Transcript MATIMOP Proactive Access to Funding

Leveraging R&D Collaboration to
Foster Economic Growth
Michel Hivert
April 2013
Israel at Glance
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Population: 7.8 million
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Area: 22,145 sq.km
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GDP 2011: $243b, per capita: $30.2K
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2010: +4.8%, 2011: +4.7%, 2012E: +2.9%, 2013E: +3.3%
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High-Tech exports: 2010: $44b, 2011: +4.3%, 2012E: +3%
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Inflation: 2011: 2.2%, 2012E: 2.2%
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Unemployment: 2011: 6.1%, H1/2012: 7.2%
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OECD: 2010 full membership
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Nobel prize: 10 winners, 6 in science, 2 in economics
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DP 2011 rate of growth - global comparison: OECD member average:
1.9%, US: +1.7%, Japan: +0.3%, Germany: +3.0%, France: +1.6%
China+ 9.3%, India: +7.7%
Source: MOF, Bank of Israel, Israeli Central Bureau of Statistics, The World Bank
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“Innovation is the central issue in
economic prosperity”
(Michael Porter)
Employment
Growth
Innovation / R&D
Branding
Israel is a global leader in
research and innovation
Quality of Scientific Research
Israel
Level of innovation
Source: World economic forum, 2011
Expenditure on R&D
As % of GDP, 2008, or latest available year
5%
Israel is ranked
1st of all OECD countries by expenditure on R&D (research & development)
4%
4%
as a percentage of GDP (4.27 %), demonstrating innovation, development and creativity.
3%
3%
2%
2%
1%
1%
0%
Source: OECD
2.28%
4.27%
15 Years of Venture Capital Activity at a Glance
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$20 billion invested in the VC sector
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$14 billion raised by Israeli VC funds
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M&A: $28 billion, IPO: $6 billion
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More than 5,000 startups established
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NASDAQ: 100 Israeli high-tech companies are listed
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Main contributor to the economy, GDP, export, employment
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Human capital emerged as Israel’s main resource
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Global recognition achieved as an innovative technology center
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Source IVC 2012
The Importance of High-Tech to Israel
Main contributions to the economy
 40% of GDP annual growth
 50% of industrial exports
 40% of VC investments ends as tax revenue, direct and indirect each US dollar
invested in R&D contributes 6 US dollars to industrial product
Most new employment comes from new small businesses
 3:1 ratio of direct and indirect employees to engineers
 employment growth rate is double that of the rest of the economy
Suited to Israeli business culture
 entrepreneurial culture – creative, persistent, innovative, must win attitude
 large number of entrepreneurs and engineers per capital
 using limited resources cost effectively
Magnet of attraction to foreign investors
Second only to the US
 Roosevelt Island University project, NY, $2 billion investment, new technology center
12/11 won by Israel Technion and Cornell University
Source: IVC 2012
Growth Engine of the Economy
Periods of research and innovation (typical)
Fundamental
research
Basic technology
research
Applied technology
research
Ideas, concepts
Pioneer
Basic & generic
Application
Undefined
5-10 years
2-5 years
Go to Market
Public/Private
Funding ratio
Patents
Time-to-Market
ideas &
concepts
Devices &
systems
<2 years
Deliver
to market
The innovation
ecosystem is complex
High skilled workers
Researchers
Entrepreneurs
Funds
Research
Facilities
Industry
IP Protection
Laws
Government plays a key role in
optimizing the ecosystem especially
in small countries
Infrastructure
Risk sharing
Social goals
Government should enable and nurture
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Actively encourage constant
