2. ACADEMIA
Israel’s academic institutions have contributed greatly to establishing and developing the local technology market. According to OECD data, Israel ranks third worldwide in percentage of the population with academic degrees:
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3. MULTINATIONAL COMPANIES
There are currently over 300 R&D centers in Israel, operated by leading international companies such as Apple, Google, Intel, Microsoft, HP, IBM, eBay, and many more.
The presence of foreign companies in Israel has contributed greatly to economic growth and has a positive impact on employment, productivity, and knowledge flow as skilled employees switch to local companies.
Productivity rates in multinational companies in Israel are higher than in other advanced countries such as France, Germany and England. Foreign companies also promote overall investments in R&D: a 1% increase in R&D expenditure in foreign companies results in a 0.27% increase in spending on R&D in locally-owned companies. Moreover, in 2015, the total expenditure on R&D in multinational R&D centers in Israel constituted 47% of the total expenditure on business R&D. These two factors mutually benefit both the multinational companies and the local market, promote growth and inspire the work environment as a whole.
4. GOVERNMENT INVESTMENTS
Over the past several decades, Israel has been a world leader in national investment in research and development when calculated as a percentage of the GDP, maintaining a steady average of 4.2%, far above the OECD average of 2.3%. This steady investment over time is proof of a government policy aimed at encouraging entrepreneurship and facilitating the growth of new ideas.
The Israel Innovation Authority subsidizes R&D expenses of start-ups (up to 75%) as well as large companies, with some programs tailored specifically for cooperation with foreign multinationals. In addition, incubator plans are developedinto technological initiatives that help entrepreneurs who are just starting to transform their ideas into commercial businesses. Government- supported research centers maintain ongoing relationships with the private-commercial sector by sharing information and human resources and helping the domestic ecosystem to flourish.
The Israeli government created a support network for R&D activities in the life sciences industry. Between 2005 and 2014, the Israel Innovation Authority channeled approximately 25% of its facilitation budgets to life sciences. In numbers, the Israel Innovation Authority contributed over NIS 250 million to the industry each year between 2000 and 2014 through its various facilitation programs.
Source: OECD
