| In the belief that the country's economic future is largely dependent on the success of its technological industry, the government launched a technological incubator program in 1991. This program enables any entrepreneur with an innovative technological idea to turn the idea into a product. The incubator program is applied in all parts of the country, under the guidance and with the support of the Office of the Chief Scientist of the Ministry of Industry and Trade. Technological entrepreneurship incubators are supportive frameworks that enable start-up entrepreneurs ” whether they are residents, returning residents, or immigrants ” to take innovative technological ideas into the preliminary stages of development, turn them into commercial products for export, and establish factories for this purpose in Israel. Through the technological incubators, the government provides entrepreneurs with physical premises, financial resources, tools, professional guidance, and administrative assistance so that, during their stay in the incubator, they may turn their abstract ideas into products of proven feasibility, novelty, advantage, and necessity in the international marketplace . Because the state provides most of the budget during a project's incubator phase, it holds the management of the incubator responsible for the sound and efficient professional operation of each project in the incubator, including budget management and commercialization of the product being developed. The rationale here is that, in order to keep good ideas from failing, the state, practically speaking, assumes the risks in the incubator program that commercial investors are loath to take, by funding the riskiest stage of their development. Today, with around 24 incubators operating all over Israel, with over 750 projects launched, more than 63% have completed the incubator program. And 60% of these continue as independent companies. With a total of $233 million invested in 217 projects by the capital market and industry, 52% are at the sales stage. More than $76 million of products have been sold, of which $65 million were in exports. In addition, the "graduate" companies now employ over 1,780 people. Thus we can see that, from a pan-Israeli perspective, the Israeli incubator systems could be considered a success story. [11] Case Study: The Weizmann Institute of Science and the ITEK Incubator Incubators have played an important role in the development of Israel's new economy, with initiatives undertaken by the government but also by public entities or universities. Among them is the Weizmann Institute of Science, Israel's multidisciplinary center devoted to research and teaching in the natural sciences. Located on a 1.2-square km campus in the town of Rehovot, 22 km south of Tel Aviv and 42 km west of Jerusalem, the Weizmann Institute employs 1,600 scientists, technicians, and research students. It operates on an annual budget of some $176 million and manages more than 250 research groups across the spectrum of contemporary science. The Institute comprises five faculties : biology, biochemistry, chemistry , physics and mathematics, and computer science, as well as the Feinberg Graduate School. Within the Israeli R&D environment the Weizmann Institute plays an important role. The Institute is involved in almost all the scientific activities in hard science in Israel. It was the first in Israel to introduce cancer research; helped and supported the creation of the first science park, Kiryat Weizmann; and was the first to create a commercial arm to promote exploitation of Institute research. Furthermore, the Institute has extensively contributed to the Israeli economy and society in the fields of creating new drugs, agriculture, research, and education. The Institute is the third oldest among the six universities in Israel that are engaged in research in hard sciences. It is looked upon as a model inside Israel in relation to technology transfer and enjoys national and international reknown in R&D. In addition, the Weizmann Institute was the first academic institution in Israel to create a technology transfer organization to promote the commercialisation of its research: Yeda Research and Development Co. Ltd. Founded in 1959, Yeda's mission is to transfer technology from the Institute to the world marketplace by locating venture capital to create the necessary start-up companies. Today, it employs 11 people, of which five are professionals: a director who is an experienced businessman, a scientist, a lawyer, a patent attorney, and an accountant . Yeda participates in start-up companies based on projects initiating Institute research. Six such ventures were set up in 1998 “1999: two each in the fields of life sciences, chemistry, and electronics. By September 1998, 19 start-ups were established as a direct result of Institute research; in 14 of these Yeda was an active partner. Yeda realized that it was unlikely that any of the companies would show profits overnight, but if they showed the patience, they would probably thrive in the long term . [12] In 1997 Yeda made an agreement with PAMOT, a venture capital fund. PAMOT now has the right of first option on all Yeda's projects. They are obliged to create a start-up but cannot deal with licensing so they cannot compete with Yeda. However PAMOT can create a "virtual company" within the institute and check the application of the technology to the market. So far they have established six new companies. By associating with a venture capital fund, Yeda solved a problem faced by many research inistitues: how to attract pre-seed funds. Furthermore, Yeda does not demand up-front payment from start-up companies, as they would do in a licensing operation; this is done to ease the financial burden on the start-ups. Another important creation from the Weizmann Institute is ITEK, the Incubator for Technological Entrepreneurship Kiryat Weizmann, which started operating in August 1991 and hosts 11 high-tech incubator firms. Another nine have already left and operate independently. An analysis of this incubator shows the characteristic key success factors of a major Israeli incubator: -
Substantial financial support provided to the start-ups. -
Incubator administrators play an active role in each project for the entire duration. Yerushalmi, the head of the ITEK incubator, is personally involved in each of the start-ups, therefore contributing to a permanent link between the incubator activity and the companies emerging from it. -
Consultancy as a complete set of services is concretely and easily available for the start-ups. -
Responsibility is expected of the incubator managers vis- -vis the state, who must show proof that the incubator operates as a normal commercial company, although it is a nonprofit organization. This guarantees both professionalism and credibility of the incubator's involvement. -
Scientists can work undisturbed during the two years authorized for start-ups. -
A small but very active and dynamic steering committee (five people, volunteers) with minimum bureaucracy. -
Focus in a few subjects (product creation, high tech, company creation etc.). -
Measurement methods , measuring success by the amount of money raised from investors. | |