development of the ecosystem
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Provide conditions for continuous
growth of companies
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But! It is not government’s role to
replace the private sector nor to
predict the “next big thing”
Market Pull versus Knowledge push
Knowledge creation
Exploring new Ideas,
Time frame 5-10 y
Development :Incubators
and Consortia between
Academia and Industries
Time frame 1-4 y
Go to Market
Under Industry Lead
Time frame < 1 y
PROGRAMING
Advanced materials
Societal
Challenge
Tyres
Nanopowder
for batteries
Microelectronics
Power MOSFET
Nanotechnologies
Sensor
Photonics
Led’s
Biotechnologies
Lotus effect windscreen
Combining several
Enabling Technologies
for advanced products
There are many paths between
an idea and a product…
A single
company
Start-up
Bi/multi
national
cooperation
Basic
research
Product
development
Societal challenge
Funding
Consortium of
Companies
OCS Government Support Programs
Pre-Seed
Generic R&D
Competitive R&D
Tnufa
Magnet
Technological
Incubators
Industrial
D&R
Magneton
Nofar
Long-Range
R&D
Cooperative R&D
Seed Fund
International
Bi-national Funds
Applied Academic
Research
Bi-national Agreements
(Europe FP)
Galileo
Global Enterprises
R&D Cooperation
Basic R&D
Market Proximity
Israeli Government Support
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Average project budget: 1 million Nis per year
Government support: Up to 50%
Support duration: 1 year
Annual Government support for International
R&D projects: $100 million
Funding Rules:
Grants - scale from 20% - 50% of the
approved budget + regional incentives
Conditional Grant: Royalty payments 3% - 5%
of the future product sales
The Office of the Chief Scientist (OCS)
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Established – 1975 and since 1985 working
according to “The encouragement of Industrial
R&D Law”
Budget for 2012: $407 M
For international activities an additional budget
of $100M is allocated
Project Selection Procedures
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Submission by Applicants through online form (internet) –
includes application form and budget (excel)
Evaluation
 Head of Sector nominates an evaluator
 Evaluator conducts on-site evaluation
 Evaluator submits report to the Head of Sector
 Final report submitted to the Research Committee
Decision by Research Committee
Options: Approval, Rejection, Further Hearing
Monitoring
Final Audit
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Project Evaluation Possibilities
One or twostage
evaluation?
• At the OCS - one
stage submission.
A single
(rare) or a
group of
evaluators
(common) Peer Review
• At the OCS –
always two
evaluators
Site visit or
remote
evaluation
• At the OCS - a site
visit is mandatory
Committee
decision or a
priority list “automatic”
process
• At the OCS
decisions are
made by a very
active Research
Committee
Criteria for Evaluation
Grading from 1-5( 1 – not recommended…..3 – Average…5 – highly recommended
Section Head
Tech. evaluator
Reasons
Grade
Reasons
Grade
Criteria
Technological
Aspects
Economic
Aspects
Company
Capability
Quality of cooperation in
bilateral
project
Clarity and
Supporting
Data
Total Grade
The Research Committee
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A statutory body, 9 members headed by the Chief
Scientist, including representatives of the Ministry of
Industry, Trade &Labor (3), Ministry of Finance (2) and
representatives of the public (3) appointed by the
ministers
Main function of the Research Committee:
- To decide about the grant [approval, prescribing
conditions for the approval, budget and extent of the
state contribution ( 30%, 40% or 50%) ]
Evaluation of Industrial R&D Projects
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Although all R&D projects face time pressure, it is
obvious that timely/quick evaluation is crucial and
extremely important for industrial R&D
A reasonable, quick response is mandatory
According to our procedure, the Evaluator must
submit the report within 42 days and the Section
Head within a week
The decision will be announced up to 4 months
from submission day
Day 1
Project Submission/
Evaluation Begins
Day 42
Report Submission by
Evaluator
Day 50
Report Submission by
Section Head
Month 4
Decision
Announced
Magnet-Generic R&D
2012 Budget – 47M$.
 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.
