Incentives for Industrial R&D in ISRAEL (Israel Economy at a glance)

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Incentives for Industrial R&D in ISRAEL (israel Economy at a glance)

Stephen Darori

1.    The Chief Scientist Site list new programs and contact names for most programs listed in this section. Overview with tabs is: http://www.moital.gov.il/NR/exeres/625D5C08-9096-4B88-BAEF-09E7CC0E19A9.htm

2.    The Chief Scientist Brochure listed below is also very good:http://www.moital.gov.il/NR/rdonlyres/BB679C54-573C-407C-A382-BC386AAC3916/0/OCSBrochure2006.pdf

3.    Technology Infrastructure Enhancement – Magnet, Contact: Ilan Peled. Ph 03-511-8110: Promotes technological transfer from academic institutions to industry via musal cooperation between an industrial company and an academic research group. Project’s budget is up to 800,000 US$ Grants are up to 66% of approved budget. http://www.magnet.org.il/default.asp?id=1

4.    Technology Infrastructure Enhancement-Noffar, Designed to support applied academic research in biotechnology & nanotechnology in order to adjust it to relevant applications in the industry and promotes the transer of these technologies to the idustry; Project budge is up to 100,00 US $, Gransts are up to 90% of the approved budget.

5.    Pre Seed- Technological Incubators, contact at Chief Scientist: Rina Pridor Ph 03-511-8127: Provides support for nascent companies to develop their innovative technological ideas and form new business ventures in order to attract private investors. Grants up to 85% of approved budget.www.incubators.org.il

6.    Pre Seed – Seed Fund Heznek Program– Contact: Itamar Dar Ph 02-666-2457: The Government Seed fund. The slowdown of the world economy has cased a decrease in the level of investments in start-up companies and consequently a lessening in the number of start-up companies formed. The program is based on the government matcing and investment in a start up company. Proportional to the investment of an investing entity and giving an option to the investor to purchase the government shares in the start up company at the initial price.http://www.moital.gov.il/NR/exeres/2F9931BD-7695-4FAD-9A54-950A1E99B3F8.htm also at:www.moital.gov.il

7.    Competitive R&D, Approved R&D program Contact: Moshe Haizler Ph: 02-666-2516Approved R&D program must last at least one year, and should lead to the development of a new product or a significant improvement to an existing product. Grants are up to 50% of the total approved R&D expenditures. The annual budget of 230 million is spent on 775 projects being undertaken by 500 companies. The site breaks it into A. Development of a novelity product and B R&D support for companies in Special Geographical areas. http://www.moital.gov.il/NR/exeres/625D5C08-9096-4B88-BAEF-09E7CC0E19A9.htm also at:www.moital.gov.il/madan

8.    Pre Competitive R&D, Magnet Consortium, Supports the formation of consortia maade up of industrial companies and academic insititutions, in order to jointly develop generic, pre competitve technologies. Grants up to 66% of approved budget for industry and up to 80% for the academic institution. http://www.moital.gov.il/NR/exeres/111E3D45-56E4-4752-BD27-F544B171B19A.htm also at:www.magnet.org.il

9.    Pre Competitive R&D, Katamon: Promote water techology projects by tripple cooperation between industrial company, acedemic research group and water infrastructure program; Project budget up to US$1M. http://www.israel-industry-trade.gov.il/NR/exeres/D8C128E3-63D8-441B-86BE-844011126452.htm?wbc_purpose=B

10. Pre Competitive R&D, Research Institutes: Contact: Shaul Freireich Ph 02-666-2490: Supports R&D programs carried out by Research Institutes Grants up to 90% of approved budget.www.moital.gov.il/madan

11. Pre Competitive R&D, Generic R&D, Contact Lydia Lazens Ph 02-666-2465 Encourages companies heavily in R&D to invest a seginficant percentage of funds in long term generic R&D Grants up to 50% of the approved budget. http://www.moital.gov.il/NR/exeres/111E3D45-56E4-4752-BD27-F544B171B19A.htm

