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Bennett unveils revamped aid program for tech industry

National technology innovation authority to offer loans, investments

By Yuval Azulai & Gali Weinreb

The Ministries of Finance and the Economy last week announced a reform in the Office of the Chief Scientist aimed at facilitating state support for entrepreneurship and innovation that will center around the establishment of a national authority for technological innovation with a wider range of tools for providing aid to companies and entrepreneurs.

“The reform constitutes a revolution that is taking place for the first time after 20 years of the Office of the Chief Scientist”, said Minister of the Economy Naftali Bennet. “It will shorten processes and provide the right toolbox for enhancing Israeli innovation and bolstering economic growth. Together with the Angels Law, the reform will release a huge amount of energy into the Israeli high-tech market” 

Bennett said “the tools now available to the Chief Scientist are like an old-fashioned dial phone in the iPhone 6 era,” adding that as an ex-high tech CEO, he didn’t use the tools then offered by the Chief Scientist because they weren’t suitable for his company. “With the coming reform, the Office of the Chief  Scientist will operate at a sector 20-25 years ahead into the future in Israel through its flexibility and the diverse and up-to-date facilities it offers.”

the authority is slated to begin operating in 2016 as an operational arm of the Office of the Chief Scientist with Chief Scientist Avi Hasson serving as its chairman. The authority also will have a director general, while its board of directors will be composed of representatives of the Ministries of Finance and Economy and 3 representatives from industry.

Hasson, Bennett and Minister of Finance Yair Lapid have been promoting the reform for the past year because they believe the Office of the Chief Scientist’s existing tools no longer are fulfilling the actual needs of companies and entrepreneurs engaged in innovation.

While current assistance is mainly in the form of support through grants, when the new authority begins operating, the state will be able to support innovative ventures, among other things, through equity investment, guarantees, and loans.

If, hypothetically, it is necessary to establish activity in genetic research, after the reform, the state will be able to invest $5 million to accompany a $25 million;n investment by a foreign investor. In the current situation, the government has no tools for supporting such a  venture, because it will take the government 2 years to approve the program. We’ve got to be a lot quicker Bennett told “Globes.”

Hasson said the new authority would be statutory and would be able to take action on industry’s needs “quickly and effectively.””We’ve built a system of balances and brakes to preserve the governments goals with a wise, flexible and innovative policy according to standards adapted to the sophistication and innovativeness of the industry we are serving. The Israeli high-tech industry, with its impressive achievements over the past 20 years that have made Israel one of the world’s leading centers of innovation, is in an alarming slowdown, and significant measures are therefore necessary to restart it.”

The plan will be presented at the socioeconomic cabinet meeting next Sunday, after which it will be brought before the Knesset as part of the Economic Arrangements Bill submitted by the government.

Before the program can be implemented, a change in the current Research and Development Law also is necessary. the budget of the Office of the Chief Scientist currently totals almost NIS  1.5 billion.The authority itself will be budgeted by the state, and future royalties paid by companies that have received aid will go to the state.

At the same time, Bennett told “Globes” he was acting to increase the Chief Scientist’s 2015 budget, adding that , as part of comprehensive staff work he had led with a team on the subject, he consulted leading high-tech figures in an attempt to identify the current gaps.

Several dozen Ministry of the Economy employees slated to work in the framework of the new authority object to the new program, however, as does the Manufacturers Association of Israel, which has  expressed reservations about it on Sunday.

“We welcome any measure that will improve the way the government system works,” said Manufacturers Association CEO Amir Hayek. “In this case, however, the proposal includes an injection of funds designated for industry into venture-capital funds whose goal is to maximize their profits in the short and medium term, and certainly not the development of advanced and sustainable industry in Israel. We’ll get an innovation authority, but there’s a major risk that it will contribute to innovation, but not in Israel.”

Author: Ida Real Estate

I have dealt with people starting from my teen years whether it was a junior counselor position, volunteering in community centers for the elderly, working as a secretary and as a real estate agent. Dealing with the public is a learning experience and challenging. Someone once told me that a person can learn from every being they meet whether it be a child or a stranger they met for 2 minutes. This I hold true. I have met so many people and have learned a lot and keep learning. My father who ran his own business made it a point to provide good service to all his customers no matter how small the customer. I hope to offer quality, honesty, and result in happy customers whether they are sellers, buyers, or renters.

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