Innovation Ecosystem Sources of Israeli innovation of Israel. Opportunities for Russian-Israeli Cooperation.
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Table of Contents
Executive Summary 4 Introduction 6 Sources of Israeli innovation 7 Additional elements (mostly non-governmental) of Israeli Innovation ecosystem 10 Universities 12 R&D centres of leading technology companies 21 Defence Forces 29 Cooperation between Russian and Israeli companies 32 Case Study: Joint Product development and marketing to Western European and American markets 32 Case Study: Ray Q and Bee Pitron cooperating on Global defence and aviation markets 34 Case Study: Israeli high-tech company performing a multimillion project in Russia 36 Case Study: Israeli software developers outsourcing software production to Ukraine 39 Analysis of Israeli venture capital industry 45 Sources of funding 45 Opportunities for Russian investors 52 Attitudes and experience in outward investment of Israeli institutional investors and VC in particular 54 In conclusion 57 Experts 57
Appendix 1 – List of events in Israel sep13 – sep14 59 Appendix 2 – Intellectual property law firms in Israel 65 Appendix 3 – Small series producers, prototype and industrial design experts 69 Appendix 4 – Technology Transfer Companies of Israeli Academic Institutions 72
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Charts and tables
Chart 1. Hebrew university budget 15 Chart 2. A comparison of R&D commercialization 16 Chart 3. Number of R&D employees in Israel 23 Chart 4. The world of R&D 25 Chart 5. Trend in Israel’s defence exports sales 30 Chart 6. Average salaries of programmers in Israel 40 Chart 7. Average salaries of programmers in Russia 40 Chart 8. Average salaries of programmers in Ukraine 41 Chart 9. World bank “Doing business” survey 46 Chart 10. Total venture capital raised by VC funds 2002-2012 47 Chart 11. Israeli High-Tech companies: capital raised investors vs. proceeds from M&A and IPO 50 Chart 12. Israeli High-Tech capital raising Q1/2011-Q1/2013 51 Chart 13. Capital raised by Israeli High-Tech by stage 52
Table 1. A comparison of Yozma and Inbal 11 Table 2. A brief review of R&D centres in Israel (of Large multinational companies) 27 Table 3. Most active VC funds in Israel 48 Table 4. List of possible consultants 57
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Executive Summary
This paper is coming after series of quite diverse papers that covered various aspects of innovation ecosystem in Israel. Due to the supplementing nature and quite loosely connected content, it should be reviewed as collection of separated themes.
Several elements of Israeli innovation ecosystem that were not covered in previous papers are covered here like Universities, the army, tech multinationals R&D centers. Each of them is playing its role and contributing to the outcome. In each of the elements, we choose to highlight the most relevant for RVC aspects.
Alternative routes of R&D funding by the universities and their great effort to commercialize the research (through technology transfer companies) received our attention. Obviously, Israeli universities are participating in the ecosystem in many other ways but we decided to pick two and to focus on them.
Same for the military. It’s a very little secret that the defence related R&D could be considered the founding father of local ecosystem and that defence R&D was always done in close cooperation with the military; however we focused on recruitment process and the synergies it creates between the army and the general society.
R&D centers of multinational tech companies are often overlooked and not getting full credit for their role as management greenhouse. In Israeli ecosystem, there is common consensus on their crucial contribution to the development of today’s leaders of Israeli high tech industry.
As a general trend, we can see that the market forces shape the Israeli innovation ecosystem. Obviously, it took fair amount of government support and intervention (with different degree of success as can be seen in the first part of the analysis) but now, it is a part of the global world, and thus affected by the trends that affect the global markets.
When VC industry suffers elsewhere, VC industry in Israel feels the pain. This global pressure on VC industry, combined with conservative approach of local institutional investors negatively affects Israeli VC industry, when only the best funds are managing to raise capital.
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One of the main objectives of RVC in Israel is to support further integration of Russian companies into global supply chains through increase of trade and business connections with Israeli high tech companies (that in any case are export oriented). Obviously, in order to start, it’s important to learn existing cooperation stories. Currently the cooperation exists on many levels and the case studies presented here show the success stories and the issues arising from cooperation attempts. The case studies were written after interviews with relevant people, mostly CEO’s or business owners. Some stories, interesting and educational were excluded in order to keep the size of the document manageable and reasonable. The main lesson from the stories is realization of great potential for cooperation where Israeli and Russian tech companies can supplement each other and have a mutually beneficial collaboration. This is the only way it will be sustainable.
Additional important task is to establish a relationship with people who possess knowledge on specific subjects that might be of use for technology companies in the RF. Due to the structure of Israeli labor market, and particularly to the narrowing pyramids in the top management of the technology companies, quite significant number of good quality experts are engaged in consulting. They can create important knowledge base that can be a great support for young technology companies. With the Venture funds, the situation is quite different. In several background conversations, managers of good quality funds mentioned that they would be happy to share their knowledge but could be able to do it if RVC became an investor.
The appendixes of this report are not trying to create a substitute to yellow pages but to list several relevant service providers that support Israeli technology ecosystem. All IP lawyers, engineering companies and development subcontractors allow sustaining industrial scale of innovation and based on preliminary conversations they will be happy to see additional clients coming to them.
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Introduction
When we are coming to review an ecosystem, one thing leads to another and without noticing we are finding ourselves “deep in the woods”. We are well aware of the phenomenon however, we are not completely sure we managed to avoid it entirely. The purpose of this paper is to touch on many aspects that the combination of them creates the famous “Israeli Innovation Ecosystem”. Many books and academic papers were written about it, some accompanied with heated debates, some widely accepted with long ovation. Nobody got a monopoly on what is the definition of Israeli ecosystem. Moreover, as the term itself, adopted from natural science, suggests, ecosystem is ever changing. Whoever spend long enough time observing it, noticed the constant change it undergoing. Not only the names of the leaders change, as it should be in any market environment, but also some industries, that were the dominant players in the Israeli ecosystem until very recently, are not around anymore. Like dinosaurs, they disappeared and vacated the space for new industries that emerged and are now attracting top talent.
Taking into account the ever-changing nature of the ecosystem, we tried to cover some elements and tendencies that are not related to the specific industry but rather characterize the relationship between parts of ecosystem or highlight long term phenomena. Nobody should look on it as “definitive description” or “full review” or worst of all “prescription”. We are rather happy to offer the intelligent reader a view from within, highlighting the aspects we perceive as important, ask questions, think about applicability of some ideas and try to derive something useful from them. There is something useful to learn from every well-functioning system or company, however, in Russian–Israeli context, we believe that there is much more to do. The amount of personal, business and cultural connections between today’s Russia and Israel is mind-blowing. Free movement of people, ideas and goods between the countries, supplemented with approximately million Russian speakers in Israel creates great opportunity for both countries. More importantly, in both countries there is a growing understanding of big potential and willingness to develop it. We believe that although unique, there is something to learn and to adopt from Israeli experience, and will be happy to focus our research on specific subjects based on the feedback we are hoping to receive from the target audience of this report.
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Sources of Israeli innovation Sources of Israeli innovation
Very little argument can be about the origin of Israeli innovation. First there was a need – the need to survive in a very complex environment that mixed Middle Eastern (ME) conflict with global political game.
Before 1948, when the current territory of Israel was part of the UK ME mandate (with Transjordan, Egypt, Iraq and most of the Arabian Peninsula) and the UK was imposing military rule, Jewish underground movement was craving for weapons. Small underground arm industry was created. In kibbutz tractor shads, at night, young self-made experts were making hand guns, grenades and explosives. The process escalated together with the situation in the country when it became clear that British mandate would come to an end. Interesting to mention that Stef Wertheimer, who later built and subsequently sold ISCAR (producer of high end cutting tools) to Warren Buffett for $6 bn dollars, started his mechanical engineering activity by repairing guns for Hagana (Underground Jewish Military Organization) in 1947. In order to fully understand the challenges of the young state, we need to look back on the world of early fifties. In 1950, UK, France and the USA signed an agreement that materially limited their ability to supply weapons to the Middle East. The idea was to prevent the arm race in the region. Nasser, the president of Egypt, was trying to purchase weapons from the USA, however Eisenhower refused. The same embargo was affecting Israel as well and effort to build self-sustainable arms industry became one of the top priorities of the young state. In 1955 Czechoslovakia sold $250 worth of Soviet weapons to Egypt (organized by Khrushchev), which was not only a milestone in the cold war but also further energized Israelis to build and develop their own arms systems.
These are the years when emerged such important companies as Rafael Advanced Defence Systems Ltd. (founded 1948), Soltam Systems (founded 1950), IAI (Israel Aerospace Industries) (founded 1953), and IMI (Israeli Military Industry) founded 1953.
The second round of advancement was done after French embargo of 1967 was imposed. Israel needed more advanced systems in order to deal with new threats and challenges. Soviet Union started to provide massive supplies of advanced weapons (radar systems, SA-3 rockets, Sager missiles etc.) to Egypt and Syria as part of their strategy in cold war with the USA. This situation forced Israelis to act again. New wave of companies, engaged in military electronics and sophisticated systems
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Sources of Israeli innovation
(Elbit, TAT Technologies, Rada Electronics, Magal Security Systems) were founded between 1967 and 1970.
The companies mentioned above and the army created strong demand for professional workforce to produce and maintain the equipment. Technical high schools affiliated with the army and the air force were founded and trained technicians. The relevant departments in Israeli universities (mechanical engineering, electronics, and aeronautics) also grew quickly and trained young engineers who got access to the modern systems and quickly gained relevant experience. When international tech companies started to approach Israeli market in mid- 60s and early 70s, the qualified workforce they were counting on, were exactly the people we mentioned – technically trained for the army purposes and ready to take on any challenging mission.
These were also the years when Israeli aerospace industry was becoming a serious player. With the increase of importance of aviation and missiles on the modern battle field, the relative significance of the entities engaged in development of these systems grew accordingly. Through the 70s and 80s, RAFAEL and IAI, alongside Elbit and its daughter companies, became more significant than Soltam and IMI that were engaged in production of more traditional arms systems. One of the highlights (followed by major disappointment) of Israeli aerospace industry was the development of IAI Lavi, Israeli jet fighter that was supposed to replace F-16 as a major fighter of Israeli air force. Despite very successful test results the project was cancelled in 1987 after building 3 planes only. The major reasons were high costs and pressure from the USA, which saw Lavi as a dangerous competition for their own F- 16. The effort that was made in Lavi’s development paid off because many technologies that were originally developed for Lavi, were implemented in different projects of IAI. Moreover, 1500 engineers who were working on the project, went to the civilian market and took leading roles in high tech industry1. Even now many of them are leading Israeli high tech companies in diverse fields like medical devices or advanced mechatronics systems.
1 Start-up Nation: The Story of Israel's Economic Miracle
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Sources of Israeli innovation
Today, Israel is one of the biggest defence exporters with more than 150 defence companies operating and more than $7bn of annual defence export in 20122. Approximately 50 thousand people are engaged in defence related industry and new branches dealing with the latest technology (cyber warfare, UAVs) are joining the club.
Not only had the defence needs shaped the industry. There are several examples when one company in some field of endeavor became so prominent that by its own right (obviously with all the “environmental and infrastructural” parts of ecosystem in place) it created an industry around it. Several examples for this phenomenon are:
Teva Pharmaceutical Industries Ltd. – It is the largest generic drug manufacturer in the world and one of the 15 largest pharmaceutical companies worldwide. The foundations of Teva were laid by Salomon, Levin, and Elstein Ltd, beginning of the 20th century wholesaler of medications in Jerusalem. Nothing exciting probably was coming out of it if Hitler was not taking power in Germany. In early 30s, Germany was the world most advanced pharmaceutical country. Traditionally, many pharmacists were Jewish (like in every trade that not required land ownership). Teva (Hebrew for “nature”) was founded in 1935 by Elsa Kuver and Dr. Gunter Friedlander in Jerusalem3. In the same years two
2 http://www.haaretz.com/news/diplomacy-defense/israel-s-arms-exports-increased-by-20-percent- in-2012.premium-1.492990 3 http://www.ishitech.co.il/israelat60.pdf 9
Sources of Israeli innovation additional and similar companies were created (Assia and Zori). After Teva merger with Salomon, Levin, and Elstein Ltd and independent growth and development, Assia and Zori merged and acquired controlling stake in Teva (that meanwhile went public in 1951). All the 3 companies finally merged creating Teva Pharmaceutical Industries Ltd.
Additional elements (mostly non- governmental) of Israeli Innovation ecosystem
As every ecosystem, this organism operates as a combination of all its parts and elements that are feeding and influencing each other. It’s very difficult to identify the pieces of the puzzle that are “the success factors”. Having said that, we still believe that it will not be fair not to mention several elements that either are carrying some lesson or can be somehow implemented in Russian environment and where RVC can play a significant role. The list below is partial but provides a brief observation of the variety of success factors. Since this paper is following very comprehensive report prepared by E&Y focused mostly on government related factors, we are trying to cover some other angles. Israeli high tech industry and VC scene are operating in an environment with very low government involvement so we believe that other factors are essential in an attempt to understand it better.
