ISRAEL Global Center for Breakthrough

www.investinisrael.gov.il Bright Source

Dear Reader, is recognized as being Israel’s ability to continuously produce high- at the forefront of high- quality innovative products is fundamental to tech innovation, backed by a its capacity to compete globally and the Israeli highly educated and creative government considers it a high priority to ensure workforce and a sound and support Israel’s future competitiveness. infrastructure. Some of the I am confident that the vitality of the Israeli market world’s largest multinational will continue to position it as a global destination corporations developed their for foreign investment and invite you to take part key breakthroughs in Israel, in our future expansion. and the ongoing influx of new companies serve as a sign of the vibrancy of Israel’s industrial research and development. Israel enjoys the highest percentage in the world Sincerely, of engineers in the workforce and one of the Binyamin (Fouad) Ben Eliezer – highest ratios of university degrees and academic publications per capita. Israel’s finest innovations were developed through the combination of necessity, proven problem solving skills and creativity. Due to the close-knit web of Israeli society, the synergetic nature of Israeli industry Minister of Industry, Trade and Labor allows for cross-sectoral adaptations of technology from the security sector to life sciences, IT and communications. Highly trained graduates of the IDF applied cutting edge defense technology to market-changing civilian applications.

3 Intel

Dear Investor, Israeli Innovations Israel has a long track record of An ability to quickly respond to market demands market-creating, profit driving and identify future needs as well as to determine Merging Necessity & Ingenuity Striving for SUCCESS breakthrough innovations and provide solutions to global needs across which have positively impacted different sectors; The technological skill of Israeli life worldwide. It is difficult engineers, who focus on sophisticated and niche- to imagine a world without specific solutions; and a start-up culture based on Cleantech IP Telephony invented by resilience and underpinned by a solid network of Hybrid solar-gas powered technology is the most cost effective solar thermal technology in the world...... 6 VocalTec, ZIP compression VCs and technological incubators. technology developed at the Agrotech We invite you to see how Israel’s technological Technion, Disk-on-Key memory Drip irrigation has achieved the highest ratio in the world of crop yield per water unit...... 7 breakthroughs are sustainable, unique, creative, created by M-Systems, or drip irrigation pioneered entrepreneurial, sophisticated, and secure, and why by Netafim. Life Sciences it is the competence of Israeli experts that ensures The ingestible pill camera gives doctors an insider’s perspective...... 8 How does Israel manage to stay on top of the country’s success. technology in a variety of sectors, including People Cleantech, Agrotech, Life Sciences, Information One of the highest per capita rates of patents filed...... 9 Technology, Communications and Homeland Security among others? Rachel Roei – Information Technology Israel’s success hinges on several important Flash Disk technology transformed data storage...... 10 elements, including: Intensive R&D and strong Director of the Investment Promotion Center, Communications synergies between academia and industries that Ministry of Industry, Trade and Labor Instant communication (ICQ) revolutionized global contact...... 11 feed continuous innovation as well as create repeat entrepreneurs; Homeland Security Military technology is adapted into breakthrough innovations across various sectors...... 12

Government Support...... 13

R&D Success Stories - Israel...... 14

R&D Success Stories - MNCs...... 15

4 5 Bright Source Sustainable Unique

Israel…is driving its six-decade quest to coax more from the The wilderness and arid land soil, water, air, and sunlight shall be glad, the desert shall rejoice than do most other nations and blossom like the tulip. on earth. …Israel leads the world by recycling 70% of its (Isaiah 35:1) wastewater, three times the figure for No. 2 Spain.

Business Week, May 7, 2009

CLEANTECH Greening the World AGROTECH Feeding the World

Blessed with ample sun light but challenged by water shortages, Israel is continuously developing alternative Israeli scientists have expanded the world’s food supply through innovative irrigation, growing and harvesting technologies that generate significant energy from the sun as well as from a host of other renewable energy techniques as well as bio-engineered crops and livestock. This transformation has placed Israeli agro-technology at sources such as wind, biomass etc. Israel’s holistic approach to water management that combines proven the forefront of the world food revolution. technologies with new and efficient water conservation techniques, make it the world’s #1 water recycler.