12.  A wonderful overview of the Chief Scientis is available in a pdf file titled: The Intellectual Capital of the State of Israel. http://www.moital.gov.il/NR/rdonlyres/C973239E-F6C2-453A-A4D9-5A30F59258E3/0/intellectualcapital.pdf

13. Pre Competitive R&D, R&D Centers in Universites, aims to create and develop techological infrastructure for industry use. Russel Berrie Institutes for Nanotechnology at Technion,http://rbni.technion.ac.il/ :National Institute for Biotechnology Research and Development in the Negev Ben Gurion in Be’er Sheva. http://www.atp-israel.com/bgu/nibn.html

14. International Programs: Multinationals, Matimop, Contact: Yair Amitay/ Haya Miller Ph 03-511-8111: Promotes and assists participation of Israeli companies in international bilateral or multilateral cooperation programs for industrial R&D. Maintains updated database of prjects in many advanced technologies and databse of profiles of Israeli industrial companies seeking international cooperation. http://www.matimop.org.il/

15. International Programs: Europe’s R &D Framework Agreement –ISERD Contact: Marcel Shaton Ph 03-511-8123: Israel is the only non-European country fully associated with EU framework program for Research and Development. The Program offers Israeli companies and research organizations an opportunity to participate in jointly implemented projects with European counterparts. www.iserd.org.il

16. International Programs: Eureka: Contact: Udo Mannes Ph 03-511-811 #31: Currently Israeli companies take part in more than 10% of all running Eureka programs. 40% of Eureka project participants are small/medium enterprises (SME) including start up companies.http://www.moital.gov.il/NR/exeres/8A8D7E70-9BDB-4A4D-B07C-F0100E5E603E.htm also atwww.eureka.org.il

17. International Programs: Program for the Encouragement of Multi-National CompaniesProject Centers in Israel. The program encourages Multi-National Companies to conduct joint R&D Projects with an Israeli partner while focusing the activity in the national preference zones and/or in tradtional industries. http://www.moital.gov.il/NR/rdonlyres/771C3A08-2723-436B-B285-1C0CB178EE55/0/MultiNationalCompaniespptnew.PDF

18. International Programs: The Global Enterpriese R&D Cooperative Framework –GIRDF Contact:Yifat Turbiner: Ph 03-511-8116; This program attracts prominent multinational corporations (MNC) to forge investment cooperation deals with Israeli Start-ups. www.moital.gov.il/madan

19. Bi-National funds: Grants up to 50% of R&D expenses Fund Name countries:

  1. BIRD Israel- USA (www.birdf.com)
  2. BRITECH Israel – UK (www.britech.org)
  3. CIIRDF Israel – Canada ( www.ciirdf.ca)
  4. KORIL-RDF Israel- Korea (www.koril-rdf.or.kr)
  5. SIIRD Israel –Singapore (www.siirdf.com)

20. Bi-Nationals: Bi-Lateral R&D Programs Matimop, Contact: Yair Amitay/ Haya Miller Ph 03-511-8111: the Israeli Industry Center for R&D operates international R&D agreements on behahf OCS with numerous European countries, South merica, China, Russia, Canada, and Australia.http://www.matimop.org.il/

21. Bi-Nationals: US-Israel Science & Technology Commission. The commission focuses on Life Sceinces, Clean Technology, Homeland Security, Aerospace, Renewed Energy, Water Technology, and Personalized Healthcare. http://www.usistc.org/fs_index.asp

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An Unfair Advantage All Startups Have Against Big Companies

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English: Diagram of the typical financing cycl...

English: Diagram of the typical financing cycle for a startup company. (Photo credit: Wikipedia)

An Unfair Advantage All Startups Have Against Big Companies

It’s not innovation or company culture or a desire to win.  Those are important but successful big companies have at least some of those things too.  It’s nimbleness (aka – agility).  Startups have a “turning radius” measured in inches whereas really big companies can barely turn around in a football stadium.  Tucked away in this glaring contrast is a unfair advantage for the startups.  Let’s explore further.

