The Startup Nation has been built on risk-taking by entrepreneurs and in the Life Sciences industry especially the risk is significantly greater compared to other sectors such as ICT, observes Dr. Ami Appelbaum, Chairman of the Israel Innovation Authority and Chief Scientist at the Ministry of Economy and Industry. "The risks are higher," he says, "because in Medical Devices and especially Biopharmaceuticals, the development process is complex, costly, and time-consuming with no guarantee that the product or molecule will ever be approved, or that once commercialized, will be successful." Israel Innovation Authority's unique practical tools and financing platforms are designed not only to share in the high risks of development processes but also to try and keep successful products in Israel. "Life Science is one of Israel's major potential growth engines" says Dr. Appelbaum. "In addition to Medical Devices and Biopharmaceuticals, in recent years we have seen the emergence of a great interest worldwide in digital healthcare. Israel has a significant advantage in this area. Not only because of our world renowned academia and experienced entrepreneurs, but also because Israel has an advance health system with extensive health data, where 98% of the population have 20 year old detailed electronic medical record."
In March, the Israeli government allocated a budget of NIS 922 million ($260 million) to an ambitious digital healthcare program – an opportunity not only to improve the healthcare system, but also provide a boost for Israeli companies developing digital healthcare technologies as well as enable predictive, preventive and personalized medicines.
The Israel Innovation Authority works closely with the Ministry of Health, Ministry of Economy and other government agencies to implement this program, provide incentives for startups, enable collaboration between startups, local and international healthcare providers, and train personnel in this sector.

Dr. Appelbaum assumed his current position in September 2017, after serving as president of KLA Tencor Israel, the Israeli subsidiary of a company headquartered in the Silicon Valley that develops and produces systems for controlling semiconductor production processes. KLA Tencor Israel has hundreds of employees in its plant in Migdal HaEmek and in March acquired the Israeli electronics company Orbotech for $3.4 billion. He previously managed KLA Tencor's operational system for eight years while living in the Silicon Valley.
In addition to his experience with the Israeli and the global high-tech industry, Dr Appelbaum is also familiar with academia. He was formerly director and a member of the management committee at ORT Braude College in Karmiel, and a former member of the professional advisory committee of Kinneret Academic College.
"One of the greatest pleasures in this job so far," he says, "is to see the enormous worldwide respect and admiration for Israeli innovation. People from around the world make pilgrimages to Israel to learn from us how to create similar ecosystems for innovation."

The remarkable rise of Israel's innovative industries over the past three decades, the Israel Innovation Authority and its forerunner the Office of the Chief Scientist (OCS) and MATIMOP have developed a range of practical tools, funding platforms and innovative programs to share in the risks of Israeli startups and mature industrial companies, which have made a major contribution to the emergence of Israel as a global high-tech power.
The remarkable rise of Israel's innovative industries is exemplified by the biomed industry (Biopharmaceuticals, Medical Devices and Digital Health). In 1996, there were 186 companies in this sector while today there are 1,400 companies with 120 new companies being formed every year. 40% of these companies are already generating revenues.
Dr. Appelbaum says, "In Life Sciences we have the talent and the manpower. We have one of the highest number of PhDs and patents per capita worldwide. However, many of these ideas do not mature to successful companies, or if they do it is outside Israel."
The Israel Innovation Authority itself was set up in 2016 as an independent and impartial public entity that operates for the benefit of the Israel innovation ecosystem and the Israeli economy as a whole. Its role is to nurture and develop Israel's innovation resources, while creating and strengthening the technology based t industries.
With a budget of over $500 million from the Israeli government, (complemented by the EU's Horizon 2020 program), and grants that are paid back in the form of royalties, Israel Innovation Authority supports carefully selected innovative projects.
"More than 25% of the grants we make are for Life Sciences projects and we see this support moving towards 30% of our entire budget," says Dr. Appelbaum.

