Israel has become an economic powerhouse with a strong position in information technology and ranks 21 in the world in terms of per capita GDP; A recently published United Nations report ranked it 23rd for the standard of living, based on per capita income, life expectancy, and educational ideals.
Much of the progress is due to innovative capabilities in applied science and information technology. As a country almost devoid of natural resources, particular emphasis was placed, from the start, on the need for advanced education and scientific research.
The combination of educational and scientific infrastructure led to the emergence of an innovative mix that led to development and development in many fields. Agricultural innovations, aimed at producing food for a rapidly expanding population, have included drip irrigation, mechanical, farm equipment, and, more recently, the use of plant genetics to produce crops with better yields and more disease resistance.
In the IT sector, Cybertech Israel, the largest annual Internet technology event outside the United States, takes place annually at the Convention Center in Tel Aviv. During the last week of January, the 2018 event hosted more than 13,000 participants and 120 global technology companies providing technology solutions in IT, finance, transportation, utilities, defense, research and development, manufacturing, communications, health, and government.
In 2018, Israel was ranked 10th globally in the Bloomberg Global Innovation Index, which highlights the 50 most innovative and dazzling countries in the global IT market.
Information Technology in Israel
According to the Israel Venture Capital Research Center, Israel’s IT and high-tech sector attracted a staggering $ 5.24 billion in investment during 2017. This number represents a 9% increase over the 2016 amount. Four major deals worth over $ 100 million contributed significantly to this growth. In the last quarter of 2017 alone, Israeli IT companies raised $ 1.44 billion. Total exit from Israeli high-tech companies (mergers, acquisitions, and IPOs) totaled $ 7.44 billion in 2017.
According to Startup Genome’s Global Startup Ecosystem Report 2018, Tel Aviv has the largest number of startups per capita globally.
Information Technology – Research and Development
Israel’s national spending on scientific research and development reached $ 15.95 billion in 2017, an increase of 11.1% over the previous year. In 2017, Israeli research and development accounted for 4.5% of the country’s GDP.
Research and development in universities
Research and development are primarily conducted in universities. As is the case everywhere, the advancement of basic scientific knowledge is the primary goal of researchers at universities in Israel. In addition to scientific research activities, universities continue to play an essential role in advancing information technology in the country.
University research and development institutions are responsible for the interaction between researchers and the industrial world. It facilitates the commercialization of innovative capabilities and industry knowledge to university employees. A recent study showed that universities hold pioneering patents in Israel at home and abroad. The relative size of their patent activity far exceeds the higher education sector in other countries.
Industry research and development
Research and development are also carried out in the industry; In fact, studies have shown that R&D-intensive companies have been a significant source of growth in industrial employment and exports.
Thus, in 1968, the government decided to create an office of Chief Scientist in the Ministries of Agriculture, Communications, Defense and Energy (today the Ministry of National Infrastructure), Health, Industry, and Trade to promote and encourage science – high-tech industries. Each great scientist acts as an advisor to the minister on industrial research and development matters and implements governmental and ministerial decisions in this field. The Chief Scientist is also responsible for providing financial assistance to worthy research and development projects, mentoring and training for new enterprises, and financing industrial and technology incubators. The chief scientist promotes cooperation with foreign countries to promote bilateral activities and generate risk capital in Israel and abroad to develop innovative technology.
The Industrial Research and Development Promotion Law (1984) aims to develop science-based, export-oriented industries capable of creating employment and improving the country’s balance of payments. The chief scientist at the Ministry of Industry and Trade is responsible for implementing this law and provides relevant research and development grants to industries seeking to export their products. If the project fails, government funds are lost; If successful, the entrepreneur pays three percent of the budget annually until the amount is repaid. In 1996, income from selling commercial products was approximately $ 60 million. In 1996, Dr. Orna Berry, Chief Scientist at the Ministry of Industry and Trade, distributed $ 400 million to large companies and small startups to encourage smart products for export.
Today, Israel boasts 1,800 R&D and IT companies, including many new startups and software houses, which account for more than half of the country’s $ 20 billion exports. In manufacturing, as many as 30 out of every 1,000 workers are involved in research and development. In total, Israel allocates 2.3% of its GNP to urban research and development. More than 60 percent of the money goes to the electronics sector, a broadly defined field that includes communications, data communications, medical electronics, defense systems, and software. Over the past few years, electronics has emerged as a leading industrial sector in the country. In 1995, exports amounted to $ 4.3 billion, increasing by 15.5 percent over the previous year. Total sales in 1995 were $ 5.89 billion, and in 1996 it exceeded $ 6 billion.
Nearly 40,000 people work in the electronics field, a third of whom are university graduates and 60 percent are highly qualified engineers and technicians. Output per employee grew from $ 46,000 in 1984 to nearly $ 150,000 in the mid-1990s. The research and development activity has been instrumental in developing methods for digitizing, processing, transmitting, and enhancing images, speech and data. In optics, research and development have helped Israel become a world leader in optical fibers, photoelectric inspection, printed circuit board systems, thermal imaging night vision systems, and robotic manufacturing systems based on optoelectronics. Computer graphics, computer-based imaging systems, and educational software have been developed in the field of computers.
Israel has also signed bilateral cooperation agreements in research, development, and information technology with the United States, Canada, European Union members, India, and Singapore. The deals aim to encourage contacts between Israel and foreign companies to facilitate joint ventures in research and development, manufacturing, and marketing. The establishment of joint ventures with foreign industrial firms has often benefited from the Israeli firm’s innovation strength and the foreign firm’s large-scale production and market penetration. Joint ventures have been undertaken in areas such as electronics, software, medical equipment, printing, and computer graphics, with much active assistance through these binational frameworks.