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Technological Incubators Pre-Seed & Seed R&D
2012 Budget – 47M$
 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
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24 Incubators
2 Industrial Incubators
1 Biotechnology incubator
8-10 projects in each
incubator
Grants- up to 85%
OCS Grants by Technological Sectors, 2012
Israel - A Global Leader in Water Innovation
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Leadership born out of real need
Water is a national priority since Israel’s inception
 Geography (arid land) & climate never worked in our favor
 “Make the dessert bloom” is a central theme in Israel’s culture
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Leading by example
Improved efficiency and innovation keeps water consumption
steady despite immense growth in population
 Israel reclaims almost 75% of its reused effluents for agriculture
 By 2013 desalination plants in Israel will supply more than 500
million m3 of water per year, supplying 35% of the country’s fresh
water needs
 Hadera seawater reverse osmosis desalination plant is one of the
largest in the world
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Israel - A Global Leader in Water Innovation
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Israeli water industry recognized as a global superpower
Over 200 companies exporting water technologies
 Export of over $2B annually, estimated to grow to $2.7B in 2014
 The main export destination is the US, followed by Germany, Italy,
Spain, Australia, France, India, Mexico, China, and Turkey
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Areas of expertise of Israeli water industry
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Water management
Water for agriculture including drip irrigation
Water treatment
Desalination
Water safety and security
Water IT and Communications
How Does MATIMOP Assist Industry?
Partner-Matching: Assists Israeli and foreign industries in
locating partners for industrial R&D projects
 Serves as a gateway to international high-tech industries
 Extends platforms for cooperation
 Implements national R&D support programs
 Provides access to national funding schemes
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MATIMOP’s Database –
4000 Israeli companies and R&D capabilities Website
www.matimop.org.il
International Collaboration in Industrial R&D
Europe
North America
New York
Massachusetts
Maryland
Virginia
Wisconsin
Colorado
Illinois
Oregon
BIRD(Foundation)
Canada-Israel I
Ontario
CIIRDF(Foundation)
Latin America
Mexico (Water)
Argentina
Uruguay
Brazil
France
Russia (Rusano, Skolkovo)
Italy
Germany
Greece
China(Most)
Denmark
Jiangsu, Guandong, Shandong
Hungary
Shanghai, Shenzen
Turkey
Portugal
India (Most)
Finland
Sweden
Karnataka
Czech Republic
Bulgaria(New)
SIIRD-Singapore (Foundation)
Lithuania (New)
Slovenia
KORIL-RDF-Korea (Foundation)
Ireland
Belgium (Flandria)
Netherlands
Cyprus
Australia (Victoria)
Asia
* Through EUREKA (40 country Multilateral Initiative)
Bilateral Projects
Firm A
Firm B
Co - investment
Governance Domain
Follow-on (“go-to-market”) funding
“follow-on” Domain
Application Process
An optimal tool for a bi-lateral program administration
BIRD – Performance Summary
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$290M granted
825 projects
approved
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$91M repayments
from projects
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~$8B
in sales
generated directly and
indirectly by BIRD
sponsored activities
August 2011
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Korea-Israel Industrial R&D Foundation
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KORIL-RDF was incorporated in 2001 as a
collaboration between the Korean Ministry of
Knowledge Economy (MKE) and the Israeli Ministry
of Industry, Trade & Labor (MOITAL)
The Foundation currently has an annual budget of
US$ 3M designated for direct support of jointventure commercial R&D .
KORIL-RDF is mandated to promote the most
innovative and entrepreneurial industrial R&D.
121 Projects totaling over US$ 30 M have been
approved to date in diverse technological sectors.
Singapore – Israel Industrial R&D Foundation
Co-operation between
Singapore’s EDB (Economic
Development Board) &
Israel’s OCS since 1997
Now at fifth phase: US$9
million (for 3 years)
Total research investment of
US$122 million and
employment of 1,630
research scientists and
engineers
As of December 2012 a total of 114 projects approved
MULTINATIONAL ENTERPISES
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Global companies reach beyond the national
limitations of governments .
Co-ordinate production and R&D across many
countries and shift activities upon demand and cost .
Take advantage of profitable opportunities in foreign
markets by setting subsidiaries and affiliate.
Host countries count for a growing part of turnover,
value added, employment and R&D services.
SME face new challenges and opportunities .