Israeli Cleantech Achievements Israel’s Agro-tech Highlights Geothermal Energy Water Management Irrigation Global geothermal leader Ormat’s breakthrough Desalination turbine design converts geothermal and solar-heated Drip Irrigation Seeds steam into electricity. Israel initiated seawater reverse osmosis (SWRO) helped achieve 70%-80% of water efficiency in Some 40% of European tomato greenhouses use desalination and is home to the world’s largest SWRO Energy from Waste agriculture -the highest rate in the world- versus 40% seeds of a long shelf-life hybrid created in Israel. desalination plant, annually producing 130 million with open irrigation; Israel controls over 50% of the The world’s most popular varieties of long-shelf- cubic meters, the most cost- efficient operation of its The ArrowBio process eliminates the need for prior world market. life cherry tomatoes were developed by Prof. Haim kind in the world. separation of municipal solid waste (MSW) and has a Rabinowitch and Prof. Nachum Kedar of Hebrew 90% recovery rate. Saline water irrigation University. IT Solutions/Green IT Emefcy produces low cost electricity ($0.10/kWhr) Warm, geothermal saline water is recycled from Bio/Organic agriculture TaKaDu and hydrogen in a bio-electro-chemical process from uses sparse data from existing sensors and wastewater treatment through Microbial Fuel Cell fishponds to irrigate a variety of crops, from folds that in with weather data, acoustic data, and GIS technology. greenhouse tomatoes to grapes grown in desert About 100,000 ha (247,105 acres) of horticulture are data to create a smart water grid, allowing the water conditions. under an Integrated Pest Management (IPM) regime, utility to improve its ability to plan and forecast, Applied Cleantech recycles sewage to produce a material reducing pesticide use by 30 – 40%. saving money and resources in the process. called recyllose, which can then be used to produce Greenhouse technologies between 120 and 135 gallons of ethanol per ton. Aquaculture Renewable Energy Spectrum-optimized plastic films and heating, Fossil Fuel Replacement/Bio Fuel ventilation and structural systems enable the Closed water systems developed in Israel have led to Solar Energy growth of more than 3 million roses, and 300 tons a 40-fold production increase compared with open- TransBioDiesel’s enzymatic process increases the pond systems from 0.5kg to over 20 kg per cubic of tomatoes per hectare per season, quadruple the Israel’s Luz, today known as BrightSource, pioneered profitability of biodiesel production from recycled yields of open fields. meter. greases, animal fats and plant oils by 15%-25%, while solar-thermal technology and built the world’s largest Dairy Desert Agriculture solar plant of its kind in the Mojave desert. producing a chemically clean by-product. Flat plate solar systems for water heating were Energy Efficiency The Isr aeli cow has the world’s highest milk yields. In Recovery of 35-60ºC geothermal water captured perfected in Israel in the 1950s. Israel is the world 2008 the average annual per cow yield was 11,461 kg underground in the Arava desert is used to heat leader in the use of solar energy per capita with Phoebus Energy’s hybrid heat pump system integrates of milk. greenhouses and in fish farming; 10% of Israeli fresh 85% of households using solar thermal systems, the with existing oil-based systems saving 50%-70% of oil, produce is desert-grown. highest per capita use of solar energy in the world, and reducing pollution by 80%-90%. and 4% of Israel’s energy capacity. Powersines Lighting Energy Controllers (LEC) enable SolarEdge boosts PV system output to enable cost dynamic voltage regulation and power consumption efficient production of up to 25% more energy from optimization that save between 20%-35% of electricity any PV installation. in lighting. 6 7 Regentis Biomaterials Ltd. Galil Medical Creative Capable

We were attracted by the outstanding research and For Microsoft, having an R&D researchers here [in Israel]. center in Israel has been a great experience… The quality of the people David M. Bowser, Vice President – Corporate here is fantastic. Office of Science & Technology, Johnson & Bill Gates Johnson

LIFE SCIENCES Healing the World PEOPLE Israel’s Primary Resource

Breakthroughs in Israel’s vibrant life sciences industry are often a result of several converging Given its arid climate and few natural resources, it is Israel’s intellectual capital that provides a fertile technologies including physics, mathematics, computer sciences, and nanotechnology among others. Israel ground for its start-up culture. is 1st in total number of granted patents per capita in the medical device area and 4th for Bio-Pharma, with over 1,000 companies in those fields.A pioneer in stem cell research and therapeutics, Israel is the 2nd leading publisher of stem cell research, in absolute numbers, after the U.S.