A Bit of Government involvement to start with – Tale of two programs
As a classic proverb says, “success has many fathers while failure is an orphan”. As much as people tend to remember and praise "Yozma" (Enterprise) program, they tend to forget about “Inbal” that came before and spectacularly failed albeit providing us with some important lessons.
The Inbal Program was the first attempt at implementing a targeted ITP directed to the VC industry. It was launched in 1991, 1-2 years before the implementation of Yozma. Its central idea was to stimulate VC funds by guaranteeing the downside of their investments. The mechanism that was used was a Government insurance company ("Inbal") that provided a 70% guarantee to VC funds traded on Israeli stock market (TASE). The program imposed certain restrictions on the investments of the 'protected' funds. Four funds were established within this program. It failed. Both
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Sources of Israeli innovation programs had almost similar goals, but different impacts due to a different 'design'4.
Table 1. A comparison of Yozma and Inbal
Yozma Inbal
Promoted by the Office of the Chief Promoted by the Treasury and Scientist and mostly structured as structured, as a Government owned Fund of Funds with a single objective Insurance company. Dual objective: of promoting a VC industry. promoting TASE & VC industry.
Limited partnership form of VC – the Publicity traded form of VC; no value ideal form of organization according added; hard to leverage current to the US experience and to Agency success to fundraising, low incentives Theory. for managers and bureaucracy.
Leverage Incentives to the Upside. Downside guarantees, which favour Attracting professional VC teams. the entry of non-professional VC firms.
No government intervention in the Government frequently intervened in day-by-day operation. imposed bureaucratic requirements on supported VCs.
Limited period of government Unlimited period of government incentives; and clear and easy way incentives and complex way out of the out of the program. program.
Strong incentives to collective No such incentives (legal limitations to learning, to VC cooperation, and to cooperation). 'learning from others' (through requirement of having a reputable foreign financial institution). Created a critical mass of VC Sub-critical mass of VC activity. investment
Most "Yozma" funds are among the None of the "Inbal" funds are among 20 leading VCs in Israel. the 20 leading VCs in Israel.
Follow-up funds & strong growth of Very few secondary issues. capital.
4 Avnimelech G "VC policy: Yozma program 15-years perspective", CBS - Copenhagen Business School, Denmark, June 17 - 19, 2009. 11
Sources of Israeli innovation Universities
According to the European Commission CORDIS (Community Research and Development Information Service): some 30% of the total R&D carried out in Israel (including the defense sector) and 45% of civilian R&D take place at the country's universities, colleges and academic R&D centers5. There is nothing particularly unusual about it however, two important aspects of R&D are creatively treated by the universities: financing of the research and its commercialization.
Finance
Israel's total expenditure on education as a percentage of GDP has the highest rate (8.5%) in comparison with other OECD countries6.
The higher education portion of the state budget, amounted to $1.7 billion in 2010, and was set at $1.85 billion for 2011 and at $1.99 billion for 20127.
According to the ministry of Education, 63% of the funds are allocated for research in the fields of mathematics, natural sciences and medicine; 16% for social sciences and law; 16% for engineering and architecture; 3% for agriculture; and the remainder in undefined fields. In total, almost 60% of the funding originated in Israel and the rest from abroad8. This 40% percent are of particular interest. This allows the Universities to maintain certain “academic freedom” in funding of the research and to preserve the best talent in the system reducing the brain drain. All Israeli Universities are actively engaged in fundraising activity, with quite sizable endowments. Each of the Universities has a special unit that purposely works on bringing money in from various sources. Most of the donations from within Israel are coming from corporate sponsors
5 Israel's R&D Capacity - a Promising Land, CORDIS: < http://cordis.europa.eu/israel/rd_en.html> 6 The Intellectual Capital of The State of Israel, Produced by the Office of the Chief Scientist, Jerusalem, November 2007. 7 Goldschmidt R. INFORMATION REGARDING SCIENTIFIC RESEARCH AND RESEARCH AND DEVELOPMENT IN ISRAEL, Prepared for the meeting of the Science and Technology Committee with members of European Parliaments, February 6, 2011. 8 Siegel-Itzkovich J. "Israeli universities received NIS 1.5b. for R&D", The Jerusalem Post, 18/4/2012.
Sources of Israeli innovation while the donations from abroad are collected through a very well developed network of “Friends of ….” Associations that are very active globally, mostly within Jewish communities. Hebrew University is widely considered the best Academic institution of Israel so we would like to look on its fundraising practices as an example.
Case study: The Hebrew University of Jerusalem Fundraising
As of 2013, the university's budget is $714 mln. On average: 55- 65% is governmental money ($370 mln in 2013), around 10% is tuition fee and the rest comes from donations9. Different kinds of fundraising methods and techniques are applied. The main means was organizing fundraising events for specific research groups (for example Brain Sciences, Sustainable Agriculture, Medical Research) alongside appeals to donate for new books, support for students from underprivileged background, involvement in the community and future development of the university.
The Hebrew University Friends associations worldwide create a very good framework for collecting these donations and making various appeals10. The following list shows what a broad and deep network the University has established:
IFHU - Israeli Friends of the Hebrew University AFHU - American Friends of the Hebrew University CFHU - Canadian Friends of the Hebrew University AUFHU - Australian Friends of the Hebrew University BFHU - British Friends of the Hebrew University BEAUH - European Friends of the Hebrew University UHJ - France - French Friends of the Hebrew University RFHU – Russian Friends of the Hebrew University NVHU - Dutch Friends of the Hebrew University
9 Dattel L. “The Hebrew University is preparing for huge budget cuts due to a deficit of 200 million", The Marker, 11.2.2013. < http://www.themarker.com/career/1.1926786> 10 The Hebrew University of Jerusalem, How to give. < http://support.huji.ac.il/giving-to-hu/how-to- give/> 13
Sources of Israeli innovation
Those associations are responsible for another 5-8% of the University’s annual budget11.
Additional layer of non-governmental funding of higher education and research is provided by variety of funds. Some are relatively small funds created by middle class families to honor their deceased family members, some are substantial professionally managed funds where Hebrew University is only one, although frequent, beneficiary.
One of the visible examples is the Edmond J. Safra Fund: Edmond J. Safra, one of the 20th century’s most accomplished bankers and a devoted philanthropist, established a major philanthropic foundation to ensure that individuals and organizations in need would continue to receive his assistance and encouragement for many years to come.
Following his passing in 1999, his wife Lily, continued to manage the Edmond J. Safra Foundation. The Foundation has assisted hundreds of organizations in over 40 countries around the world, and its work encompasses four areas: Education; Science and Medicine; Religion; and Humanitarian Assistance, Culture, and Social Welfare.
In 2009 the fund donated to the Hebrew University 50$ million for building the Brain Research Centre. In 7.3.2013, the new building was inaugurated12.
In total the funds are responsible for additional 5-8% of the university's budget.
Special case of fundraising is to finance tangible projects that can be named after donors. Here as well, there is a large variety and every size of donation can give a donor an opportunity to put his or her name or the name of the family member on everything starting from buildings and ending up with audio equipment or furniture in the dorms. All the openings are turned into big events which in turn are used for more
11 Bassok M. " Hebrew University President: Budget of 2.5 billion is not enough, we have an existential threat", The Marker, 23.1.2010. < http://www.themarker.com/career/1.570105> 12 The Hebrew University of Jerusalem: < http://www.hayadan.org.il/brain-reaserch-in-huji- 0106099/> < http://new.huji.ac.il/article/16781> 14
Sources of Israeli innovation fundraising and the donors’ names are put on the wall of Benefactors dedication or wall of Life Dedication.
All Israeli Universities are engaged in active fund raising either to fund research or to free money for research by funding capital needs with alternative sources.
In total, The Hebrew University of Jerusalem received $113.5 million in 2009, from different kinds of donations, trustees and etc. Tel Aviv University’s funds totalled $91 mln. The Weizmann Institute of Science in Rehovot received $69.5 mln, followed by Haifa’s Technion- Institute of Technology with $64.3 mln, and Ben-Gurion University of the Negev in Beersheba with $55 mln.
Chart 1. Hebrew University budget
R&D commercialization
R&D commercialization is one of the Israel's universities strengths. All the universities work closely with the industry, mostly on a grass root level. University researchers have a good awareness of market needs and hands-on industrial experience. Many of them participate in start-ups either as founders or as consultants alongside with their academic activity. At the same time scientists and engineers in Israeli industry maintain strong connection with the academic “mother ship”, have various arrangements to use university laboratories (crucial for small technology companies that are not able to purchase expensive equipment for their needs) and maintaining strong connection with their academic colleagues.
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Sources of Israeli innovation
All seven universities have their own technology transfer companies, which take out thousands of new international patents each year. According to the IMD survey, Israel was ranked 4th out of 61 countries in terms of knowledge transfer13. (See the chart below)
Chart 2. A comparison of R&D commercialization
Below there are a few reviews of major aspects of their activity with examples of successful projects.
"Yissum" - the technology transfer company of the Hebrew University of Jerusalem
Founded in 1964 to protect and commercialize the Hebrew University’s intellectual property, Yissum has registered over 8,300 patents covering 2,337 inventions; has licensed out 700 technologies and has spun-off 72 companies, including Mobileye, Keryx, Nasvax, and Novagali. Products that are based on Hebrew University technologies and
13 The Intellectual Capital of The State of Israel, Produced by the Office of the Chief Scientist, Jerusalem, November 2007. 16
Sources of Israeli innovation were commercialized by Yissum generate today over $2 Billion in annual sales14.
Success story - Cherry tomatoes and long shelf-life tomatoes: The world’s most popular cocktail hybrids for greenhouse production with improved shelf-life, yield, and quality, which revolutionized the fresh market industry, both indoors and in open fields.
The Daniela variety is only one example of the novel developments. More than 15 years after its first release, Daniela and related cultivars are considered today to be among the world’s leading greenhouse varieties. In Europe they have become an industry standard.
“Yeda” - the Technology Transfer Company of the Weizmann Institute of Science
Yeda Research and Development Company Ltd. is the commercial arm of the Weizmann Institute of Science (WIS). Yeda initiates and promotes the transfer to the global marketplace of research findings and innovative technologies developed by WIS scientists.
Yeda Statistics for 2010-2011: Over 2500 introductions & presentations of WIS Technologies to companies. Over 130 presentations of confidential information to interested companies (under signed NDA agreements). Over 65 new license and option agreements signed. Over 70 research projects at WIS were funded through Yeda by companies, by the chief scientist of the Ministry of industry and trade and by Yeda itself, including through joint funds with companies such as Johnson & Johnson. Over 160 patent disclosures submitted by WIS scientists15.
Success story – Copaxone: The first innovative drug to be developed in Israel and to receive FDA approval, Copaxone is a unique multiple sclerosis immunomodulator: the first and only non-interferon agent for the treatment of relapsing-
14 Yissum Research Development Company of the Hebrew University of Jerusalem Ltd:
Sources of Israeli innovation remitting multiple sclerosis. Copaxone is licensed to Teva Pharmaceuticals Ltd.
"Ramot" - Tel Aviv University's technology transfer company
Ramot is Tel Aviv University's (TAU) technology transfer company. The company provides legal and commercial frameworks for inventions made by TAU faculty, students and researchers, protecting discoveries with patents and working jointly with industry to bring scientific innovations to the market.
In keeping with TAU's goals, Ramot seeks to promote the university's developments in applications that make a positive impact on society16.
One of the main efforts of Ramot is to attract external funding (from the industry and other sources) for promising research with high commercialization potential. Ramot creates various funding opportunities for the researches.
Funding Opportunities
Industry-Sponsored Applied Research Funds Program - Premium Access to Marketable Discoveries
In conjunction with TAU, Ramot runs an Industry-Sponsored Applied Research Funds program. Companies in various industries become Corporate Partners by funding research in their fields of interest. This allows them to get a direct access to world-class research, the results of which can be transformed into marketable products. Corporate Partners benefit by expanding their innovation pipeline via exposure to academic research while reducing their risk through strategic allocation of their resources.
16 Ramot- Tel Aviv University's Technology Transfer Company:
Sources of Israeli innovation
The Technology Innovation Momentum Fund
Ramot is currently raising its second dedicated technology development fund. Known as the “Momentum Fund” its core objective is to generate more partnership-ready technologies and accelerate the translation of promising new discoveries and inventions into significant commercial applications with the potential to positively impact society. Investment in the $20 million Fund, a portion of which has already been raised, will enjoy special tax exemptions, as ruled by the Israeli tax authorities. Investment will be in TAU clean-tech, life sciences and medicine, engineering and communications, medical devices, and cyber- security discoveries and inventions at advanced stages of development.
The Colton Family Next Generation Technologies Institute
Based on a donation from the Colton family, with partial matching funds from Johnson & Johnson (J&J), this plan has funded nine projects to date, with additional projects under funding consideration.