Quickly Get Down a Path

The best startups get down a directionally-correct path as quickly as possible.  What does “directionally-correct” mean?  It means that in the general direction of the ideal destination.  I previously wrote a blog post titled “Why Use a GPS When a Compass Will Do?”  It described the differences in needed precision for various things associated with your business and suggested to use the right tool for the job.  To continue with the compass analogy, let’s Book cover - Lean Startupsay true North is the ideal destination.  In this case, directionally-correct might mean anything in the range of Northwest to Northeast.  That’s a 90 degree range on the compass.  The significance of this is you only need to do enough research and validated learning (in the context of the Lean Startup Methodology – order book here) to start on a course plus or minus 45 degrees of a true Northward direction.  Spending extra research time might gain you additional precision but it might not.  For example, you might get lucky and figure out the ideal destination is actually between North-Northwest and North-Northeast, which is a narrower 45 degree range on the compass.  But most importantly, you’ve delayed your start and would be ignoring your unfair advantage of being nimble and we’ll see how that comes into play next.

Adjust Course as Needed

So you’ve set off on a course generally in the Northward direction.  Now you’re going to use all of your sensory inputs (think continued validated learning) to figure out when, where and how to adjust course.  Your inherent nimbleness will allow you to communicate the needed change to others in your company and together implement the directional change.  In the real world, these changes could relate to the product (form, fit, function), the Unfair Advantagemarket (target segment refinement), the business model (pricing) or some other aspect of your overall original business plan.  What’s important is that you don’t wait around to get everything perfect before moving down a directionally-correct path.  Instead, you use your unfair advantage of nimbleness to adjust course as needed.  But realize this unfair advantage only works against big company competitors.  Your startup and early stage competitors will probably be using their nimbleness too, so you better get good at it.

A Moving Target

If there were such a thing as an ideal destination, it wouldn’t stay in the same place forever.  Markets regularly change for a variety of reasons, resulting in a moving target.  So the double benefit of quickly getting down a directionally-correct path and using your nimbleness advantage is that you will also be able to adjust course when the target moves.  And the truth is that a course adjustment due to precision refinement on the original ideal destination versus due to a moving target have precisely the same effect.  With amazing agility, the astute startup is able to remain on the optimal path.  And the more disruptive your chosen market is, the more often the ideal destination will move.  This can be ideal for a startup.

The Big Company’s Burden

Most people intuitively understand that big companies can’t move or adapt at the speed of a startup.  But the extent to which big companies struggle with levels of precision and concepts like course adjustments are way underestimated by most startups.  It is true that big companies have seemingly unlimited resources of human capital, brand recognition, global reach and war chests full of money.  But those really only come into play when the big company understands where the ideal destination is and can get all of their human resources pointed in that direction.  To do this they spend weeks or months analyzing as much data as possible.  Then they spend weeks or months arguing in internal debate.  Eventually, they set off on a course.  By that time, the astute startup is not only already well down the directionally-correct path but has probably already adjusted course multiple times and headed towards true North.

What about the dreaded moving target?  Whereas the startup uses their sensory inputs to realize the target moved and simply performs another course adjustment, the big company is so politically bought into their original analysis and decision that they continue on the original path.  They may or may not have even detected that the target moved.  But it doesn’t matter because a recommended course adjustment in a big company is often viewed as having set on the wrong course to begin with.  This results in finger pointing and the “blame game”.  And they also know that a course adjustment will require additional weeks/months of analysis, weeks/months of debate and weeks/months getting the employees pointed in the new direction.  So instead, the big company remains on the original course or just makes minor tweaks that won’t have much internal impact but also don’t really change the course by more than a few degrees (using the compass analogy).

I have worked for three Fortune 500 companies throughout my career and have seen this play out numerous times.  So even if I’m exaggerating a little to make a point, it’s not by much.

Bottom Line

Many startups struggle to identify an unfair advantage.  If you’re in a fairly disruptive and changing market with big competitors, I’ve just given you one.  Now see if you can find additional ones that relate to other aspects of your business model.