Israeli Firsts in Life Sciences Important Factors supporting innovation Drug discovery Medical devices Immigration “Brain Gain” Israel’s 7 universities are ranked among the world’s Multiple Sclerosis, Central Nervous Cryotherapy technology by Galil Medical freezes and Israeli innovation has been boosted and top institutions, and their respective technology System disorders ablates benign cancerous tissue. internationalized by waves of risk-taking immigrants, transfer organizations (TTO) promote the constant including an influx of science and engineering generation of breakthroughs. Israel’s Weizmann’s Rebif, developed by Prof. Michel Revel at the Stem cells talent from the former Soviet Union. Relative to its Institute of Science’s commercial arm “Yeda” and Weizmann Institute of Science and Serono, was population, Israel is the largest immigrant-absorbing Hebrew University’s technology transfer arm “Yissum” the first MS treatment to be proven effective on all In stem cell research, Israel was the first to show nation on earth. are among the highest earning university TTOs in the three key measures of treatment effectiveness: MRI differentiation of human ES cells and generation of world. lesion area and activity, relapse rates and disability human embryonic bodies. Community and Networking progression. Nobel Prize Winners VesCell adult stem cell therapy by TheraVitae is a The high ratio of scientists and engineers living in Copaxone, created by Professors Michael Sela and revolutionary new treatment for heart disease that close proximity facilitates cross fertilization of ideas Five Israelis have won the Nobel prize in Chemistry Ruth Arnon of the Weizmann Institute and Teva, actually rebuilds heart tissue using the patient’s own among different clusters of experts nationwide. and Economics since 2002. Three Israeli academics showed a reduction of about 80% fewer relapses for stem cells thus enabling the patient’s own body to have won the Nobel prize in Chemistry: Ada E Yonath sufferers of RRMS who took the drug continuously heal itself. Expertise in 2009 for her studies of the structure and function over 10 years. Pharmacogenomics of the ribosome and how cells build proteins; Aharon The Israeli Defense Forces serve as a technological Bone Repair Ciechanover and Avram Herhsko in 2004 for their incubator for ideas and a meeting ground for experts discovery of ubiquitin-mediated protein degradation. Most micro RNAs were discovered and identified by across the entire spectrum of disciplines. Gelrin, developed by Regentis Biomaterials of Haifa, is Rosetta Genomics. Robert Aumann won the Nobel prize in Economics in 2005 for his work on conflict and cooperation an injectable, biosynthetic gel used to stimulate bone Academic Accomplishment repair. Stents through game-theory analysis, and Daniel Kahneman in 2002 for his work on behavioral economics. Parkinson’s Israel enjoys the highest percentage in the world of Medinol is a pioneer and an expert in the field of engineers in the workforce and the highest ratios of Cardiac stenting, the inventor of the flexible closed university degrees and academic publications per Azilect/Rasagiline developed by Teva and the cell stent design, and a leader in innovating stent capita. Israeli academia are the engine behind Israel’s Technion, works by blocking the breakdown of designs and manufacturing technologies worldwide innovation. dopamine in the brain. for heart catheterization. Alzheimer’s Diagnostics Exelon, originated from research at Hebrew University The ingestible pill camera developed by Given and developed by Novartis, postpones the worsening Imaging helps doctors diagnose and digestive of Alzheimer’s symptoms for 6 to 12 months in over disorders. 50% of patients. 8 9 Intel Israel Aerospace Industries (IAI) Entrepreneurial Sophisticated The Israeli army not only works Israel is a country that is hard to keep the country at the cutting edge hard-wired to compete in a flat world. of technology, it also trains young Israelis It has a population drawn from 100 different (who are conscripted at 18) in the virtues of countries, speaking 100 different languages, teamwork and improvisation. It is strikingly with a business culture that strongly encourages common for young Israelis to start businesses individual imagination and adaptation and with friends that they met in the army. where being a nonconformist is the norm. Add to that a high tolerance of risk, born of While you were sleeping, Israel has gone from a long history and an ever-present danger oranges to software, or as they say of attack, and you have the makings of around here, from Jaffa to Java. an entrepreneurial firecracker. Times, June 8, 2008 The Economist, March 2009