The Miles Nadal Institute for Technological Entrepreneurship
This new fund will support promising research that holds the potential for discovering novel processes or technologies that can lead to valuable, marketable products.
Tel Aviv University Future Technology Partnership (TAU-TECH)
Initiated in 2003 with $8.5 M invested in pre-selected technologies, this is a first-of-its-kind partnership between a major Israeli university and global private equity investors. To date seven technologies in the biotechnology, medical device, and energy domains have been funded and three license agreements have been executed with additional agreements in process.
Tel Aviv University Fund for Applied Research
Based on a philanthropic donation, this plan was set up for a six year period and has funded 43 projects. Thу selected projects have great potential with regard to their intellectual property position and commercialization paths, as well as well-defined development plans. To
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Sources of Israeli innovation date, these highly promising projects have achieved the prototype stage or proof-of-concept stage at a standard acceptable by the industry. Some of these projects have already been partnered, while others form a significant part of Ramot’s commercialization pipeline.
Success story – SanDisk: SanDisk pioneered the removable flash memory storage industry since the company's inception in 1988. The company continues to lead the industry with advancements in MLC and controller technology with the development of 2-bit, 3-bit and 4-bit-per-cell and 3D technologies. Tel Aviv University (TAU) had provided a significant contribution to the X4 advanced error correcting and digital signal processing technology, which was licensed exclusively to SanDisk by Ramot at Tel Aviv University Ltd., TAU's technology transfer company. "X4 took five years of development at SanDisk, and the finished product is a testament to the hard work and collaboration of the parties involved," said Dr. Ze'ev Weinfeld, Ramot's CEO. "Once we created the basic approach, SanDisk brought this to fruition by developing its advanced X4 controller and matching it with its advanced 43nm, 64 GB X 4 memory thus making full X4 product implementation possible. This highlights the benefit commercial companies may gain from cooperation with TAU, building on our pool of talent and expertise17.
"T3" - Technion Research and Development Foundation
T3 is the commercialization arm of the Technion Research and Development Foundation, T3 has vast expertise in IP development rights, patenting and licensing inventions, as well as forming win-win business agreements, bringing together ground-breaking ideas with investors and entrepreneurs.
Success story – Azilect: Parkinson’s disease is characterized by the death of cells that use dopamine to transmit their signals. By inhibiting the breakdown of dopamine in the synapse, rasagiline permits the signalling neurons to
17 http://www.sandisk.com/about-sandisk/press-room/press-releases/2009/2009-10-13-sandisk- ships-world%E2%80%99s-first-flash-memory-cards-with-64-gigabit-x4-(4-bits-per-cell)-nand-flash- technology/: 20
Sources of Israeli innovation reabsorb more of it for reuse later, somewhat compensating for the death of cells.
R&D centres of leading technology companies
It is difficult to exaggerate the importance of multinational technology companies, including giants like Intel, Google, Apple and Microsoft, to the Israeli economy. These companies operate over 250 Israeli development centres and employ altogether about 24 thousand18 employees. Their development centres are scattered throughout the entire country: many of them are located in the central part of the country, but they have representation in the periphery (which are often poorer and less developed areas of Israel) - in Kiryat Gat, Beer Sheva, Ness Ziona, Ehud, Yokneam, Haifa, Carmiel and Tirat Ha Carmel. These centres are usually leaded by Israeli managers, who in most cases gained their experience in corporate's headquarters overseas. The map below demonstrates the number and geographic spread of development centres and speaks for itself. It also shows in the colour codes the segments of high technology that are presented there.
How it all started?
An important aspect of Israel's integration into the world economy has been increasing foreign investment, particularly in the high-tech industry. Companies like Cisco Systems, Motorola, Intel, IBM, Nortel, Microsoft, Mitsubishi, Deutsche Telekom, aviation and space companies, to mention just a few, have recognised that Israel is a fount of high-tech innovation they cannot afford to ignore. They have set up subsidiaries and research centres here, invested in Israeli companies, technology incubators, and venture capital funds, or have found Israeli strategic partners.
Annual foreign investment in Israel grew from $400 million in 1992, to peak at $5.0 billion in 2000. Since then foreign investment has
18 Orpaz I. “6 Reasons to Love the Multinational Hi - Tech Companies”, The marker, 6.3.2013.
Sources of Israeli innovation subsequently contracted, due to the high-tech crisis, the global economic slowdown and political tensions in the Middle East, but is still substantial. Foreign venture capital investment grew apace, rising from $587 million in 1998, peaking at $3.1 billion in 2000, before falling to $982 million in 2002, still higher than the level of five years before. Investment by Israeli venture capital funds followed the same pattern: peaking at $1.27 billion in 2000, but totaling only $481 million in 2002, including $62 million in foreign companies. (Sources: Money Tree and IVC). The Bank of Israel reported that total foreign investment in Israel amounted to $2.6 billion in 2002, including $1.2 billion in direct foreign investment19.
The contribution of the foreign sector development centres can be described using macroeconomic indicators: in 2009 the multinational companies accounted for 63% of expenditure on R&D of the civil-business of Israel - according to CBS data. Total R&D expenditure of these firms in the same year (primarily the cost of employing workers) was 12.4 billion. Total exports of civil R&D of foreign-controlled companies in 2007 was 10.5 billion - 86% of the total R&D Export from Israel that year, according to the CBS. In 2007 development centres of international companies in Israel employed about 27 thousand employees, about 45% of total R&D workers in Israel.
In 2012 Intel, the largest employer and the largest private investor in Israeli high tech, recruited 760 employees, with total number of Intel employees in Israel amounting to 8,500 people. That year Intel exported $ 4.6 billion - about 10% of total Israel's exports and 20% of high-tech exports - and has reciprocal procurement from local suppliers for about 737 million. During all years of its presence in Israel, Intel has invested $ 10.5 billion in local activities, especially in setting up manufacturing plants and upgrading them ($ 3.1 billion of this amount was given by government grants). Intel's procurement in Israel in 2006-2012 amounted to $ 5.2 billion20.
Although Israel is often described as a global leader in sophisticated technologies, there are areas of technological activity requiring resources
19 “How Israeli High-Tech Happened”, Globes Online, 2012:
Sources of Israeli innovation that just aren't available for the local companies. The great advantage of multinational companies is their immunity to the business cycles of local economy.
Chart 3. Number of R&D employees in Israel
In the bottom line, in spite all the innovation happening here, formally Israel is an importer of R&D, because so much of it done in companies headquartered in the US and other countries (as it can be seen in the chart below prepared by Booz Hamilton).
23
Sources of Israeli innovation
Also, the presence of multinational companies in Israel brings advantage for local workers. Once multinational companies are present in the market, workers have some safety net. If some company needs to decrease their staff, strong multinational company may be willing to recruit these employees.
This was especially relevant last year in the chip companies. AMD absorbed employees laid off from Freescale, Apple absorbed workers from Texas Instruments and Huawei those from LSI Logic. Each of the companies had large scale layoffs resulting from the decisions of the joint chiefs of global strategies that didn't concern Israel directly, but did affect Israeli workers.
Employees moving from one work place to another have an environmental influences. They create a flow of information to surrounding organizations – knowledge spill-over. This knowledge stays in Israel and contributes also to start-ups and patents, and eventually new jobs are created. Intel Israel is a great example of this: since its establishment in 1974, with an initial staff of five employees, more than 10,000 employees have left the firm about 300 people a year on average, who then moved to other place of work (according to an internal study made in the company)21.
21 Orpaz I. “6 Reasons to Love the Multinational Hi - Tech Companies”, The marker, 6.3.2013.
Sources of Israeli innovation
Chart 4. The world of R&D
25
Sources of Israeli innovation
Since 2006, on average, 30 new companies have been established every year by former Intel workers. These companies annually produce about 250 new jobs. These companies raised $ 700 million since 2006. Some of the companies were sold and became development centres for other multinational companies like Broadcom. Mellanox – one of the few major Israeli companies established in Israel in the last decade, was also established by former Intel employees.
Most foreign development centres in Israel were established on the basis of local start-ups purchased by foreign companies. And then their operations were expanded. It is, in fact, the most popular exit route in Israeli high tech.
The contribution of foreign companies is also evident in the Israeli management and organizational culture. The Israelis are considered to be very good at creative work, thinking outside the box and not being afraid of failure, however, in all process related activities, the Israelis are much weaker. Multinational firms enable their employees to learn how to manage things across different environments. The experience acquired in multinational companies by executives is sprouting new generation of managers who have capabilities in areas traditionally not associated with Israel (such as a marketing and sales).
As of 2010, more than 35,000 professionals are employed in multinationals' R&D centres in Israel. Some of the most notable are:
(*) Please note that the numbers employees given in this chapter might be quite different from those on the map on page 23 because of the different measurement methodologies.
26
Sorces of Israeli innovation
Table 2. A brief review of R&D centres in Israel (of large multinational companies)
Year No of Company established employees Major acquisitions in Israel in Israel in Israel
Ubique, I-Logix, XIV, Guardium, IBM 1949 2,000 Diligent Technologies, Storwize, Worklight
Motorola 1964 1,500 Terayon, Bitband
DSPC Envara, Comsys, InVision Intel 1974 7,200 Biometrics, Telmap
Maximal,Peach Networks,Whale Microsoft 1989 750 Communications, Gteko,YaData,3DV Systems
Applied Orbot Instruments, Opal 1991 1,200 Materials Technologies, Oramir Semiconductor
CLASS Data Systems, HyNEX, Seagull Cisco Semiconductor, PentaCom, P- 1997 1,500 Systems Cube,Riverhead Networks, Intucel, Sheer Networks, NDS_Group
Hewlett- Indigo Digital Press, Scitex Vision, 1998 6,000 Packard Nur Macroprints, Mercury Interactive
OFEK-Tech, TopTier Software, SAP AG 1998 800 TopManage, A2i
Alcatel LANNET, Chromatis 1998 250 Lucent Networks, Mobilitec
GE Nuclear and MR businesses 1998 400 Healthcare of Elscint, Diasonics Vingmed
BMC New Dimension Software, Identify 1999 450 Software Software
CA 1999 300 Security-7, Abirnet, XOSoft, Oblicore Technologies
Philips 1999 700 Elscint, Veon, CDP Medical Electronics
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Sources of Israeli innovation
Year No of Company established employees Major acquisitions in Israel in Israel in Israel
VisionTech, M-Stream, Siliquent Broadcom 2000 500 Technologies, Dune Networks, Percello, Provigent, SC Square
Marvell Technology 2000 1,600 Galileo Technology Group
eship-4u, Tecnomatix Siemens 2000 900 Technologies, Solel Solar Systems
Kashya, nLayers, proActivity, EMC 2004 1,000 Illuminator, ZettaPoint, Cyota, Corporation XtremIO
Shopping.com, Fraud Sciences, The eBay 2005 400 Gift Project
SanDisk 2006 650 M-Systems
LabPixies, Quiksee, modu (patents Google 2006 350 only)
B-Hive networks, nlayers, Digital VMware 2008 200 Fuel, Wanova
Acquired Numonyx, a joint venture Micron 2010 1,300 by Intel Technology Corporation andSTMicroelectronics
Apple Inc. 2012 250 Anobit
Oridion Systems, superDimension, Covidien 2012 300 PolyTouch
28
Sorces of Israeli innovation Defence Forces
Intro
For most part of its short history, Israel has been devoting a large share of its resources to defence purposes, putting a high priority on the development of modern armed forces with sophisticated military technologies and equipment. Various political influences (for example French embargo on shipment of weapons to Israel in 1968) proved again and again that the emphasis should be on the ability to develop and supply these capabilities by its own means. Nowadays, Israel is considered as a major worldwide player in some areas of the defence industry. When viewed in historical perspective, there can be little doubt that the defence sector in Israel had a fundamental impact on the development of this country’s technological and industrial capabilities. ('2)
The defence industries in Israel led its industrial sector in R&D and high tech intensity through most of the first 4 decades of its existence. It was estimated that during the 80’s, 65% of the national expenditure on R&D were defence related, while only 13% were oriented towards civilian industries22.
According to some measures, Israel stands out in its emphasis on defence related R&D, which consumed 3.1% of GDP in the 80s, versus 0.84% of GDP in the US, 0.58% in Britain, and 0.43% in France.
Beyond preparing the ground for the growth of civilian R&D industry and developing substantial cadre of qualified engineers and technicians, Israeli defence industries are major exporter and employer. (see chart below). Army is also playing crucial role by feeding the high tech industry every year with thousands highly qualified employees discharged from the active military service.
22 Orpaz I. “6 Reasons to Love the Multinational Hi - Tech Companies”, The marker, 6.3.2013.
Sources of Israeli innovation
Workforce
The army plays critical role in supplying fresh and well trained workforce for the industry. Through their army service, young people getting exposed to high end technology and using the knowledge they obtained in the army in their civilian employment.