He adds, "Israel is a leader in innovation, but the country can't make a living from that. The title of Startup Nation is a great honor, and I give credit to all of my predecessors who made this possible. Now, however, we have to achieve the next goal, by 2030-2040: being both a country of innovation and a country of growth."
The Israel Innovation's Growth Division operates the main R&D Fund supporting competitive R&D. This is the organization's main incentive program designed for industrial R&D support for the development of competitive products and innovative processes. The R&D Fund offers the greatest financial incentives for R&D activities from the Israeli government, providing commercial companies in all areas with support for the development processes of new products or the upgrade of existing technologies.
The Growth Department offers a range of other incentives in numerous topics from greenhouse gas emission reduction, to agriculture, space technology and alternative fuels for transportation.

In addition to the grants and a wide range of other incentives offered by the Growth Division, the Israel Innovation Authority's Startup Division operates what is perhaps the organization's best-known program – a national network of 18 technological incubators plus an additional one – FutuRx – dedicated to biotechnology, located in Ness Ziona near the Weizmann Institute of Science in Rehovot, where larger grants are available.
Dr. Appelbaum said, "FutuRx is an international consortium of leading companies Johnson & Johnson, the Japanese Takeda Pharmaceuticals and OrbiMed Israel Partners. One third of our incubators have major international partners and ten of the regular incubators focus on Life Sciences projects. 38% of the projects in our incubators are in Life Sciences technologies,"
He added, "Many of our incubators are in the peripheral regions and we have recently made a new change to the program, which will encourage each incubator to open branches in peripheral regions where they will be able to operate up to 30% of their activities.
The incubators, which began in 1991 as a government enterprise as centers for entrepreneurship designed to invest in the earliest stage startups and provide them with administrative, technological and business support, have since evolved into a public-private partnerships. Private companies or groups win tenders to operate an incubator for eight years during this time period projects they support can receive government funding of 85% of the budget for each startup company in the incubator with the Incubator providing the balance and all the infrastructure costs from offices and laboratories to the staff, business development etc. Since its inception, more than 1,000 startups have raised billions of dollars in the incubator program/.
Among the incubators focusing on Life Sciences is Sanara Ventures in Ra'anana, owned by Philips Healthcare and Teva Pharmaceuticals, MedX in Or-Yehuda, owned by Boston Scientific, and MindUp in Haifa owned by Medtronic, IBM, Pitango and Rambam Hospital.
The Startup Division offers a range of other incentive programs including Tnufa for fledgling enterprises looking to formulate and validate an innovative technology concept and the Early Stage Incentive Program for startups with a range of grants linked to sub-programs. The Young Entrepreneurship Incentive Program is training the next generation of Israel's entrepreneurs and the Renewable Energy Technology Center supports technological ventures and R&D projects from applied academic research and early stage entrepreneurship.

The In addition, Israel is a member of the EU Framework Program for Research and Innovation, which offers grants to multinational consortiums working on R&D and innovative projects. The current program Horizon 2020 (2014-2020) has a multi-year budget to which Israel has contributed €1 billion out of the €77 billion budget. The International Collaboration Division also operates the Global Enterprise R&D collaboration program connecting foreign multinational corporations and innovative Israeli companies, an incentive program for adapting products for emerging markets and an incentive program for the establishment of project centers of multinational companies in Israel.

"Israel is quite unique," says Dr. Appelbaum, "in the way that government ministries, the private sector and academia all work together very closely. This combination is something that the Israel Innovation Authority works hard to encourage."
The Technological Infrastructure Division focuses on collaboration between industry and academia to produce advanced technologies and innovative products. These programs include the MAGNET consortiums of industrial companies and research institutions collaborating on generic pre-competitive technological R&D. The MAGNETON Incentive program encourages the transfer of technological knowledge accumulated in academia for the use of industry and the NOFAR Incentive Program provides support for applied research in academia with potential contribution to the economy. The Biotechnology TZATAM incentive program offers financial support for R&D processes in Life Sciences and the Biotechnology – MIDGAM Bank (Tissue Bank) is an organized collection of human biological material, stored for medical or biological research purposes, and operated under the supervision of the Ministry of Health.
The Israel Innovation Authority has also an Advanced Manufacturing Division with incentive programs for low-tech industry and a Societal Challenges Division offering incentives to make high-tech more inclusive.
"The economic potential for growth in Israeli high-tech is staggering," concludes Dr. Appelbaum. "At present, only 8.3% of the Israeli workforce is employed in high-tech and the ultimate aim of all our incentive programs is to double this percentage over the next 10 years".