INFORMATION TECHNOLOGIES (IT) Wiring the World COMMUNICATIONS Linking the World

60 years of innovation and adaptation of military applications for civilian purposes have resulted in the Bolstered by substantial aerospace and national security programs, Israel continues to lead the global emergence of several world renowned IT powerhouses in Israel, along with hundreds of smaller companies communications market in cellular technology and telecom equipment. The country’s strength in and over 1,000 active Israeli IT start-ups. communications also stems from a strong research oriented university base.

Israel’s IT Firsts Israel’s Communications Firsts

Data mining Electronics Transmission devices Telephony

Storage Semiconductors Voice, fax and call processing functions were Technology enabling two calls on the same phone integrated into a single system by Comverse. line was developed by ECI Telecom. Mellanox, a leader in the data interconnect market Centrino, Core 2 Duo, by Intel Israel were Remote access was first developed by MRV. The 4G chipsets for the next generation cellular for Fortune 500 data center servers and storage revolutionary in energy consumption and cost company was also first with 10/100 dual speed LAN infrastructure are developed by industry leader systems, is the choice for the world’s most powerful efficiency. switches, and first to develop Wavelength Division Comsys. supercomputers. Flash memory Multiplexing (WDM) technology in residential access Billing Internet applications networks. USB-Flash Drives were developed by M-Systems, Instant communication and chat, ICQ were introduced Prepaid and postpaid billing were converged by Converging communications in a pocket-sized which was acquired by SanDisk, and are used for by Mirabilis. Comverse. package, Fring offers the world’s first user-centric set portable storage all over the world. of services for mobile devices. Mobile WiMAX compliant ASIC was first introduced by VOIP Saifun’s Quad NROM 4-bit-per-cell technology Runcom, a pioneer of Orthogonal Frequency Division Testing boosted Non-Volatile Memory (NVM) technology Multiple Access (OFDMA), the heart of 4G. by doubling the storage capacity of conventional VoIP technology Optical communications were first The H.323 Protocol, enabling voice, picture and data commercialized by Vocaltec. NICE Systems was the Tesnet Software Testing, is a global developer of memory cells, providing a simpler architecture, and lowering production costs. to be transmitted via the Internet was developed by first to introduce VoIP recording technology. proprietary testing software for Euro, ERP, and Data . Warehouse. Printing Mercury Interactive’s unique Software Performance technology allows its clients to constantly keep The world’s first commercially successful digital an eye on the user’s experience of their business offset color printing press was launched by HP Indigo. applications. Fiber optics Security Gigabit Passive Optical Networking (GPON) was FireWall-1 and FloodGate-1, the world’s first security originally developed by Flexlight. systems, were developed by . Electro-optic inspection systems Commtouch’s Recurrent Pattern Detection (RPD) technology protects against spam and has been ’s unique inspection and imaging solutions licensed by over 80 security and messaging vendors for the printing circuit board and flat panel display and providers. industries are used globally in electronic devices across the board. 10 11 Israel Aerospace Industries (IAI)

Synergetic Israelis are very big on innovation, which is key for any corporation today, including ours. Israel’s research institutions, There is a huge amount of innovation government, industries, and venture on all levels in Israel, and the workforce capital sector collaborate to nurture is well educated and motivated. innovation. Like a good hockey team, they are playing a “shots on goal” game. IBM Israel, 2009 They’re building a pipeline to churn out hundreds of new ideas for businesses We’ve found a huge pool of every year, knowing that only a few will scientists, engineers and mathematicians ever fly in global markets. full of innovative ideas. Israelis tend to think ‘out of the box. Globe & Mail, July 24, 2008 Google Israel, 2009