Chart 5. Trend in Israel’s defense exports sales
The problem-solving and improvising nature of addressing urgent military needs has produced a workforce with valuable qualifications. Many scientists and engineers served as army officers and are used to real-time decision making under pressure, team coordination and flexible thinking.
Large number of “graduates” of elite technological units in the IDF has been recruited by and/or initiated many technological start-ups in Israel.
36% of respondents who work in start-ups indicated that they served in a technological unit, 10% were from "Unit 8200" (it is an Israeli Intelligence Corps unit responsible for collecting signal intelligence and code decryption)23. This unit got especially famous for
23 Hirschauge O. “A profile of the Israeli Hi-Tech worker: University graduate, who served in combat or a technology army unit”, The Marker, 10.3.2013: 30
Sorces of Israeli innovation
“producing” such graduates”. Numerous corporations such as Verint and Nice and start-ups like Mintigo and Aqwise were started by people who previously served in 8200. It is difficult to estimate exactly how many start-ups were created by unit 8200 "graduates", but it seems there are hundreds if not thousands.
The initial screening and recruitment process in these units are considered to be challenging and very competitive. These units are top target for many new recruits and candidates for the army service. As a result the army gets the very best talent, and later industry benefits from the experience accumulated in the IDF and the IDF classification system.
IDF screening and recruitment
Potential recruits are identified prior to reporting for national service at age of 18, based on factors such as high grades in school and social status (the army gets access to all the high school students in the country). Subsequently, physical condition, analytical capabilities and high technical aptitude are tested. Those who meet these and other criteria are invited to participate in different types of screening tests. The selection phase includes physical, mental, and social challenges, interviews and others tests (such as math exams, programming etc). Recruits are evaluated based not only on their ability to perform the tasks assigned, but on their attitude while performing them: such as how well they take hardships and unexpected difficulties, how well they work in groups and how they approach problem solving and disaster management situations. Eventually, only the most qualified are chosen to the "elite" units according to the military's priorities.
The Army has unprecedented access to the details of all the 15- year-olds in the country and the ability to cherry pick the best candidates from hundreds of thousands through sophisticated screening scheme. This arrangement works well because all involved are benefiting from it: the Army gets the best people, new recruits are happy to jump through all the hoops to make it to the top units, because they know that after they finish the service, headhunters will
< http://www.themarker.com/1.1959126> 31
Sources of Israeli innovation be waiting near the army base gate with fat offers (it actually happens) and finally, the country is benefiting twice, first time by receiving good security (product delivered by the army) and second time when these people enter the job market and start to pay high taxes on high salaries from day one of their civilian life, releasing the state from the duty to find them jobs or to spend a penny on them.
Cooperation between Russian and Israeli companies
Introduction
The cooperation between Russian and Israeli companies is an existing reality. The world is becoming more global and the integration between the two economies follows the same route, but alongside the global trend, there are several unique features.
Immigrants from the former Soviet Union became one of the leading forces in Israeli tech industry and this alone creates fertile ground for cooperation. This cooperation is based on not only “cultural proximity” and lack of language barriers but also on mutual understanding of each party strengths and weaknesses. Not everything is working smoothly in this cooperation as can be seen in one of the following stories however there is a big potential for further increase of volume and quality of cooperation in tech sector. The following case studies are based on interviews with senior Israeli executives who were directly engaged in day to day interaction with Russian technology companies. Some important lessons and examples of successful cooperation hopefully will help others to cooperate successfully.
Case Study: Joint Product development and marketing to Western European and American markets
RIT Technologies LTD (NASDAQ RITT) is a leading provider of intelligent infrastructure solutions for data centers and enterprise
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Cooperation between Russian and Israeli companies environment. The company was founded in 1989 and went public on Nasdaq in 1997. RIT has its headquarters in Tel-Aviv and representative offices around the globe: Russia, USA, China, UK, Italy, India, South Africa, Brazil. The majority of shares belongs to Russian IT group Stins Coman, one of the veterans of Russian IT scene. RIT is focused on providing big organizations with tools for infrastructure management. The company serves big organizations with complex networks architecture and high demand for reliability. Their clients are big banks and financial institutions (e.g. Standard Bank, Old Mutual, Bank of Russia, Reuters) big multinational enterprises like Daewoo, O2, Fujitsu and international and government organizations like Interpol or the US Army.
Alongside with these very stable and solid solutions, the company all the time develops and searches for new growth directions, builds impressive pipeline of innovation products and makes use of its great IP resources.
One of these products presents great example of Russian–Israeli cooperation and can be used as a successful model for additional projects. Acculize – Advanced speed enforcement camera. Speed deterrence has always been one of the top priorities of any police force but also very time consuming and cumbersome. Especially when the drivers manage to call in question the proper functioning of the camera in the court of law. There is an obvious need for trustworthy and reliable instrument with superior measurement and recording capabilities.
Acculize core technology was developed in Russia, based on a mill standard technology and it presents superior performance comparing to existing solution. It can measure and video record the traffic violations from the distance of 700 meters and to provide clear license plate reading from the distance of 250 meters. Despite very solid and impressive core technology, when RIT received the device from the Russian partners, some crucial elements were missing. The packaging, user interfaces, management software and the general design, all required an upgrade. RIT engaged with the Russian team, and both sides provided their expertise. The result was a great looking device with unique technical features:
▪ No moving parts ▪ Based on laser beam technology and able to pick a specific vehicle from multi-lane traffic ▪ Flexible in terms of power feeding and management (one device can be used by a number of officers and keep the results separately)
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Cooperation between Russian and Israeli companies
▪ User friendly interface ▪ Complaint with all the international standards
In addition to real engineering challenges that brings the development of such a complex new device, the chances of the Russian company to successfully present this product to the police force in Western Europe were slim. Since Israel is well known supplier of military and law enforcement technology in Western Europe (4th globally by military related export) it was only natural that after fixing all the interface, software and manufacturability issues, RIT took responsibility for marketing and presented the device as RIT’s product. As of today the device is being successfully tested by number of law enforcement agencies in the West.
Case Study: Ray Q and Bee Pitron cooperating on Global defence and aviation market
Ray Q was established in 1969. The partnership with the customers in the design and supply of high Quality electrical interconnect solutions has earned the company a leading status in the industry with its military, aerospace and other high reliability products. Ray Q was incorporated in 2000, as a representative, consultant and distributor of Tyco Electronics, Raychem Division, on the territory of Israel, Turkey, Eastern & parts of Central Europe, and India. Over last 30+ years Ray Q has worked with the leading manufactures in the Aerospace, Military Marine, Military Ground vehicle & medical and industrial fields or practically everybody
▪ Reliable supply of components, from either local inventory or directly from the manufacturer
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Cooperation between Russian and Israeli companies
▪ Electrical Harnesses testing & qualification facilities ▪ Electronic quoting and ordering ▪ Extensive inventory and distribution facilities ▪ On site Customer training and installations ▪ Prototype assembly line ▪ Design and documentation services, electrical wiring and harnessing
Bee Pitron is one of the oldest companies in Engineering and technology field in Russia. It was one of the first companies that started to import, install and support modern manufacturing software systems (PDM/CAD/CAE/CAM). In 1995 the company entered into importing electro technical components and in 2000 it started to design and produce electro technical components of its own. The combination of good understanding of local market and its needs and rich experience in implementation and adjustment of imported solutions provided Вee Pitron with unique competitive advantage and allowed to take on board the most challenging projects. Joint projects between Bee Pitron and Ray Q led to closer cooperation and eventually to partnership where RayQ became a shareholder of Bee Pitron. The companies are now cooperating on many levels both on domestic markets and abroad. One of the most interesting examples that can be a model for future cooperation is the example where the partnership between Russian and Israeli company has helped the Russian company to maintain and develop their sales in India.
As it was previously described, Bee Pitron has developed significant expertise in complicated electric systems. These sophisticated electric systems are widely used in aviation and defence industries. Among other things, Bee Pitron supplies on board cabling systems for Su-30 (Sukhoi multirole fighter jet). India is one of the countries that purchases Su-30, and traditionally, as in many other countries, local MOD (Ministry of defence) requires that the defence systems include a local element – certain proportion of the cost of the purchased product should be coming from a purchasing country side.
This policy is widely used by many purchasing organizations (MOD) and represents constant challenge for defence products suppliers. One of the ways to deal with the “Indian component” requirement is to establish some local production for bits and pieces of the relevant equipment. However, in case of such a complicated product as a new jet, some sophisticated solutions are required. Since Ray Q has its own production facility and an operating company in India, it was able to produce some parts of the Bee Pitron’s on board cable systems there, and helped Bee Pitron’s Su-30 to qualify for supply to Indian Air force.
35
Cooperation between Russian and Israeli companies
This case is not an esoteric example. India holds huge amount of old Soviet military equipment and local content requirement will be applied to it as well. By being able to produce locally (in its multiple branches worldwide) Ray Q can successfully meet the requirements of the most strict clients. The companies are currently considering implementing this business model on additional markets.
Case Study: Israeli high tech company performing a multimillion project in Russia
(*) The story is real, some circumstances and details have been changed in order to protect the identity of the person who disclosed the information. Despite doing so, we believe that this case study can delivers useful insights and conclusions to our readers.
In the following case study we will analyze a real engineering project performed by a Russian Technological Company (“RTC”) for an Israeli Technological Company (“ITC”). The project’s result can be described as partially successful, a working system was delivered to the client and installed by the RTC and related companies. However ITC seems to be reluctant to renew the contract with RTC and will seek for a different contractor for its future projects.
Industry Dynamics
There are several factors characterizing the industry and reviewing them will provide the reader with better understanding of our case study. The Industry is very concentrated with a limited number of very large players and big visibility of every commercial contract. One of the main features of this specific industry is that access to market is crucial. It means that cost and quality of the system are not the only factors that determine the choice of partner. What is also important is his ability to deliver and install the system. Price, not only for the system but also for an installation is a very important factor as well.
36
Cooperation between Russian and Israeli companies
Initial Engagement
ITC was looking for access to a new market. Russian companies had traditional access to it and for a long while have been considered leaders both in a specific technology and on the market in general. Although since then, Russian companies have become less prominent in the specific technological area and significant competition has emerged, Russian companies managed to preserve their leadership in installation of the systems on the target market having their experienced “boots on the ground”. RTC was introduced to ITC by a reputable market participant and was presented as able to provide access to the market. The parties met and discussed a joint project where the Russian company would build the equipment and perform the installation, while Israeli company would operate and maintain the equipment over long period of time. ITC was concerned with RTC’s lack of experience in certain areas. Last time RTC built a similar system for a foreign client 14 years ago. ITC found out that the equipment built by RTC had substantially shorter life span than similar systems built by Western competitors but RTC’s ability to market access and offered price played an important role in choosing RTC as a supplier.
Project Execution
ITC built a strong project team in order to cooperate with RTC. The team was 24 people strong and included a Russian speaking head of the project, system engineer, and permanent representative that was in charge of resolving issues on the spot and facilitating the process in Russia. The main issues started to arise on this stage. The issues can be divided into two major groups, technical/professional and cultural. Both kinds are not unique to RTC and exist in many companies. The technical issues were:
▪ Lack of knowledge in electronics and insistence on producing everything in house. For example, PCBs were manufactured in house which affected the quality and the timeline. Nobody in the world is producing their PCBs in house ▪ Lack of quality control. In place on paper only, in fact quality control was completely missing ▪ Lack of system engineering. In such a complex project, the role of a system engineer who is able to have a whole picture and to coordinate properly between different functional teams is crucial. The situations when two different teams were working on interconnected parts without being coordinated were a commonplace.
37
Cooperation between Russian and Israeli companies
Even more challenging were the cultural issues that the project’s team was facing. The most serious were:
▪ Transparency, people were lying about test results and when there was a failure, people were afraid to report to their superiors. Sometimes, the Israelis knew about the problem, while some bosses were not aware. The failure in engineering work should be used to learn and analyze, but not blamed on a specific employee. If it does, he or she will be hiding next failures and the result can be disastrous. ▪ No open discussion. One of the key elements of R&D type engineering process (and building a sophisticated system should be considered as R&D work) is the ability to have open discussion when people are not afraid to voice their views, even if they contradict the opinions of their superiors. This approach helps to raise and reveal issues and allows for unrestricted info flow. ▪ Head of the project. In matrix system, the heads of various units who were more senior than the head of the project did not take him seriously. The teams should be guided professionally by their units’ managers and managed by the head of the project. It is hard to define if it was personal or structural problem. The head of the project was not shown any respect from the units’ managers and eventually was reassigned due to their personal attitude or the lack of experience in project environment.
The Results
The project was accomplished by RTC within 36 month, instead of originally planned 24. The budget turned out to be substantially higher and tens of millions of dollars were paid as fines according to the original agreement between the companies. The system was built and installed and as of today is in full operation by ITC. While it is quite common for the projects of such a large scale to exceed the time line and the budget, not only in Russia but elsewhere, some of the issues outlined above, especially the technical ones can be easily resolved. The cultural issues of a similar nature can be seen in every big organization. Great example can be found in Harvard business school case study on Columbia space shuttle disaster in 2003 (Columbia's Final Mission, Harvard Business School 2004) where lack of ability of junior team members to openly raise their concerns lead to space shuttle disaster.
