Pilot Program in Government Companies

Ministry of Finance’s Government Companies Authority and the Israel Innovation Authority Launch New NIS 10 Million Industrial Pilot Program 

[Tel Aviv, June 5th, 2018] Israel’s Government Companies Authority in the Ministry of Finance and the Israel Innovation Authority launched a new program this week to promote technological innovation by supporting pilot programs for tech companies to test and implement innovative technologies within government companies.

The program will include support for developing innovative solutions and pilot programs to integrate such solutions into government companies in order to streamline their economic activity and improve business performance.

Israeli Minister of Finance, Moshe Kahlon, said: “The program offers one more incentive for government companies to enter the digital age. Together with existing innovation frameworks, this will enable governmental companies to improve performance and offer greater access and better service to the public.”

Israeli Minister of Economy and Industry, Eli Cohen, said: “Support for the establishment of pilot programs and their implementation in government companies will help develop new and growing innovative systems in areas of the economy where access necessitates cooperation between private tech companies and government infrastructure. This comes alongside a government decision to inject innovation into governmental companies and invest in new technologies in their core area, and to remove barriers faced by governmental companies when adopting these technologies.”

The goal of the program is to develop and test technologies and innovative solutions through pilots in relevant government companies, or alternatively, to utilize data or information held by government companies. 

The pilot program is intended for Israeli technology companies (non-governmental) which will conduct their projects within the government companies. The companies will receive financial support of 20%-50% of their approved R&D expenditure – which can even reach up to 60% if projects have the potential to significantly streamline the activities of a given governmental company.

The pilot program will enable companies to make significant advances in commercialization of a product and to promote market penetration via implementation at the test site. It also offers partial financing to offset the risks involved in R&D, without a stake in future profits or successes. Companies will return their grants to the Israel Innovation Authority via royalties from sales, but only if an initiative has been commercialized.

Criteria for submission: level of technological innovation and uniqueness of a pilot, level of difficulty, a company’s capabilities including management’s ability to bring a program to commercial fruition, growth potential of a company following a successfully-implemented pilot, the program’s potential influence on streamlining the economic activity of a government company, the overall technological and operational potential for the Israeli economy, potential influence of the pilot for streamlining business operations and service levels of a governmental company, synergy between the pilot and the government company, and the benefits the company will derive from the pilot in a commercial/market perspective.

Chief Scientist of the Israel Ministry of Economy and Industry and Chairman of the Israel Innovation Authority, Dr. Ami Appelbaum, said: “We put great efforts into promoting and launching new programs such as this with the knowledge that investment in innovation is the key to sustainable economic growth and creating productivity and value for the economy. The Government Companies Authority has access to infrastructure and information that is not accessible to hi-tech companies in their respective fields which can be extremely valuable when developing and implementing new solutions. Such access can help growth-stage companies develop their products and innovations.”

CEO of the Israel Innovation Authority, Aharon Aharon, said: “We believe that through this pilot program, we can achieve two goals: Technology companies will be given access to large-scale pilots and government companies will be given an opportunity to upgrade their systems and, as a result, their entire performance through access to some of the most advanced technology in the world. We are opening the door for technology companies to conduct experiments they could not otherwise undertake and are creating future opportunities for implementing new forms of innovative regulation for the entire Israeli economy.”

Head of the Government Companies Authority, Yaakov Quint, said: “The program is the result of outstanding cooperation between the Government Companies Authority and the Israel Innovation Authority, and serves both organizations’ goals. The program is another tier in the innovation project we have been promoting for government companies. It was preceded by a call to such companies to allocate resources to implement innovation. Many governmental companies have answered this call, and we continue to guide them in their implementation. In addition, a government resolution was recently passed removing regulatory obstacles unique to government companies which have made it more difficult for them to integrate technological innovation as businesses must.”