HOMELAND SECURITY Securing the World GOVERNMENT SUPPORT

Israel’s need for self-reliance has created a diversified and cutting edge security industry, adding innovation to existing technologies as well as developing new ones. Incentives & Benefits The Israeli government actively supports business In 2000 Israel also joined the pan-European, inter- development through two main vehicles, namely (1) governmental “EUREKA initiative,” which aims to the Law for the Encouragement of Capital Investment coordinate efforts of governments, research institutes (the Investment Law), and (2) the Law for the and commercial companies concerning innovation. Israeli Security Achievements Encouragement of Industrial R&D. Israel was elected to serve as EUREKA chair in 2010. Through EUREKA, which comprises 40 member Avionics/Aviation Security Optronics R&D Support countries, Israel offers funding for up to 50% of eligible projects. Long Range Reconnaissance and Observation System Passive Electro- Optic Radar system – an intrusion The Office of the Chief Scientist at the Ministry of (LORROS) by , are deployed through detection, recognition and tracking system by Magna Industry, Trade and Labor provides a variety of The Israeli government founded the Technology SBInet in the US BSP Ltd. support programs on an annual budget of about $400 Incubator program in the early 1990s. Today million. The main support program is the R&D Fund, there are 24 incubators across the country, all of Israel developed the first modern Unmanned Aerial Thermal imaging which offers R&D grants of up to 40% of the approved which have been privatized. The incubators offer Vehicle (UAV). The Predator drone by Israel Aerospace R&D program. Biotechnology and Nanotechnology are government funding of up to 85% of early stage Industries (IAI), is used for border patrol and in anti- Elbit subsidiary Elop’s Forward Looking Infrared entitled to a funding level of 50%. Companies located project costs for 2 years. They nurture the companies drug operations worldwide. technology (FLIRs) is used by the US Marines, NATO, in priority areas, i.e. the Galilee in the north and the from seed to early stage minimizing the risk to Israel’s Arrow Theater Missile Defense System, the German DoD and other leading armed forces Negev in the south of Israel, are entitled to a funding the investor. More than 1100 projects have so comprised of different types of anti-ballistic around the globe. level of an additional 10%. far graduated from the incubators, with over 45% missiles, jointly developed by Rafael Advanced successfully attracting additional investments from Thermal IFF (Identification Friend or Foe) Other programs operated by the OCS include bi- private and institutional investors. Defense Systems, IAI, and Boeing, can cope with a national funds (joint R&D programs with foreign simultaneous barrage of missiles at every possible emitters by Thermal Beacon use existing thermal vision to identify own forces. counterpart), which are entitled to financial assistance Investment Support altitude and trajectory. of 50% of the Israeli company’s R&D costs. World Civil Aviation Biometrics The Investment Law enables foreign companies The Global Enterprise R&D Cooperation Framework to benefit from a company tax rate of only 10% (if encourages cooperation in industrial R&D between More than 40 airports in the U.S. alone are protected BioDynamic Signature by IDESIA identifies people the total investment in the company is at least 5 multi-national companies (MNCs) and Israeli start-up million shekels), and investment grants of up to by Israeli know-how and equipment, and many based on unique physical features (heartbeat, companies by sharing the high risks and enormous international airlines have upgraded their security, nervous system activity). 24% (available only in priority areas). The tax benefit costs inherent in high-tech development. Israeli period is for 10 years. based on surveys and reports by Israeli experts. Smart Cards companies can receive a grant of up to 50% of their approved budget. The MNCs can contribute their share A new incentive program offered by the Ministry Maritime Security CryptoCell, CryptoFlash by Discretix offer a complete in cash or in kind. Multinationals that have so far provides employment grants for R&D centers and security platform for mobile devices. taken advantage of this program include: Coca Cola, large enterprises that are located in the Galilee or The Protector, an unmanned naval patrol vehicle GE, Oracle, Microsoft, IBM, Intel, Merck, BT and others. Negev. To qualify, large enterprises must employ at developed by Rafael safeguards maritime assets. least 100 workers. The program offers a 4-year grant Training An additional source of international funding for R&D Critical Infrastructure protection scheme covering on average 25% of the employer’s is through the Seventh Framework Program (FP7) cost of salaries for each new employee. Israeli companies and national police have trained for R&D of the European Union, of which Israel is a and assisted Police and Special Forces as well as For more details and information about other Electronics participant and is the first non-European State fully support programs please contact: Airport personnel in the USA, Europe, South America, participating. Funding grants are up to 50% of the NiceVision IP Video Surveillance Solutions by NICE Southeast Asia and Africa. approved project budget for industrial companies, and [email protected]. Systems detects, verifies, resolves and investigates up to 75% for SMEs. security events. 12 13 Israel’s High-Tech Success Story Merging components in profit-driving synergy