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Cooperation between Russian and Israeli companies Case Study: Israeli software developers outsourcing software production to Ukraine
Introduction
Software industry is one of the most mobile and flexible industries. The very nature of it dictates this. No infrastructure beyond basic electricity and internet connection is required, developers from all over the world are able to communicate on professional subjects using basic English and professional jargon, teams can cooperate distantly and the skill set is standard and universal. That’s why the software development is spearheading other high technology entries in every emerging (or re- emerging in our case) technology market. There are plenty successful software companies in Russia and many of them are off shore subsidiaries of international companies. The purpose of this case study is to review the dynamics of emergence of an IT cluster for outsourcing software development companies and to review the factors that supported the process. Though it happened spontaneously, we believe this process, however, can be initiated and replicated.
Company development
Nowadays Web technologies (the real name is changed on request of the company’s owner), like many other companies in software segment started as a technological start-up in 2006. The company started to build a system for web advertising optimization and management. This business idea failed, however, the developed technology proved very successful in a completely different field – bank trading systems. The company built and installed trading systems for leading Israeli banks. Meanwhile, the founder was mentoring two start-ups that were engaged in games development. At some point, all the 3 areas of activity were gathered under single roof of Web Technologies. The company employed 7 software developers and very quickly, new orders overgrew the capacity. The company found itself on a strategic crossroad. The owners made a decision to check a possibility of outsourcing the development abroad due to very high level of software developer’s salary in Israel (Please see the chart below).
39
Cooperation between Russian and Israeli companies
Chart 6. Average salaries of programmers in Israel24
Dollars (USD)Dollars
Chart 7. Average salaries of programmers in Russia25
Dollars(USD)
24 AllJobs.co.il:
Cooperation between Russian and Israeli companies
Chart 8. Average salaries of programmers in Ukraine26:
Dollars (USD)Dollars
Dollars (USD)Dollars
26 Karpenko O. “How much earn Ukrainian programmers- Data for December”, 01.02.2013:
Cooperation between Russian and Israeli companies
Choosing the destination
There is a solid empiric support to the view that cultural proximity (language as a first and dominant factor) matters when a decision where to outsource is made. It’s enough just to compare the prominence of software development outsourcing businesses in China and in India in order to see that due to the English language skills, the Western world largely preferred India for this purpose. Since the founder of Nowadays Web technologies was born in the Soviet Union (Leningrad), and spoke Russian, his natural inclination was towards doing the outsourcing in CIS. Quick study of levels of salary supported the view. After learning the environment, the salary levels, the accessibility and other factors the following criteria were developed:
1. It should be a provincial town – the salaries were at least 30% percent higher in major cities (Moscow, St. Petersburg, Kiev) 2. It still should be a relatively big town in order to have critical mass of people with suitable skills 3. It should have a fair amount of Universities or similar educational institutions – once again to ensure availability of skilled workforce
Suitable Location
A friend invited him to Dnepropetrovsk, and Dnepropetrovsk matched the profile. Dnepropetrovsk (formerly Yekaterinoslav) is the Ukraine's fourth largest city, with population of about one million people (and about 1,360,000 people in Dnepropetrovsk Metropolitan area). It is located to the Southeast of the Ukraine's capital Kiev on the Dnieper River, in the south-central part of the country.
A vital industrial centre of Ukraine, Dnepropetrovsk was one of the key centres of the nuclear, arms, and space industries of the former Soviet Union. In particular, it is home to Yuzhmash, a major space and ballistic missile design bureau and manufacturer. Because of its military industry, Dnepropetrovsk was a “closed” city up until the 1990s.
Dnepropetrovsk is a major educational centre in Ukraine and is home to two of the Ukraine's Top-10 universities: the Dnepropetrovsk National University and the National Mining University. Dnepropetrovsk currently has 14 state-run higher educational institutions, and a large number of private institutions.
42
Cooperation between Russian and Israeli companies
The list below is a list of all current state-organized higher educational institutions (subsidiaries of not Dnepropetrovsk headquartered universities are excluded)
▪ Dnepropetrovsk National University ▪ Dnepropetrovsk State Institute of Physical Culture and Sport ▪ National Mining University of Ukraine ▪ National Metallurgical Academy of Ukraine ▪ Ukrainian State Chemical-Technological University ▪ Dnepropetrovsk State University of Internal Affairs ▪ Prydniprovska State Academy of Civil Engineering and Architecture ▪ Dnepropetrovsk National University of Rail Transport ▪ Dnepropetrovsk Agricultural University ▪ Dnepropetrovsk Academy of Finance ▪ Alfred Nobel University of Economics and Law ▪ Academy of the Customs Service of Ukraine ▪ Dnepropetrovsk Medical Academy ▪ Dnepropetrovsk Institute of the Inter-regional Academy for Human Resources ▪ Dnepropetrovsk regional institute of the Presidential Civil Service Academy of Ukraine ▪ Dnepropetrovsk Institute for the Preparation of Industrial Experts
Currently around 55, 000 students study in Dnepropetrovsk, a significant number of whom are students from abroad.
Establishment of the off shore subsidiary
It took several weeks and 3 visits to Dnepropetrovsk to establish an off shore subsidiary there. This demonstrates great mobility of software industry and great opportunity it creates for attracting similar businesses to Russia (more about it later in a business plan).
During the first visit, the friend of the entrepreneur introduced him to a local lawyer and organized 3 interviews with headhunters for him. All the meetings and the interviews took place in the coffee shop. On his second visit, he already met with accountant and property agent in addition to the interviews with several programmers scheduled by the headhunted selected earlier. Property agent showed a few listings and on the third visit all the meetings and interviews were held in the company’s brand new Dnepropetrovsk office. The founder was giving instructions to
43
Cooperation between Russian and Israeli companies the local lawyer, property agent and headhunter by phone and managed to establish a meaningful operation in no time. Currently the office employs 70 programmers.
The office operates as a Ukrainian company fully owned by an Israeli company. There is no special tax treatment for the software developers and as everybody around, the company uses the methods of legal tax optimization. All the employees have registered as private entrepreneurs in order to reduce the tax burden of the company. According to the entrepreneur if all the labour and social taxes were to be paid, the attractiveness of this move would have become much lower.
The network effect or the power of the herd
As fascinating as this success story is, it’s far from creating any significant volume of business activity that can be of interest to the policy makers. However, as it often happens, the network effect kicked in. Other Israeli software developers heard the story (small country, we said it previously), learned how easy it can be done and in no time 10 software development companies set their operation within couple of blocks away from Web Technologies’ offices. Thus a cluster of software industry has been created. It now has life of its own and is growing fast. One of the companies that have settled there is going public on NASDAQ in September and this will strengthen the cluster’s reputation even further. It’s important to emphasize that all of it happened almost accidentally, without any help or involvement of authorities.
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Analysis of Israeli venture capital industry Analysis of Israeli venture capital industry
Sources of funding
Intro
Israel is a well-developed modern economy with significant role played by technology intense industries. In 2010 Israel was reclassified from Emerging to Developed market by MSCI, a move that from one side confirmed the maturity of local economy but from the other side, as many experts had predicted, negatively affected the trading volumes. When Israel was classified as emerging market, it was very attractive investment target for institutional investors with “Emerging markets” mandate due to proper legal system and good investor protection mechanisms (see chart below). Now local companies need to work harder because they are compared with mature market multinationals. In 2010, Israel also was admitted as a full member of OECD.
The big role that high-tech industry is playing in Israeli economy has supported the development of vast VC industry (despite recent decline Israel is still the leader by VC investment per capita) however big reliance on international LP’s makes this industry sensitive to economic cycles in US, EU and other places (although they do not affect Israeli economy as hard as some other places).
In its annual “Doing Business” survey of 181 countries the World Bank, ranks Israel the fifth, alongside the U.S., Canada, and Ireland and outranking the United Kingdom in the area of investor protection.
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Analysis of Israeli venture capital industry
Chart 9. World Bank “Doing Business” survey
Israel’s venture capital industry has approximately 70 active venture capital funds, of which 14 are international VCs with offices in Israel27. Between 2003 and 2012, Israel's venture capital funds attracted $6.77 billion.
VC funds raised $607 million in 2012, following $796 raised in 2011 (2011 was the year when VC funds were back to raising capital, after two very difficult years. No capital had been raised by Israeli funds in 2010, and only $256 million had been raised in 2009, a 76% drop from 2008 level)28. See the chart below.
27, 31, 37, 38, 40, 46 Ministry of Economy State of Israel, “VENTURE CAPITAL IN ISRAEL”, 24.4.2013: < http://www.investinisrael.gov.il/NR/exeres/A19A138D-87A7-416B-8D62-1C968E035E13.htm> 28 28, 32 IVC Research Center, Israeli Venture Capital Fund Raising - 2012 Summary, IVC-KPMG Survey: Israeli venture capital funds raised $607 million in 2012. 46
Analysis of Israeli venture capital industry
Chart 10. Total venture capital raised by Israeli VC Funds by Vintage Year ($b) 2002-2012
The leading funds, Sequoia V, Pitango VI and Magma III, raised a joined amount of $450 million, 74 percent of the total funds raised by all Israeli VCs in 2012. Micro-VC funds continued to attract investments with six micro funds raising a total of $83 million, nearly 14% of total capital raised.
International Venture Capital Firms: Several leading U.S. and European VC funds have Israeli branches, namely Alta Berkeley Venture Partners, Battery Ventures, Bessemer Venture Partners (BVP), BlueRun Ventures (BRV; formerly Nokia Venture Partners), Blumberg Capital, Bridge Capital Fund (BCF) LP, Canaan Partners, Defta Partners, Lightspeed Venture Partners, Partech International Inc., Susquehanna Growth Equity (SGE) LLC, Venrock, YL Ventures, and Ziegler Meditech Equity Partners (ZMEP) LP. Additionally, there are some 220 international funds, including Polaris Venture Partners, Accel Partners and Greylock Partners, that do not have offices in Israel, but actively invest in Israel through an in-house specialist. The VC divisions of leading multinationals, with R&D centres and acquired companies in Israel (e.g. Intel, HP, TimeWarner Inc., Sony, Cisco and others) have also found that the country offers an attractive VC market.
Most active VC funds in Israel
As it appears in IVC’s 2012 Research: Ninety venture capital funds made their first investments in Israeli and Israel-related companies in 2012 according to the Most Active Venture Capital Funds report prepared by IVC Research Centre. Nineteen Israeli and foreign venture capital funds made three or more first investments, with the most active being Carmel Ventures, an Israeli VC fund managed by Shlomo Dovrat and Avi
47
Analysis of Israeli venture capital industry
Zeevi. Carmel made 11 first investments in 2012, compared with only three first investments in 201129.
Horizons Ventures, controlled by Hong Kong investor Li Ka Shing, made 10 first investments, followed by two Israeli funds, Genesis and Gemini, each of which made seven first investments. Jerusalem Venture Partners made six first investments, followed by Magma Venture Partners with five30.
Five different venture capital funds – including Pitango, Israel's largest fund – made four first investments in 2012. Eight others made three first investments, while each of 19 funds, including Israeli micro- funds, invested in two companies during the year. The remaining 52 venture capital funds made only one investment each31.
Table 3. Most active VC funds in Israel – 2012 (Ranked by Number of First Investments)
Capital Total First Portfolio Company Rank VC Fund Managed Investments Name ($m) Facemoods, Ekoloko, TradAir, Tapingo, Tonara, 1 Carmel 608 11 SAManage, Adapteva, ironSource, Desti, Abes Market, Cooldata Everything.me, PlayMyTone, Hola, Wibbitz, Horizons 2 N/R 10 Ginger Software, Shine Ventures Security, Preen.me, Invy, Stevie, Mishor 3D Moovit, Jfrog, WalkMe, Gemini 696 7 Sckipio, Mominis, Sportority, SAManage 3 EatWith, Commerce Genesis 618 7 Sciences, TradAir, 3Dsloes, DaPulse, Preen.me, Sckipio Correlor, Wishi, Gamba 4 JVP 901 6 Games, Playshift, Theta Ray, ReDuxio
29, 34, 35 IVC Research Center, “Most Active Venture Capital Funds in Israel - 2012”.
