BEIC-Austria-Entrepreneurship at Israel and Technion Oct-2010

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BEIC-Austria-Entrepreneurship at Israel and Technion Oct-2010 Israel A start-up nation 1 Israel (2009) 7.4 mln inhabitants Technion GDP $ 195 bln (Estimate) GDP per capita $ 26,351 Source TAMAT University of Haifa 100 km Bar-Ilan University Tel-Aviv University Weizmann Institute of Science The Hebrew University of Jerusalem • 24 incubators • over 2000 start-ups • over 80 VC/PE’s Ben-Gurion University • 68 companies on Nasdaq • leading multinationals • matured Israeli high tech including service providers 2 MBA-Entrepreneurship-2010 • Office of Chief Scientist2 Phases in Israel’s economic development 1948-1968 • Export mainly agriculture • Building the science based capabilities: - Technion 1924 - Hebrew University 1925 - Weitzman Institute 1934 • Innovations and entrepreneurship in Agriculture (Kibbutz) and the Defense area 3 Phases in Israel’s economic development 1969-1992 • Arms embargo after six day war in 1967 • Building defense-industry-university complex - 65% of R&D defense related - Defense as % of GDP grew to 25% in 1980 - Indigenous industry for planes, tanks, electronics warfare • Spin-offs from defense e.g. Elscint, Scitex, Orbotech • Multinationals entering Israel (e.g. Intel, Motorola) • Due to historical labor-socialist tradition deep antagonism toward individual entrepreneurship • Establishment of Office of Chief Scientist in 1968 4 Phases in Israel’s economic development 1993-2010 • 1993 tipping point for take-off of high-tech sector • High-tech, now already 34% of industry, drives growth • Tech-entrepreneurs are the new heroes 5 The Hi-Tech Growth in Israel New High-Tech VC/PE raised in Companies Mln dollars average per year average per year From 1969- 1992 7 7 From 1993-2005 307 1,214 6 Today: The Second Silicon Valley Nr. Of VC start-ups Investments VC invested ( 2006) (2004) Silicon Valley 855 $ 12,4 bln Israel 428 $ 1,4 bln New England 381 $ 2,8 bln Source: PriceWaterhouse Coopers, IVC,E&Y 7 Israel Is the Most Active European VC Fund Raising Country Per capita VC funds raised (2000) Source: IVC & Israel: $600 per capita VentureSource Europe: $30 per capita (20x) 8 Converging factors acting as tipping point the for hi-tech growth in Israel during the 80’-90’s • Availability of technology in defense sector and universities • Dramatic reduction of defense expenditure and defense industry employment ( Lavi employed directly 4,500 in in 1987; Defense 25,2% of GDP in 1980) • FDI by high tech multinationals in R&D (spillovers) • Influx of Russian scientists needing jobs • Supporting government ( OCS) • Double digit growth in engineering/science graduates • Annual inflow of abt.800 experienced engineers from IDF • Influx of US VC capital and Yozma funds • The Israeli culture 9 R&D expenditure Israel Holland USA China R&D as 4,8% 1,9% 3,0% 1,3% % of GDP (ranking) (1) R&D in 4,909 7,281 274,759 $ mln (ranking) (20) (13) (1) 10 MBA-Entrepreneurship-2010 10 Source: IMD Competitiveness Yearbook 2004 Universities in TechnionIsrael University of Haifa Haifa Tel Aviv University Tel Aviv Bar Ilan University Rehovot Weizmann Institute Jerusalem Hebrew University of Jerusalem Beer Sheva Ben Gurion University 11 11 Multinationals in Israel Haifa Yokneam Yakum Herzliya Outside of healthcare, multinationals with significant activity in Israel include: Tel Aviv Rehovot Jerusalem Kiryat Gat Over 110 foreign companies have established R&D centers in Israel, collectively employing over 35,000. Source: Invest in Israel 12 12 . Office of the Chief Scientist Chief Scientist Activities in Israel International Activities R&D Fund Bi-National Funds Magnet Programs U.S-Israel Science & Technology Commission Generic R&D European Union Seed Fund Programs FP-6 Technological Incubators EUREKA Tnufa BI-National Agreements Research Institutes Global Enterprise R&D Cooperation Grants:13 $ 400 mln; Royalty Income:MBA-Entrepreneurship-2010 $ 150 mln. 13 Human Capital - Israel’s Biggest Asset 25% 150 20% 120 90 15% 60 10% 30 5% 0 0% 14 Source: the ministry of finance Yozma – 1993 Jump-starting VC funding • Mission: To create the venture capital market in Israel • Method: To entice the private sector and foreign investors to set up new VC funds, by securing foreign investors and contributing $ to the funds, securing the new VC funds’ obligation to invest in start-up companies in Israel • Accomplished through: Establishment of a $100M government funded investment company • Use of proceeds: Establishment of 12 funds 15 together with strategicMBA-Entrepreneurship-2009 partners 15 2009 Summary of Israeli High Tech Company Capital Raising . Israeli high-tech capital raising in 2009 reached $1.12 billion, 46% below 2008 level 16 Capital Raised by Sector- 2009 17 Why Israel? It’s the Culture… • Informality • A community spirit • Risk taking • International networks and experience • Everyone questions authority • Non-hierarchical society • Building startups has become the national sport, entrepreneurs-the new cultural heroes 18 Why is Israel unique? Israeli high-tech building blocks = Flourishing high-tech Industry Network Society Supportive Innovative, government entrepreneurial policy (grants) risk-taking culture Strong co-op: Strong defense academia industry (technologies & industry adapted to new applications) Highly Highly skilled educated No natural Influx of workforce due 2. November 2010people resources (brain educated/skilled to training in power fuels economy) immigrants military service 19 19 Essential Success Factors for tech driven growth in academic terms • Knowledge capital • Financial capital • Human capital • Social capital • Entrepreneurship capital 20 Israel- A Technology Powerhouse Government Experienced Incubators 2nd time Support entrepreneurs Defense Availability of Global Existing Technical Technology Corporate University People & Hi-tech Infrastructure R&D Students Management Companies Expertise Leading Academic Foreign Institutions Technology Corporate & Research Firms Seasoned VC Community Spin- Offs 21 Highlights in Israeli Innovation Pentium (Intel) Generic Drugs (Teva) Centrino (Intel) Irrigation (Netafim) Telecom Billing(Amdocs) Stents (Medinol) Call Center Logging (Nice/ Firewall (Checkpoint) Verint) SW Performance (Mercury Voice Mail (Comverse) Interactive) Instant Messaging (ICQ, AntiVirus (Alladin, Ubique) Commtouch…) PC Board Inspection Regeneration of Spinal Cord (Orbotech) cells (Proneuron) VoIP (Vocaltec) Virtual Colonoscopy (Given Imaging) Two-bit per cell Flash Memory (Saifun) Minimal Invasive FUS (Insightec) Disk on Key (M-systems) CT (Philips) 22 Entrepreneurship- Why the Technion? • Technion graduates fill leading positions in 90 of the top 100 companies in Israel • In present start ups Technion graduates are playing key roles in R&D and Management • Increasingly Research Universities are the suppliers of new technology innovations and the source for technology start-ups, including the Technion 23 Entrepreneurship at the Technion 24 Bronica Entrepreneurship and Innovation Center (BEIC) Main goals: • Lead the development of campus wide entrepreneurial activities, for students, faculty, staff and alumni • Work in partnership with the Technion Research & Development Foundation to identify promising technologies and assist in commercialization • Strengthen university and industry relations through joint research and action learning 25 Entrepreneurship at the Technion: Adv Board Work MBA Courses+ BizTEC shops Grads E E I Lab Consulting Club Courses Work TFL shops Graduate Students And Faculty Alumni Undergraduate Students Adv Board BEIC www.yazamut.technion.ac.il Adv Board Conferences 26 Academic Courses in Entrepreneurship at Technion • Entrepreneurship guest lectures (Prof.Shechtman) elective • Entrepreneurship and IP, Technion (under) graduates, 96815, elective (given twice in semester A and B) • Entrepreneurship- BizTEC course, 95815, elective • Introduction to Entrepreneurship (MBA) 98788 obligatory • From patent to business plan (MBA and graduates) 99768 elective • Growth and biz development of high tech companies (MBA) • How to launch and run a software company (MBA+CS) 98727 • Finance and Entrepreneurship (MBA) 98793, elective • High-tech marketing, Technion (under) graduate, elective 94816 • Marketing Principles, Technion (under) graduate, 94831 • The business of biotechnology • Innovation- Entrepreneurship workshops in EE faculty 27 Consulting Services • Budding entrepreneurs are mentored and helped along every step in the process of launching their startup • In the past semester over 25 startups have received free advisory • “Unilims” (MBA students): “…due to the ongoing assistance we managed to develop the full marketing and business plan... We realized that the hypothetic idea we had been working on for almost six months, had already grown up to a real potential that could seriously become a startup company in a near future…” 28 The Entrepreneurship Club (E Club) • A student organization committed to fostering thinking and discussion on entrepreneurship • The E club meets every two weeks and provides the students a place to meet fellow young entrepreneurs and learn from one another • The club invites speakers from industry to give educational talks • The club includes around 100 students from all faculties (both undergraduates and graduates) 29 BizTEC The Annual BPlan Competition: • The first Israeli student-led entrepreneurship contest, running for the 6th year with great success • In last 5 years , 11 companies raised money • BEIC supports BizTEC both logistically and with content (Academic director, workshop planning, judges etc) •
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