Why Israel?

Entrepreneurial culture
Data for the last decade show that the number of entrepreneurs in Israel has been exceeded 8,100 and that about 20% of them were and still are serial entrepreneurs.
There are evident and findings that serial entrepreneurs have higher probabilities of success and that there are significantly more founding involvements of serial entrepreneurs culminated on exit (IPO or M&A) than those of one-timers.

Significant R&D spending 
The highly trained graduates of the Israel Defense Forces as well as the defense industries have spearheaded the high-tech boom; adapting cutting edge defense technologies to civilian applications. Since than Israel’s business R&D personnel climbed at a very fast pace until the dot com bubble, resided in the aftermath but almost recovered to 2000 levels by 2009. The significant growth in business R&D personnel demonstrates Israel’s wealth in human capital where short to medium terms gains can be made – close to the market.

Highly skilled immigration wave
During the early 90s, Israel enjoyed a major influx of immigration of close to one million people from the former Soviet Union, increasing the overall population by 20%. Nearly 40% of these immigrants hold academic degrees, many of whom are scientists, engineers and specialized technicians.

Prestigious academic education system and patents applications:
More than 25% of the workforce holds university degrees; Israel has world class universities and research institutions – the Technion, Weizman Institute, Tel Aviv University, Hebrew University of Jerusalem, Ben Gurion University and more. Israel ranked above Asia and Europe in R&D personnel per million capita through since 1997. In 2006 Israel had close to 8,000 people working in R&D per each million people of its population. Asia’s number was little more than 7,000 and Europe’s 4,500. It also has long been known that Israel ranks among the leading countries in patent applications per capita.

Pro-active Government policy and support
Recognizing the importance of the technology sector to the economic growth and welfare of the country, the Israeli Government has, over the years, established many incentives to encourage and support investment in technology oriented companies and projects. These included tax relief, Government grants (through the Office of the Chief Scientist), the establishment of technological incubators, the Yozma Program and others.

International Recognition – Multi-National presence in Israel
There is strong evidence of the multi-national corporations’ recognition of Israel’s R&D excellence is R&D employment and entrepreneurship. International data on corporate VC acquisitions by type of entity, normalized to account for the difference in the size of the economies, show that the levels of acquisitions and their distribution by entity (corporate development, corporate VC, other corporate entity) in Israel are close to those of the US.  Data on corporate VC acquisition by acquirer’s country/region (also normalized) show US corporate VC acquisitions of Israeli hi-tech companies has been significantly higher than US acquisitions of European companies.  Also comparative data for selected countries and years show that for Israel in years 2002-2005, about 43%-44% of employees in R&D companies worked in subsidiaries owned by foreign MNCs. The shares in the UK, Sweden, Italy, France and Finland were less than half those in Israel.

The government’s Ministry of Industry Trade & Labor offers many incentives for investment to American companies and support for industrial R&D.  http://www.tamas.gov.il/CmsTamat/Rsrc/MadaanEnglish/MadaanEnglish.html

 

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