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Analysis of Israeli venture capital industry
twtrland, Corephotonics, 5 Magma 295 5 AppsFlyer, Xplenty, Fortycloud JethroData, DudaMobile, Pitango 1490 4 Skycure, Magenta Medical OrbiMed Otic Pharma, RDD Pharma, 222 4 Israel Omim, cCAM Dragonplay, Fiverr, 6 Accel N/R 4 MobileSpaces, Origami Logic Blumberg Moment.me, Mishor 3D, N/R 4 Capital Cyvera, MentAd Vayyar, MyHeritage, Bessemer N/R 4 Intigua, Ravello Sequoia 780 3 BigPanda, Indeni, Adallom Israel Giza 562 3 StorONE, WalkMe, Pebbles Vintage 535 3 Clarizen, FiftyOne, Celeno Applicaster, Cooladata, Greylock 364 3 Xplenty 7 Cedar 325 3 Wochit, SherPa, 365Scores CloudLock, StartApp, Ascent N/R 3 ScaleBase Regentis, Pharma Two B, Crossroad N/R 3 Hairstetics Social+Capi N/R 3 Base, Simplee, CloudOn tal
The High-Tech companies
In 2012, the Israeli high-tech companies attracted $1.9 billion, 11% decrease compared to $2.14 billion in 2011. In 2010 and 2009, the high-tech sector raised $1.26 and $1.2 respectively32. In 2011, there were 85 mergers and acquisitions (of Israeli companies) in the Israeli market worth a total of $5.23 billion, a 134% increase from $218 billion in 2010 and the second highest amount in a decade, after the $10 billion worth of deals in 2006.The average deal size in 2011 increased by nearly 85% to $60 million from $32.5 million in 2010. This increase reflects a relatively high number of deals above $100 million, with M&As of Israeli VC-backed companies in 2011 totalled $12.52 billion, a 102% increase from 201033.
32 Blue Star Indexes, Why Invest in Israel, 2012 BlueStar Global Investors LLC: Analysis of Israeli venture capital industry Chart 11. Israeli High-Tech companies: capital raised from investors vs. proceeds from M&A and IPO In Q1 2013, the software sector attracted the largest share of investments for the first time in four years. 34 software companies raised $136 million (29%), compared with $105 million (21%) and $107 million (22%) in Q4 2012 and Q1 2012, respectively. The Internet sector followed with a 22%share of investments. 53 seed stage companies raised $31 million (7%) in Q1 2013, a 37% decrease from $49 million raised in the previous quarter and 6% below $33 million (7%) attracted by 41 seed companies in Q1 201234 (see the chart below). < http://www.investinisrael.gov.il/NR/exeres/A19A138D-87A7-416B-8D62-1C968E035E13.htm> 34 IVC Research Center, Summary of Israeli High-Tech Company Capital Raising Q1 2013, IVC and KPMG Report. 50 Analysis of Israeli venture capital industry Chart 12. Israeli High-Tech Capital Raising Q1/2011 – Q1/2013 ($m) Investment by Stage In 2011, mid stage companies were leading in capital raising with $903 million or 42% of total capital raised. Seed companies attracted 5%, early stage companies 26% (slightly down from 35% in 2010) and mid to late stage companies raised $1.48 billion, an increase of 90% from 2010. According to KPMG, the increase in late stage investments indicates the strength of Israel's technology industry, as well as its attractiveness to foreign investors35. 35 IVC Research Center, Summary of Israeli High-Tech Company Capital Raising Q1 2013, IVC and KPMG Report. 51 Analysis of Israeli venture capital industry Chart 13. Capital raised by Israeli High-Tech companies by stage Opportunities for Russian investors As it was shown previously, Israeli venture capital industry is going through a very serious challenge. The lack of funding that leads to a major contraction of the industry is caused mostly by the economic crises but not only. A big rock was dropped into the quite pond of VC firms relationship with their LPs. The waves this rock has created, can be largely regarded as another step towards search for a new model. On May of 2012, there was a report published the Kauffman Foundation, which currently has about $249 million of its $1.83 billion portfolio allocated to venture. The report had a title “We Have Met The Enemy… And He Is Us” and drew on the lessons from 20 years of Kauffman Foundation experience in VC investment in venture capital. The Kansas City, Mo.-based Kauffman Foundation promotes entrepreneurship and education, and is known in the venture world for creating the Kauffman Fellowship to train venture capitalists, a program that was spun out in 2003. The essence of the report is that financial institutions spectacularly failed in managing their VC allocations. Currently established practices create a situation where VC fund’s manager’s interests are not aligned 52 Analysis of Israeli venture capital industry with the interests of LPs. The funds are big enough to allow the managers to have a nice lifestyle just from collecting management fees (2%) and in vast majority of the funds, the managers contribution towards the fund is 1% only from the fund. Alongside these observations, general performance analysis shows that most of the VC (except for a few outstanding players) returned pretty disappointing result. The combination of the crisis and the Kauffman report publication has significantly reduced VC allocations of big institutional investors. CalPERS, (California Public Employees' Retirement System) that has traditionally been a big LP in several Israeli funds is a very good example. With $257 bn under management and 1.6 mln pension beneficiaries, it’s the biggest pension fund in the USA. It has traditionally allocated 7% of the funds for the VC investment. Out of $36 bn PE portfolio, slightly above $2 bn have been allocated to VC. In recent public interviews, Calpers managers promised to reduce it to 1%-2%. Like in every cloud, there is a silver lining here as well. First, like forest fire cleans the growing grounds for the strongest trees, the best performers are staying around and are still keeping and raising capital. For the fund of funds, it provides clear evidence of what are the funds that can still be trusted by wider investment community and which have lost the trust. Second, it forces the industry players to try, innovate, and come with new models some of which might be better than the existing ones. In the process of preparation of this report, we met with several funds and discussed the possibility of learning from their experience. Obviously all the funds expressed an interest to learn more about fund of funds like RVC and were happy to share their experience based on RVC becoming their limited partner. Fair enough, they asserted that this is the only way to justify spending time and opening the processes for the review of RVC people. It is very difficult to argue with this approach and quite unrealistic to expect that successful VC managers will be spending time on teaching and educating somebody without being clearly motivated to do so. What is important is to assess the real situation of the funds to be sure that RVC is not going to save the funds that otherwise will not raise enough capital. The bet should be on winners, oversubscribed funds that are picking their LPs very carefully. Such funds are paying attention not only to the amount of money the LP brings in but also on additional benefits (doors opening, access to interesting market etc.). In this situation, RVC can represent and position itself as a gate keeper and enabler of sizable Russian and CIS market. Leading venture funds are following the convergence that the Russian market is undergoing with the regard of new media, internet retail and social networks with great interest and will potentially be interested to see RVC 53 Analysis of Israeli venture capital industry among their LPs and to provide the desired learning experience on venture investment best practices. Attitudes and experience in outward investment of Israeli institutional investors and VC in particular The Israeli Institutional Investors - facts and figures Israeli institutional investors manage more than 350 billion USD36 (these figures do not include insurance firms’ own investment capital, private investors’ or private firms’ investment capital). Until recently, the government has either heavily taxed or prohibited investment in foreign instruments while granting generous exemptions for local investment, thus forcing the institutional investors to allocate most of their investments within the Israeli capital markets. Recent years witnessed a significant shift in the attitude of the Israeli Commissioner of Capital Markets Insurance & Savings. The Commissioner currently allows global investment diversification as a risk management strategy. And its regulation establishes that financial institutions will be able to invest in foreign countries which are ranked BBB or higher, or in countries that are members of the OECD. As a result, Israeli institutional investors are starting to seek investment alternatives abroad. Secondly, Israel is a small country and it has very large institutions here. As they grow bigger (insurance side and pension side where they have new money coming every month) they are almost forced to go offshore because they're already very heavily invested in the Israeli market. 36, 42, 43 Israel’s Institutional Investor Conference: Analysis of Israeli venture capital industry Provident and pension funds manage $195 bn, Mutual funds $42 bn, insurance firms manage $58 bn and banks manage $40.5 bn in own investment accounts37. The long term savings market in Israel, excluding the banking system, companies and family funds, has more than $246 bn under management. The market is centralized and is managed by seven dominant managing firms: Migdal ($21 bn), Clal ($20 bn), Harel ($10.6 bn), Phoenix and Excellence ($10.86 bn), Menorah ($13.6 bn), Psagot ($14.3 bn). Banks’ own capital for investment: Leumi manages $16 bn, Poalim - $7.7 bn, First International - $4.4 bn and Mizrahi $2.2 bn. There are three investment tools: provident funds with approximately $80 bn under management, pension funds with approximately $102.9 bn under management and life insurance firms with approximately $64.3 bn under management. Most of the large institutional bodies offer all of these three investment vehicles. The local market is opening itself more and more to investments abroad, and this diversification is largely supported by the government. The exposure to funds in general and to hedge funds in particular is growing annually, especially amongst the large institutional bodies. Some invest through FOF and others directly. In insurance firms out of total assets, around 3% is invested in funds and 1.25% in hedge funds; in pension funds 0.75% is invested in funds and 0.2% in hedge funds; and provident funds invest 1.5% in funds and 0.5% in hedge funds38. From the interviews with several executives from Israeli institutional investors we learned that the change is rather small and the investment committees are very conservative. The preferred exposure to the external markets is either through investment in commercial real 37 IVC Research Center, Summary of Israeli High-Tech Company Capital Raising Q1 2013, IVC and KPMG Report. 55 Analysis of Israeli venture capital industry estate in Western Europe (mostly not directly) or through ETNs (Exchange traded notes) that are tracking various indexes and issued by triple A banks. Everything beyond this exposure will be considered not prudent and will never pass the investment committee. Moreover, Israeli institutional investors are not participating in financing local VC industry. According to the data presented by Israeli Ministry of Finance, 95% of the money invested in Israeli venture funds comes from outside the country. For example, when the amount of money under management of Israeli institutional investors grew from $99 bn to $238 bn between 2003 and 2010 (increase of 140%), the relative amount of investment into VC funds contracted from the highest record of 0.22% in 2005 to 0.15% in 2010. Since 2010 till today it remains without much change. Even after the government provided the institutional investors with 25% downside protection (allocating $228.6 mln for it) and got their commitment to invest at least $128.6 mln, they have only invested $102.9 mln39. Israeli private investors are slightly more international in their capital allocation. According to the data from the Bank of Israel (reviewing the distribution of assets of the public): In 2013, 12.2% of all assets were invested abroad. A slight increase from 11.9% and 11.6% in 2012 and 2011 respectively40. 41, 42 Inbal Orpaz, 17.07.2013, The Marker. 40 Bank of Israel, Information and Statistics Division, Current Data on Market Capital, Distribution of assets of the public (by type of assets), 2009-2013. 56 In conclusion In conclusion On the backdrop of long economic downturn and diminishing VC allocations of major USA institutional investors, Israeli venture capital industry is money strapped. Vast numbers of VC funds in Israel are in a “zombie” mode. They have portfolios to manage however they have very slim chances of raising additional funds. Only a few exceptional funds, with great track record are keeping and raising money. In the same time, a booming start up scene with strategic buyers pouring in creates strong motivation for VCs to keep investing locally. We have presented the question of possibility of investment in Russian technology companies to both Israeli institutional investors and venture funds and their response was universally discouraging. Experts Israeli market is a very fertile ground for sourcing technology experts. A big number of small companies, with quite frequent failures/success constantly create meaningful number of people of sufficient quality and experience who are available for short term assignments and consulting projects. Very often these people are on a very senior level with experience in international project management and great technological achievement. Some of them are out there and either looking for a job or for shorter term consulting assignments, some are taking a deliberate break, others are starting their own small businesses based on their skills. Additional factor that creates relatively large number of technology experts available is the narrow pyramid at the management level in technology companies. It creates a situation where many good tech experts, who either deliberately or for the “lack of elbows” do not make it to the higher ranks of senior management, get frustrated and leave the companies where they have spent many years. Not only people who are out of organized job market can be good consultants. Many companies are very open-minded and allow their staff members to do consulting in parallel with their main employment. Additional aspect that makes Israeli market an attractive source of expertise for Russian technology companies is abundance of Russian speakers with technological experience from the world leading players. 