. Israel is even ranked first in the world in venture capital investments as a percentage of GDP, and is a center of attraction for over 300 leading multinational companies that have established R&D and innovation centers there in recent decades. 

Besides these achievements, in recent years, new challenges have begun to arise before the Israeli economy, which required a reorganization of the innovation policy in Israel. First of all, the high-tech industry has indeed produced a circle of high-quality and high-paying employment over the years, but in the last decade its weight in employment in Israel has not increased. Second, the productivity gaps of most of the industrial and service branches in Israel compared to other developed countries indicate that the innovation in the high-tech industry does not penetrate sufficiently into other branches and is not assimilated into them. At the same time, global competition for technological leadership is increasing, and governments in other countries are accelerating their investment in innovation. Faced with these challenges, the understanding that the same tools of the 1990s cannot be used in the face of new and complex tasks has permeated. 

The accomplishment of the historical task of establishing a prosperous high-tech industry on the one hand, and on the other hand the rise of new challenges facing the Israeli economy, led to the revision of the mission of the Office of the Chief Scientist and subsequently to its structural change. In early 2016, the Office of the Chief Scientist became an independent authority – the National Authority for Technological Innovation. The Authority is replacing the Office of the Chief Scientist in the Ministry of Economy and the government association from the Israel Research and Development Center (Israel Industry Center for Research and Development), by virtue of Amendment No. 7 to the Law on the Encouragement of Research, Development and Technological Innovation in Industry. In order to act to fulfill the new mission, the Authority moved to a new organizational structure of innovation divisions , which ensures a better connection with the industry, a deeper specialization in different types of companies and a focus on tasks that serve different populations of customers.

The structural and institutional change even translates into the streamlining of the Authority’s operating mechanisms, so that the tools can be adapted to the changing needs of industry and the economy and simplify bureaucratic processes. Until the establishment of the Authority, grants for research and development were awarded by the chief scientist at the Ministry of Economy, when the terms of the grants, such as the obligation to pay royalties, their rate, the limitations on the transfer of knowledge or the transfer of production abroad, etc., were determined by law or regulations. As a result, any change in the terms of the grants requires legislative amendments. Thus, for example, when the chief scientist wanted to allow knowledge to be taken abroad in exchange for replacement knowledge to be transferred to Israel, this required an amendment to the law made in 2005. Experience shows that many companies were reluctant in the past to accept the scientist’s support and preferred other alternatives, due to a cumbersome mechanism that was It involves the management of the grants, the lack of flexibility in the terms of the grants, and more. The State of Israel recognized these difficulties and limitations and tried to solve them through the establishment of the Innovation Authority. One of the main objectives behind the amendment to the law is the transfer of the authority to determine the terms of the grants to the authority’s council, through the creation of different benefit paths and the determination of their terms. This change is intended to allow the Authority to operate with greater flexibility and to make changes and adjustments to the conditions of the grants as needed.

Organizational structure:

Dr. Ami Applebaum is the head of the Innovation Authority, and he chairs the authority’s board of directors, which consists of eight members, including three representatives from the industry who act as public representatives. Dror Bin, former CEO of RAD, is the CEO of the Innovation Authority.

The authority is organized in the structure of innovation divisions. These divisions are mission- and customer-oriented, and include unique “toolboxes” that offer an adapted, inclusive and comprehensive response to the changing needs of their customers: a high-tech entrepreneur at the beginning, a mature company developing new products or production processes, an academic research group seeking to turn a discovery into a product, a company A foreign multinational giant that wants to cooperate with local companies, an Israeli company that is looking for new markets abroad, a veteran factory owner in the fields of advanced manufacturing that strives to harness innovation to the growth engines of his factory, and more.

The operational divisions of the Innovation Authority are:

  • Innovation Infrastructure Division – supports research infrastructures, breakthrough technologies and bridges between academia
  • Startup Division – helps entrepreneurs at the beginning of their steps to develop a new technological idea into a product and proceed to recruitment stages
  • Growth and Advanced Manufacturing Division – helps young and mature companies to grow through technological innovation. In addition, it supports technological solutions for social and public purposes and works to increase and diversify the supply of knowledge-rich human capital in the Israeli innovation system.
  • International Collaborations Division – helps Israeli companies to break into international markets, by financing R&D collaborations with foreign companies.
  • ISERD – the Israeli directorate for European R&D, supports the participation of Israeli companies in framework programs of the European Union.