Multinational Corporations are highly Influential on small
economies and markets
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Foreign Companies Invested in Israel –
Some Examples
US
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Microsoft
Epix
AOL Time Warner
Intel
IBM
Perrigo
Cisco Systems
GE Healthcare
Lucent
3Com
Hewlett Packard
Stryker
Motorola
Sun Microsystems
Johnson & Johnson
Dentsply
Kodak
Europe
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British Telecom
SAP
Philips Medical
Alcatel
Siemens
Cable & Wireless
Deutsche Telekom
Telecom Italia
Generali
Nestle
L’Oreal
Danone
Unilever
Vilmorin
Veolia
Ferring
MERCK Serono
Asia
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Sony
Toyo Ink
Fuji
Honda
Sumitomo Trading
Nomura
Samsung Electronics
Daewoo
LG Group
Hyundai
Acer Computers
Macronix
Winbond
Hutchison Telecomm
Scigen
Jain Irrigation
Sun Pharmaceutical
Multinationals - Success Stories
7,700 employees, first R&D center outside the US, 4 R&D centers, 2
manufacturing centers
Developed: Pentuim, Centrino, Core 2 Duo, acquisitions – more than
$2b, investment in Israel $7.3b
500 employees, R&D strategic centers, acquisitions over $700m in
2007-2011, support center for startups, first R&D center outside US
400 employees, 2 R&D centers, support center for startups
2011 - First R&D center outside US, first acquisition: $390m, Anobit
400 employees, 4 R&D centers, support center for startups,
acquisitions: $900m
1,000 employees, 2 R&D Centers, acquisitions – more than $835m
1,200 employees, R&D center, manufacturing facility, acquisitions –
$2.7b - Galileo
3,600 employees, 2 R&D centers, HP's largest software development
site in the world
500 employees, 6 R&D sites, acquisitions – over $750m
Selected list
Source: IVC Research Center
Global Enterprises R&D Cooperation
22 Multinationals from all over the world:
Abbott
Alcatel-Lucent
Arkema
B. Braun
Bombardier
Transportation
BT
Coca-Cola
Deutsche
Telekom
GE
HP
Infosys
IBM
Intel
Merck
Microsoft
Novozymes
Oracle
Philips
Posco
Procter &
Gamble
Renault
Telecom Italia
$5.3M granted to 80 Joint Projects
(since launching the program in 2005)
Active Programs in Latin America
Brazil-Federal Agreement in Industrial R&D- focusing on Life Science,
HLS,ICT, Renewable Energy -Open Call
Sao Paulo- Matimop and FAPESP signed a bi-lateral agreement to
promote R&D and innovation activities between entities , Call to be
launched in April ,2013
Argentina- Bi-lateral Agreement- Next Call April,2013
Uruguay-
Bi-lateral Agreement- Next Call April,2013
Columbia- New Bi-Lateral Agreement will be signed during 2013
Chile-New Bi-Lateral Agreement is expected within few month
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Uruguay - Israel
• Both countries have strong stable democracies that gives
predictability.
• While Uruguay takes advantage of its big extensions of fertile land,
making the agro-industrial complex the most important industry of
the country, Israel is focusing on service and technology
development. As a result, the Uruguayan and Israeli economies
complement each other.
• Uruguay’s biggest partners are Brazil, Argentina and China. Israel
main commercial partners are the United States and Europe.
Complementarities between both countries enable
optimization of collaboration potential
Uruguay-Israel Industrial R&D Cooperation
Bi-lateral Agreement in Industrial R&D
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2008 – MOU signed between the Government of the Republic of Uruguay
and the Government of the State of Israel
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Aim : Fostering & Supporting Bilateral Cooperation in Private Sector
Industrial Research and development
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Cooperating Authorities: The Ministry of Economy and Finance of the
Republic of Uruguay and the Ministry of Industry, Trade and Labor of the
State of Israel (MOITAL)
Implementing Entities of the agreement:
ISRAEL
MATIMOP - on Behalf of The Office of the Chief Scientist (MOITAL)
URUGUAY
ANII - The National Innovation and Research Agency on behalf of the
Republic of Uruguay
3rd Call for Proposals -April 2013
Aim-5 approved projects
Collaboration with international financial
institutions
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World Bank Group:
• MATIMOP cooperates with the World Bank Group, in particular
with the International Finance Corporation (IFC).
