The Process of Foundation is Complete

| 01.06.18

The law on the basis of which the Innovation Authority was established was authorized by the Knesset in August 2015*, however the Authority itself only commenced operation at the beginning of 2017.

As is known, the Authority was set up on the basis of the Office of the Chief Scientist in the Ministry of Economy and Industry. The objective was to optimally fulfill the missions assigned to it by the R&D Law and to provide efficient and high-quality service to the Israeli innovation system. In order to do so, the Authority operates with a structure of Innovation Divisions (see Diagram 1) that allocate a cumulative budget of approximately NIS 1.6 billion each year. The Authority supports companies at all stages of their life and in all innovation sectors via a range of programs (see Diagram 2).

Innovation Authority Structure

The Authority’s workforce grew this year to approximately 120 employees, and approximately 10 more are expected to join us in the various units in coming months (see Diagram 3). In addition, senior positions in the authority were filled during this last year including the Authority CEO Aharon Aharon. Furthermore, the Authority operates a team of approximately 180 technological evaluators responsible for evaluating the requests submitted to the Authority and for presenting a professional assessment to the different research committees.

Main Activities During the Past Year

The Authority Council, the body responsible for supervision of the Authority’s operations and for outlining its direction, has thus far authorized 4 new support programs in addition to those that were transferred from the Chief Scientist’s Bureau to the Innovation Authority: Innovation Laboratories and a Biotechnology Incubator within the framework of the Startup Division, ‘Coding Bootcamps’ under the Societal Challenges Division, and a Multinational Corporations’ R&D Centers Program under the auspices of the Growth Division.

The objective of the Innovation Laboratories Program is to encourage industrial corporations, with an emphasis on those engaged in advanced manufacturing, to cooperate with technology entrepreneurs as leverage for growth and for the formation of a strategy for the future. This is done via participation in financing the establishment of a unique technological infrastructure and the laboratory’s ongoing operation. The laboratories will operate according to a model of open innovation that constitutes a necessary tool for companies’ development in the digital era and for their adaptation to sophisticated and constantly developing markets. The initial competitive procedure concluded in July, during which five franchisees were selected: in fields of smart infrastructures (Shikun&Binui and ENEL), a smart factory (Ham-Let), food (Frutarom), urban transport (Renault-Nissan) and smart materials (Merck Performance Materials and Flex).
The Coding Bootcamps program, that was initiated as part of the national program for increasing the supply of skilled personnel to the high-tech industry, is intended for players seeking to establish or expand extra-academic training programs for coding studies. Details of this program can be found in the chapter dealing with human capital challenges in this report.
The Multinational Corporations’ R&D Centers program is a trial program aimed at enabling multinational corporations in the biotechnology and medicine fields to establish or expand R&D, innovation or manufacturing activities in the State of Israel. The program utilizes the changes being made in the tax regimen of high-tech companies in order to expand their economic activity in Israel. Details of this program can be found in the chapter dealing with multinational corporations’ R&D centers in this report.
In addition, the Authority recently presented its strategy for the coming years before the Authority Council. A summary of the strategy can be found as a separate chapter in this report. The steps detailed all express the transition made by the Innovation Authority this year, from inception to execution.

Innovation Authority Activity: In Practice

Via the different programs it operates, the Innovation Authority supports many technology companies at different stages of their development and in a variety of fields. The following examples represent the fruits of the Authority’s investment in Israeli industry:

  • Yotpo’s Accelerated Growth: Yotpo was founded in 2011 and began in the Innovation Authority’s Technological Incubators Program. The company develops marketing platforms for online businesses that make use of user content. Following a trend of accelerated growth, Yotpo currently serves 140 million clients each month, and is proud to collaborate with Google, Instagram, Facebook and Pinterest. In 2016, the company raised USD 22 million in a Round C cycle and declared its intention to use this sum in order to expand its operations to several branches worldwide and to examine possibilities for acquiring other companies.
  • Valtech’s Large Exit: The medical device company Valtech was founded in 2005 and also initially began operation in the Authority’s Incubators Program. The company develops advanced technologies that enable the repair and replacement of heart valves via catheterization without the need for open heart surgery. In 2016, Valtech was purchased by the American medical device giant Edwards Lifesciences for the sum of USD 1 billion, after total investment in the company until that stage of only USD 70 million.
  • Allium Medical’s International Collaboration: The Allium Medical Company develops, manufactures and markets minimally invasive medical devices for a range of applications. The company, that was founded in 2001 and registered on the Tel Aviv Stock Exchange in 2007, has enjoyed the support of the Innovation Authority since its inception via several programs. In 2014, Allium Medical signed an agreement with the National University of Singapore (NUS) and its leading researchers to develop and commercialize a unique minimally invasive product for treating Stage 2 Diabetes and obesity. The development and commercialization project was supported to the extent of approximately 50 percent of its cost by the bi-national Singapore-Israel Fund (SIIRD), operating under the auspices of the Innovation Authority for the advancement of R&D cooperation between the two countries. The project is currently in its final stages of development and is expected to progress to the human clinical trials stage at the end of 2017.

More posts that may interest you