Experienced Incubators 2nd time Entrepreneurs Government Support Defense

University Corporate Computer Science R&D Students Availability of Existing Technical People & Global Technology Management Hi-tech Leading Companies Infrastructure Academic Foreign Expertise Institutions & Technology Research Firms

Corporate Spin-Offs Entrepreneurial Seasoned VC Community Culture Immigration

ISRAEL a Beta Test Site for Global Solutions

1st in the world in expenditure on R&D as a percentage of GDP (IMD 2009) 2nd in the world for availability of scientists & engineers (IMD 2009) 3rd most accessible VC Industry in the world (IMD 2009)

Israeli R&D has inspired revolutionary innovations Many Multinationals profit from for numerous Israeli companies: Israeli R&D

Medical devices Cardiac stents Medinol through local R&D centers: through acquisitions: Multislice CT scanners Elscint Microsoft Acquirer Amount Sector Company Date Drug discovery Copaxone Teva (mln) Plant genetic Long-life Cherry Hebrew University Built its first R&D facility outside the US in Israel in engineering HP 4500 ICT Mercury Jul 2006 Tomatoes 1989. It recently established a new communications Irrigation R&D center in Herzliya. B. Hathaway 4000 Metal Cutting Iscar May 2006 Drip irrigation Netafim Water reclamation Cisco SanDisk Corp 1550 ICT M-System Jul 2006 Effluent filtration and Mekorot reuse J&J 438 Life Sciences Omrix Nov 2008 Water desalination Established its first R&D facility outside the US in Seawater reverse IDE Israel, which is also its second largest design center 418 Solar Energy Solel Oct 2009 osmosis outside the US employing over 700 engineers. Medtronic 325 Medical Device Ventor Feb 2009 Communication Israel is a foundry of Voicemail Comverse innovation for the world. Motorola S. Jude 300 Intra Body Nav Mediguide Dec 2008 Software security Firewalls Checkpoint The country’s competitive advantage Medical VOIP Voice over IP Vocaltec derives from being a beta test site The Israel facility was established in 1964 and is the IBM 225 Software Guardium Dec 2009 Printing company’s largest development center worldwide. Digital printing HP Indigo for global solutions... Comprised of several local business groups and Sigma 184 Semuconductors CopperGate Oct 2009 Internet Designs Inc Instant messaging Mirabilis, Ubique The combination of improvisation and subsidiaries, Motorola employs about 3,000 people. Pharmacogenomics discipline yields tremendous results in new Roche 160 Life Sciences Merdingo Apr 2010 micro RNA Rosetta Genomics IBM Stem cells products and shortening time to market Vector Cap 160 Software Aladdin Jun 2009 HeSC Technion for innovative solutions in both Began operating in Israel in 1950 and established its and many more. new industries and those that are first R&D center outside the USA in Haifa in 1972, Invest in Israel, the Investment Promotion Center of Israel’s Ministry of Industry, Trade and Labor is reinventing themselves through employing over 1000. Intel the governmental focal point for foreign investors. new technologies. Invest in Israel works closely with potential and Glenn Yago, Ph.D., Director, Had set up its first design and development center current investors throughout the investment Capital Studies, Milken Institute outside the US in Haifa in 1974 and now has 4 process and serves as a source for investment R&D facilities and 2 manufacturing centers in related information. Israel, employing 6,500 Israelis. Intel develops & manufactures Centrino, Cure 2 Duo and most of its mobile WiMAX Chipset in Israel. 14 15 5 Bank of Israel Street, Jerusalem 91036 ISRAEL Tel : +972-2-6662607 [email protected] www.investinisrael.gov.il August 2010