• Help IFC in screening innovative technology companies active
in emerging markets . Companies participating in Matimop’s
Americas programs, may apply to IFC for fund raising.
• Inter American Development Bank (IDB):
• Collaboration in innovation projects in Latin America, financed
by the IDB
• Joint participation in Innovation best practices workshops
MATIMOP encouraging IDB to take a lead role in providing support &
additional sources of funding aiming to enhance collaboration R&D schemes
in Latin America
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International Activities Raises Israeli Company
Productivity by 43%
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Total Productivity of exporting companies is 43% higher
than non-exporting companies
In terms of number of employees exporting companies
are 116% larger than non-exporting companies
Salary paid by exporting companies is on the average
27% more than that paid by non-exporting companies
Productivity growth over 5 years form start of export is
12% greater than for non-exporting companies
Research suggests two possible reasons for these results:
 Exposure of exporting companies to new technological
developments globally enables technology to adapted by them
resulting in enhanced output
 Global competition pushes exporters to raise their productivity.
Source: Bank of Israel, 2011
Impact assessment of international R&D
collaboration D)
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We find that sales and employment for Eureka participants are, on average, 28%
higher than what sales and employment would have been if the firms had not
participated in Eureka.
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These are total average effects with dispersion around them: About 2/3 of
the individual-firm effects are positive, meaning that 1/3 of the firms
participating in Eureka exhibit a decrease in sales or employment relative to
their “Twins”.
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These are total increments for a 3-year post-Eureka innovation project period
as a whole. In particular, they should not be understood as meaning that
sales and employment are increasing 28% per year.
Large firms exhibit larger effects than SMEs:
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Sales for larger firms are 29% higher while for SMEs are 27% higher.
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Employment for larger firms is 43% higher while for SMEs is 18% higher.
Source:E.G.P Applied Economics Lt 43 2010
-Argentina
Project: Development of unique location tracking
solutions that enable organizations to control their
assets and valuables using special tags
Project Framework: Argentina-Israel Bilateral Program
Participants: AeroScout (Israel) & Localizer-T
(Argentina)
-Argentina
AIVO (Argentina) & Athena (Israel)
HLS – Internet intelligence
Project
Design, develop and test a set of ontology
and semantics based software to create a
toolbox for organizations engaged in the
gathering of open source intelligence
(OSINT) from the internet.
-Uruguay
Project:
Developing a platform for the consolidation
and transfer of medical information via
mobile devices
Partners:
Ideomobile (Israel) & Micropagos (Uruguay)
Framework:
Uruguay – Israel Industrial R&D Cooperation
Program
Small countries performance
• Gross Domestic Product per Capital Index shows that 4 of 5
richest countries in the world have less that 5 MM inhabitants
(IMF- International Monetary Fund).
• the “Economist intelligence Unit” shows that 8 of the 10 most
peaceful countries have less than 10 MM inhabitants.
• the “World Economic Forum” competitiveness index suggest
that 5 out of the 7 most “competitive” countries have
populations of less than 10 MM.
• the “Human Development Index” shows that 9 out of the 10
top ranked countries are considered small countries.
Source: For nations, small is beautiful FT.com 2007
Small in size,vast in opportunity
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Every body knows every body.
Interdisciplinary research should be a competitive
advantage to undertake.
Increase support to innovative processes (piloting,
demo, risk sharing….).
Support innovative market demand by bottom up
approach.
Build a “spirit of innovation” by sustaining high public
investment in R&D .
Look for international cooperation and opportunities.
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To conclude:
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Business as usual is not an option
Investing in applied knowledge is needed
Adopt a bottom up approach is crucial
Grasp the opportunities that science offers
Small countries can play a major role in the
global markets and in societal challenges.
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Gracias Por Su atencion
http://www.matimop.org.il