57 Experts From several background conversations with technology and management experts, we have learned that a vast majority of them demonstrated openness and readiness to be engaged as advisers to Russian technology companies, investment funds or development organizations. In the table below, there are several examples of consultants who are available and will be happy to consider consulting engagements. Table 4. List of possible consultants Main Past Current Areas of Expertise experience position Expertise Technology Founded, Partner in a Communications, Company developed, IPO- leading venture Start-ups, management ed on NASDAQ a fund International sizable Chairman of tech market, VC, technology High-Tech Growing company company companies from start up stage to 100s of millions sales Financial CEO of regional Director in big Start ups Technology branch of one of asset M&A the world management Financial leading company innovation information Global Networks services Strategic providers for Development financial markets R&D VP R&D in Consultant System management several global Engineering public R&D companies management VP R&D in Machine Vision medical devices Robotics and clean tech start up IP protection Patent lawyer, Senior partner Patent law – and Partner in in patent office Globally management patent law office IP management and protection On a specific request, a relevant consultant can be found in every area of expertise. 58 Appendix 1 – List of events in Israel sep13-sep14 Software and Technologies The Event Dates Theme Location Link http://www.wikicfp.com/cfp/pro HVC 2013 5-7.11.2013 HVC: Haifa Verification Conference Haifa, Israel gram?id=1241&s=HVC&f=Haifa %20Verification%20Conference http://new- Annual development of real-time systems and Ramat Gan, Embedded 2013 8.10.2013 techevents.com/index.php/even microprocessors Israel ts/embedded The exhibition is designed for the global business The exhibition for communities including: CEOs, industry & Institutional http://www.stier- office technologies, 15- buyers, CFOs, marketing & sales directors, IT managers, Tel Aviv, Israel group.com/english/fairs/fis/info. computing and smart 17.10.2013 network & system managers, R&D, project managers, htm business solutions operational & logistics mangers, architects & interior designers http://www.ieee.org/conference 2013 IEEE International Conference on Microwaves, s_events/conferences/conferenc COMCAS 2013 23.10.2013 Communications, Antennas and Electronic Systems Israel edetails/index.html?Conf_ID=30 (COMCAS) 834 http://new- Ramat Gan, Testing 2013 29.10.2013 Testing equipment and processes. techevents.com/index.php/even Israel ts/testing http://www.iati.co.il/event- IATI- Cyber Forum 1.10.2013 Cyber un-conference Israel item/267/cyber-un-conference IATI- VC Committee 9.10.2013 VC Committee Meeting Israel Coming soon Meeting The (Ernst & Young) Journey conference summarizes Journey 2013 - The the main events that took place in the high-tech, life- http://eng.dcf.co.il/Journey_201 17th conference of the 17.10.2013 Israel science and venture capital industries over the past 3_eng_prb.aspx technology industry year. It also provides future forecasts and trends. IATI- Multi National http://www.iati.co.il/committee- 19.10.2013 IATI's 2nd Multi-National R&D Centres Conference Israel Companies Forum forum-item/3/multi-national- 59 companies-forum How Can the Enterprise Get Ready for the Post-PC http://mobility2013.events.co.il MobilITy 2013 18.11.2013 Tel Aviv, Israel World? /save-the-date 19- http://www.ariel.ac.il/sites/shill ICR 2013 THE 4th ISRAELI CONFERENCE ON ROBOTICS Tel Aviv, Israel 20.11.2013 er/icr2013/registration.html http://new- Electronic Packaging Annual Conference for development and production of 17.12.2013 Avenue, Israel techevents.com/index.php/even 2013 electronic equipment ts/packaging IATI- Cyber Forum 7.1.2014 Cyber Forum Israel Coming soon Bootcamp Venture's 23rd event globally in 6 years and 18- will showcase 20 of the most promising Israeli start-ups iX | Tel Aviv 2014 Israel Coming soon 19.3.2014 from the fields of digital media, mobile and e- commerce, health tech, IT and more. Attendes profile includes from field of Nanomaterials, 24- Nanoelectronics, Nanophotonics, Nanobio, http://www.biztradeshows.com/ NanoIsrael Tel Aviv, Israel 25.3.2014 Nanomedicine, Energy & The Environment, trade-events/nano-israel.html Nanosatellites; nanocomputers…. 27- Machine Vision 2014 Annual Computer Vision Conference Tel Aviv, Israel Coming soon 28.5.2014 Start-Up Conference 27- Start-Up Conference Tel Aviv, Israel Coming soon 2014 28.5.2014 The Israeli Start Up 27- The Israeli Trade Fairs & Convention Centre Tel Aviv, Israel Coming soon conference 2014 28.5.2014 New-Tech 2014 27- Hi Tech and Electronics Tel Aviv, Israel Coming soon Exhibition 28.5.2014 27- Robotics 2014 Annual Robotics Conference Tel Aviv, Israel Coming soon 28.5.2014 ChipEx2014 5.2014 International Conference on Israeli Chip industry Israel http://www.chipex.co.il/ ST Technoday Israel *5.2014 STMicroelectronics Herzliyya, Israel Coming soon 2013 TCE Conference 2013 *5.2014 The 4rd Annual International TCE Conference Haifa, Israel Coming soon Profile for exhibit includes Automation & Control, Rax International 24- Industrial automation, Control instruments, Automatic http://www.biztradeshows.com/ Tel Aviv, Israel Exhibition 26.6.2014 computerized controls, Pneumatic electronic control trade-events/rax-israel.html systems… 60 Storage & Backup *5.2014 Storage & Backup Avenue, Israel Coming soon 2013 DRP 2013 *6.2014 Annual Conference of Functional Continuality Tel Aviv, Israel Coming soon CMO 2013 *6.2014 BI, CRM, Big Data, Clouds and more… Avenue, Israel Coming soon CloudCon 2013 *6.2014 Cloud Tech Avenue, Israel Coming soon M2M 2014 *6.2014 Machine to Machine Communication Herzliyya, Israel Coming soon The 23th International Fair For Technological Technology 2014 *6.2014 Tel Aviv, Israel Coming soon Innovations and Achievements. Israel Cyber *7.2014 Technology, Computer and software, Security Tel Aviv, Israel Coming soon Conference 2014 BioMed The Event Dates Theme Location Link It is a premier event in Israel to the medical device MDDMI 2013 industry, in which numerous medical device innovative Conference & 8.10.2013 companies, looking for service providers subcontractors Haifa, Israel http://www.mddmi.co.il/ Exhibition and professional suppliers, aiming to partner with them to accelerate its innovative products' time to market. http://new- Ramat Gan, MediTech2013 27.11.2013 Annual medical electronics development conference techevents.com/index.php/even Israel ts//meditech Conference and Exhibition on Investments in Medical http://inves- InvesMed 3-4.2.2014 Tel Aviv, Israel Devices med.com/exhibition_1.ehtml These exhibitions represent the entire spectrum of the 11- latest innovations in the fields of Medical Technologies, http://www.bvents.com/event/4 Medax 2014 Tel Aviv, Israel 12.3.2014 Healthcare IT, Pharmaceuticals and Hospital Supplies, 12002-medax as well as Diagnostic 14- Life sciences and medicine exhibition for manufacturers, IMS Expo Israel Coming soon 15.5.2014 developers and researchers Medithcg 2014 *5.2014 Development of medical electronics Tel Aviv, Israel Coming soon MEDinISRAEL 2014 *6.2014 The 2nd Medical Devices & HIT Summit-MEDinISRAEL Tel Aviv, Israel Coming soon A complete view of biotechnology and medical devices ILSI Biomed Israel *6.2014 Tel Aviv, Israel Coming soon 61 Finance and business related The Event Dates Theme Location Link DC Finance's Going Public and Raising 9.10.2013 Tel Aviv Stock Exchange Visitors Centre Tel Aviv, Israel http://www.dcf.co.il/2.aspx Capital Abroad Conference Organized by Cukierman Investment House Ltd. and Catalyst Fund, Go4Europe is one of the most prestigious http://www.go4eu.com/index.p Go4Europe 2013 28.10.2013 conferences in Israel. Go4Europe is addressing the Israel hp?option=com_content&view= current issues of raising funds and establishing strategic article&id=231&Itemid=117 alliances in Europe The 2013 Israeli Ramat Gan, Corporate Finance 11.11.2013 Israel's 6th Annual Corporate Finance Conference http://israel-finance.com/ Israel Conference This gathering of finance, government and business BLOOMBERG FUEL 12- http://www.bloomberglink.com/ leaders will examine Israel’s role as a centre for Tel Aviv, Israel CHOICES SUMMIT 13.11.2013 event/fuelchoices/ research and innovation in fuel choices Go4China is based on Cukierman’s successful Go4China 2013 11.2013 Go4Europe, which since 1997 has been bringing Israel Coming soon European investors to Israel Israel Business The annual Israel Business Conference is the leading http://www.globes.co.il/news/h 8-9.12.2013 Tel Aviv, Israel Conference 2013 economic event in Israel ome.aspx?fid=5440 The 2014 Tel Aviv Institutional The 6th Tel Aviv Annual Institutional Conference, 10.3.2014 Tel Aviv, Israel http://www.tlvii.com/ Investment Israel's largest institutional investors' event Conference The Marker and Veolia Conference on *5.2014 Environment, Professional conferences and High Tech Tel Aviv, Israel Coming soon Business and Environment Annual Conference on The conference provides broad information, comparable Wealth Management and independent range of topics relating to the world 10.6.2014 Tel Aviv, Israel http://www.israelwealth.com/ and Family Office the Family Office, Wealth Management and Family 2014 Business 62 Clean Tech The Event Dates Theme Location Link This year’s conference will emphasize the technologies that can serve as the key to a much more efficient exploitation of natural resources (Water, Soil, and 22- Energy & Materials). Bringing together Israeli & WATEC Israel 2013 Tel Aviv, Israel http://www.watec-israel.com/ 24.10.2013 international business executives, political decisions makers and leading researches, WATEC 2013 will be a showcase for the most advanced technologies and solutions from around the world. CleanTech 2014 is the 18th annual international event CleanTech 2014 - http://www.biztradeshows.com/ 18- for Clean Technologies: environmental quality, CleanTech Summit & Tel Aviv, Israel trade-events/cleantech- 19.2.2014 infrastructures and green building, renewable energy Exhibition israel.html and water technologies http://www.iati.co.il/event- IATI- CleanTech *7.2014 IATI- CleanTech Committee Israel item/355/iati-cleantech- Committee committee-meeting Aerospace The Event Dates Theme Location Link 6- Jerusalem, ICASM 2013 International Congress of Aviation and Space Medicine http://www.icasm2013.org/ 10.10.2013 Israel A true market place for the Israeli Aerospace industry, Aerosupply Israel 14- the AEROSUPPLY ISRAEL 2013 event will enables http://aerosupply.co.il/aerosupp Tel Aviv, Israel 2013 17.10.2013 companies to come together, make connections and ly/aerosupply2013/ identify new Israeli business partners The event will consist of an exhibition of aerospace http://www.technologies.co.il/b International Jerusalem, 26.11.2013 technologies and a professional conference with sessions eta/en- Aerospace 2013 Israel on various relevant matters. us/Conference.aspx?Id=64 The Ministry of Science and Technology, the Fisher http://www.clocate.com/confere The 9th Ilan Ramon Institute for Air and Space Strategic Studies and the Herzliyya, nce/The-9th-Ilan-Ramon- International Space 1.2014 Israeli Space Agency (ISA) are organizing and hosting Israel International-Space- Conference 2014 the annual International Conference on Space Research Conference-2014/32713/ 54th Israel Annual http://www.clocate.com/confere Aerospace Design, Manufacturing and Maintenance, Conference on 2.2014 Tel Aviv, Israel nce/54th-Israel-Annual- Aerodynamics, Fluid Dynamics and Aero acoustics…. Aerospace Sciences Conference-on-Aerospace- 63 2014 Sciences-2014/34421/ Major Israeli Aerospace companies, International Israel Space 2014 *5.2014 Tel Aviv, Israel Coming soon Business Forum, Pre-arranged B2B meeting… ICAF Conference and Symposium is one of the leading International conferences that is held exclusively for leaders from the http://www.clocate.com/confere Committee on entire aeronautical industry, laboratories and research nce/International-Committee- Jerusalem, Aeronautical Fatigue 6.2015 houses devoted to investigation on aeronautical fatigue on-Aeronautical-Fatigue-and- Israel and Structural and structural design, military specialists, experts and Structural-Integrity-ICAF- Integrity (ICAF 2015) luminaries from the related areas, and finally regulatory 2015/37341/ bodies. Defence The Event Dates Theme Location Link Miltech & Avionics Development of equipment and systems, technological http://www.technologies.co.il/b 28.8.2013 Israel 2013 innovations and innovations eta/Conference.aspx?Id=99 Military & Aviation 4.3.2014 Annual exhibition of military capabilities.% developments Avenue, Israel Coming soon 2014 http://www.clocate.com/confere nce/HLS-2014-Israel-s-5th- HLS 2014 4.2014 Israel`s 5th leading annual event for Homeland Security Avenue, Israel leading-annual-event-for- Homeland-S ecurity/37186/ The Israeli Zichron *5.2014 C5I as an Operational Force Multiplier Coming soon International C5I Ya'akov, Israel ISDEF 2013 - Israel Defence The 6th International http://tradeshow.free-press- Defence and Security Expo - See more at: release.com/exhibition.isdef- Tel Aviv, ISDEF 2014 *6.2014 http://tradeshow.free-press-release.com/exhibition.isdef- 2014-israel-defence-the-6th- Israel 2014-israel-defence-the-6th-international-defence-and- international-defence-and- security-expo.637957/#sthash.WTr1rvQn.dpuf security-expo.637957/ Security and Combat Tel Aviv, *6.2014 27th International Security Exhibition Coming soon 2013 Israel ** It is possible to be a sponsor, in some of those 64 Appendix 2 – Intellectual property law firms in Israel Reinhold Cohn Group Short description Senior Partner – Technology Ena Pugatsch Reinhold Cohn Group is the largest, earliest established intellectual property Senior Partner – Technology David de Vries firm in Israel offering premiere intellectual property expertise in filing, Senior Partner - Hi-Tech Ehud Hausman prosecution, renewals, protection, oppositions, opinions, due diligence, Senior Partner -Life Science & Chemistry Ilan Cohn, PhD enforcement, litigation, licensing, commercialization and evaluation, portfolio management and strategic counselling in all areas of intellectual property such Senior Partner – Trademarks Ronit Barzik-Soffer as patents, Trademarks, designs, copyrights, and plant breeders' rights etc.'. Senior Partner – Physics Svetlana Stadler Director of Operations & Business Ena Pugatsch, Russian speakers in leadership roles: Development China Ziv Rotenberg Svetlana Stadler Partner – Trademarks Shelly Zohar Partner - Life Science & Chemistry Mirit Lotan, PhD Ronnie Benshafrut, Partner - Life Science & Chemistry PhD http://www.rcip.co.il/english/default.aspx Partner - Life Science & Chemistry Tamar Morag-Sela Partner – Technology Yehuda Seruya Managing Partner Bossmat Gonen, PhD Luzzato & Luzzato Short description Senior Partner Luzzato Kfir The firm blends old world personal attention with state-of-the-art equipment Senior Partner Luzzato Ester and methods. Many efforts and considerable investments are devoted to acquiring, developing, constantly updating and improving office facilities and Partner Chechik Haim methods. Because of its particular requirements, the firm develops most of its Partner First Zadok software in-house, to provide its clients with continuously evolving Prof. Emmanuel sophisticated data management and solutions. Modern and diversified Partner Mnzorla equipment contributes to the ability of the firm to provide real-time services Partner Dr. Bruce Alpert combining efficiency with contained costs. Partner Dr. Thomas Gutmann Russian speakers in leadership roles: None http://luzzatto.co.il/ 65 Pearl Cohen Zedek Latzer Short description Senior Associate Tal Kaplan Senior Associate Idan Frydman Pearl Cohen Zedek Latzer (“PCZL”) is an international law firm with affiliated Senior Associate Yitzchak Chamudot offices in New York, Boston, Herzliya, Haifa and London. Representing Senior Associate Netta Nashlievich innovation-driven companies and their investors, we serve clients around the world, from Fortune 500 companies to start-ups. Senior Associate Sagit Sazgar Partner Kobi Meir Partner Amir Sadeh Russian speakers in leadership roles: Irena Shnaider Associate Irena Shnaider http://www.pczlaw.com/ Ehrlich & Fenster Short description Patent Attorney Benjamin J. Barish Patent Attorney Tina Bellomo Ehrlich & Fenster is a leading Israel based Patent Attorneys Firm. The Firm Patent Attorney Gail Bleiberg specializes in all matters concerning protection and prose- caution of Legal Counsel Amit Ehrlich Intellectual Property. Patent Attorney Gal Ehrlich Patent Attorney Maor Eichler Patent Attorney Maier Fenster Russian speakers in leadership roles: None Patent Attorney Paul Fenster http://www.ipatent.co.il/ Patent Attorney Michael J. Gerver Sanford T. Colb & Co Short description Founder Sanford T. Colb Sanford T. Colb & Co. is a full-service intellectual property and technology law firm, providing services relating to all aspects of intellectual property and Senior Attorney Eitan Shaulsky technology licensing. Senior Patent Attorney Daniel Goldstein Russian speakers in leadership roles: None Senior Patent Attorney Dr. Hershel Ginsburg http://www.stc.co.il/index.asp 66 Borochov Korakh & Co Short description Partner Eliav Korakh The firm of Borochov Korakh & Co. is a full service IP and law firm, whose advocates and patent attorneys actively combine keen technological Partner Eli Borochov proficiency with deep legal acumen. The Firm offers a variety of services in the fields of Commercial Law, High-Tech Law, Intellectual Property Law, Corporate Law, Tender Law, Labour Law, Communication Law and Entertainment Law. Services provided include ongoing corporate legal support, full coverage of, M&A, procurement transactions, bidding and tenders, and litigation before all levels of courts and tribunals. Russian speakers in leadership roles: None http://www.teclaw.com/ Soroker Agmon Short description Senior Patent Eran Soroker Soroker Agmon intellectual property law firm is now ranked among Israel’s top ten intellectual property law firms. Soroker Agmon provides comprehensive Senior Patent Jonathan Agmon representation for all your intellectual property and portfolio management Partner & CEO Ady Nordman needs. Our mission is to provide top-notch intellectual property services in Partner Adi Barkan-Lev Israel and abroad. Partner Jenny Mazor Russian speakers in leadership roles: None Partner Hagar Raved http://www.ip-law.co.il/ Ben-Ami & Associates Short description Founder and Senior Partner Paulina Ben-Ami Ben-Ami & Associates has a team of Patent Attorneys and technical advisors that can handle and provide advice on intellectual property matters in most Founder and Senior Partner Issachar Ben-Ami technological areas, particularly in all fields of Life Sciences and Chemistry Partner Avihu Avital including, among others, inventions in the pharmaceutical, chemistry, organic Partner Gad Benett chemistry, biochemistry, molecular biology, nanotechnology, material chemistry, diagnostics, cosmetics, agricultural and veterinary areas, as well as in a variety of High-Tech fields, such as Telecommunications, Computer software, Computer hardware, and many other areas. Russian speakers in leadership roles: None http://www.benami.com/index.php 67 Edison Patent Attorneys Ltd. Short description Founder Eng. Reuben Berman Edison Patent Attorneys Ltd., Israel, specializes in intellectual property, including registering patents, designs and trademarks. Office specializations Patent Attorney Haim Branstater include computer technology, telecommunications, optical engineering, Consultant Yaniv Gitelis mechanical engineering, indoor inventions, innovative business methods, Biotechnology, genetic engineering, and more. Russian speakers in leadership roles: None http://www.edison-patent.com/?lat=en Nathan & Associates Short description Head Takya Nathan The firm is specializing in the drafting and prosecution of highly complex high- Agent Menahem Natan tech/medical device patent applications as well as in IP consulting to Of Counsel Dnna Parnes inventors, companies and venture capital firms. Consultant - Medical Alexandra Nathan Consultant – Business Vicki Nathan Russian speakers in leadership roles: None Paralegal Daniela Nathan http://www.natpatent.com/#! 68 Appendix 3 – Small series producers, prototype and Industrial design experts R.H. Technologies Short description Chairman of the Board Jacob Rosenberg External Director Orly Silberman R.H. Technologies is a public company, advanced electronics contract manufacturing group, External Director Zvi Cohen offering world-class turn-key solutions of design, engineering, manufacturing and Director Arie Rahav subcontracting services, for electronic production assemblies and systems CFO Eitan Haimovich to global customers in a diverse range of industries. Internal auditor Asher Matityahu CEO Kobe Zaosnitzr Russian speakers in leadership roles: None Gedaliah Member of the Board Hammerman http://www.rh.co.il/ Human Resources Rotem Hiimzon TAGA Short description CEO Amit Barak VP Engineering Miky Heimann Taga is an award-winning product design and development firm, specializing in VP Marketing Hagai Barak medical devices, consumer products and professional equipment. Our industrial design and mechanical engineering teams turn dreams into winning products Sales & Business Development Director Benny Kiron Industrial Design Director David Altit Russian speakers in leadership roles: None Administration and http://www.tagapro.com/?gclid=CMK3quCnvrcCFUfLtAod6WQANw Logistics Manager Shlomit Rosenzweig Gizmo Engineering Short description Beng & Founder Nimrod Rotem GizmoMaker.com is a full service engineering firm, specializing in working with Manager Oleg Zokuv and start-ups to make their inventions and product dreams come true. Russian speakers in leadership roles: Oleg Zokuv http://www.gizmomaker.com/ 69 Objet Short description Chairman Scott Crump Objet is a leading international company in the three - dimensional sphere, which Chairman of the board. Elhanan Iglom serves for building a proto-type models. CEO David Rice Russian speakers in leadership roles: None CFO Erez Simha http://objet.co.il/ * Merged with Strarasys in 12.2012 ITICS Ltd Short description Founder Maor Lugasi Ayetix Ltd.'is engaged in building a prototype, development of patents and products, providing full support to entrepreneurs, private and corporate companies. Providing close support to all relevant processes, including advice on patent registration system, development and production of the product, marketing platform and more. Russian speakers in leadership roles: None http://www.patent-il.com/%D7%90%D7%91- %D7%98%D7%99%D7%A4%D7%95%D7%A1/ ZIV-AV Group Short description Founder Dr. Amir Ziv-Av Itzhak Taff Itzhak Taff Cesar Liwski Cesar Liwski VP R&D and Active President Dvir Brand ZAE LTD is an engineering firm that focuses on the manufacturing of models, offers consulting services, and provides innovative solutions for the creation and CEO Ziv-Av Project Yoav Adler delivery of technology-based products. Miki Reter Miki Reter Ofer Rotem Ofer Rotem Ajay Singh Tomer Ajay Singh Tomer Senior Projects Manager Alon Shani Senior Projects Manager Dimitri Vishnevski Russian speakers in leadership roles: Dimitri Vishnevski http://www.zivaveng.com/ Schneider Gadi Schneider Gadi 70 GoalNTech Short description CEO Ian T. Clark GoalNTech apply advanced methodologies to solve an array of complex technical challenges. We specialize In programming MCU, CPU, CPLD & FPGA, designing RF systems, board design and testing as well as, importing goods for industrial organizations and being leaders in providing state of the art technological solutions to a variety of companies. Russian speakers in leadership roles: None http://www.goalntech.com/ ARAN (plastic industry) Short description Chairman of the Board Avraham Zakai Aran specializes in three main areas: CEO Ran Stav Product development services from idea to final product and production CFO Avi Chai Production equipment and machines for the plastic industry Aran GreenTech plans, builds, operate and finances photovoltaic power plants Russian speakers in leadership roles: None http://www.aran-rd.com/index.php?goto=bep&page_from= Vision Line Ventures - VLV Short description CEO Amir Kashi VLV is a leading engineering development company in an industry specializing in: Development of technical products Means of production and automation. Alternative energies. Russian speakers in leadership roles: None http://www.vlv.co.il/?lat=en 71 Appendix 4 – Technology Transfer Companies of Israeli Academic Institutions Yissum Management Directors Dr. Aharon President & CEO Yaacov Michlin Chairman of the Board Schwartz Head of the Authority of Research CFO Sharon Cohen & Development Prof. Isaiah Arkin Director General, The Hebrew VP, Head of Business Development - Healthcare Shoshi Keynan University Ms. Billy Shapiro VP Business Development, Healthcare Ariela Markel VP, Head of Business Development Agriculture & Environment Michal Levy VP, Head of Research Collaborations Itzik Goldwaser VP, Head of Business Development Computer Science & Director of IT Tamir Huberman VP Business Development – Chemistry & Physics Dov Reichman General Counsel Bob Trachtenberg VP Intellectual Property Renee Ben-Israel Russian speaking: None Link http://www.yissum.co.il/home 72 Ramot Management Directors CEO Shlomo Nimrodi Chairman Dr. Giora Yaron Prof. Yair VP Business Development, Life Sciences Irit Ben Chlouch Aharonowitz VP Marketing and Strategy Tamar Raz, Ph.D Director, Business Development, Physical Sciences Larry Love Manager, Business Development Alisa Band Director, Business Development for high-tech, telecom, engineering and computer sciences. Oren Calfon Director, Industrial Research Services Orit Bialy Weinberg Chief Financial Officer Avi Nataneli Shulamit Hirsch, Director, Intellectual Property Ph.D. Keren Primor General Counsel Cohen Larissa Director, R&D Budget & Control Shniderman Russian speaking: Larissa Shniderman Link http://www.ramot.org/ 73 T3 Management Directors Benjamin Soffer Manager Adv Chief Intellectual Property Officer Ofir Alon Adv Patent Portfolio Administrator Tali Bergerfroind Roï Eisenkot BSc Director of Business Development MBA Director of Business Development Inbal Lev BSc LLM Joseph (Yossi) Director of New Ventures Nathan MSc Tzachy (Isacc) Tal Director of Business Development PhD MBA Chief Operating Officer Ilana Shalev MSc Patent Portfolio Administrator Tami Zaks-Carmel Legal Counsel Nili Weitzman Adv Russian speaking: None Link http://t3.technion.ac.il/ 74 Yeda Management Directors Prof. Mordechai CEO Mr. Amir Naiberg Sheves Chief Business Officer Mr. Shay Marcus Prof. Haim Garty Abraham Ben- Chief Intellectual Property Officer Dr. Ruth Granoth Naftali, Adv Adv. Gil Granot- General Counsel Mayer Chief Financial Officer Mr. Meir Fast Comptroller Mr. Yaacov Cohen Senior Licensing Director Dr. Avital Levy-Lior Dr. Galit Mazooz- Licensing Director Perlmuter Adv. Galit Legal Counsel Schneider Legal Counsel Adv. Galit Yosha Russian speaking: None Link http://yedarnd.com/Hp.aspx 75