Israel Shows Promising Biotech Potential
March 8, 2004

By Eyal Golan

Following the successes of its industries in electronics, software and communications, Israel has the potential to take a leading place in the world of biotechnology. Although Israel is much smaller than the U.S., the high quality of Israeli biotechnology R&D and its rapid rate of growth bare watching.

Israel is third in the world in the number of start-ups in the field of biotechnology, according to the Southern California-Israel Chamber of Commerce (SCICC), a non-profit, non-governmental organization dedicated to fostering bilateral business, trade and investment opportunities between Southern California and Israel.

Israel's biotechnology sector ranked fifth compared to European countries, after Germany, Great Britain, France and Sweden. A survey conducted by Israel's Ministry of Science suggests that sales from the biotech sectors will generate US$1.8 -2.3 billion by 2003-2004. Israel's share of global of the total world biotechnology sales is about 2.5%.

These findings demonstrate very promising business prospects for U.S. companies considering partnerships with Israel's flourishing biotech industry. Biotechnology contributes significantly to the growth of the Israeli medical industry, including medical equipment, electronics, and generic drugs, whose exports were $1.1 B in 1998, over 5% of total Israeli exports.

In biotechnology, strong basic research is a prerequisite for industrial applications. Life sciences represent about 35% of Israel civilian research activities, mainly in its seven universities, including Tel-Aviv, Bar-Ilan, Ben-Guryon, and the Technion Institute of Technology.

One key to Israel's high-tech success has been its unparalleled human resources and its emphasis on education. 30 percent of all Israeli scientists are in the life sciences and an additional 40,000-60,000 technically trained immigrants from the former Soviet Union could contribute to the field.

Israel ranks as a top country for scientific publications per capita and almost 60% of its scientific publications are in biology and related medical or agricultural fields.

Research and technology transfer are supported by government and university structures in Israel, including R&D commercialization offices at major universities, including Yeda Research and Development Company at the Weizmann Institute, Yissum Technology Transfer Company at the Hebrew University and Ramot, a private company wholly owned by Tel-Aviv University.

Given the world's needs in fields including medicine and agriculture, biotechnology is one of the most exciting, important, and potentially profitable fields. The United States, with its advanced management and marketing expertise, and Israel, with its highly innovative R&D community, and its high-quality and moderately-priced workforce, are particularly well placed to benefit from strategic partnerships.

Even before the new governmental emphasis on cooperation in biotechnology, many U.S. companies established Israeli subsidiaries to benefit from generous Israeli government R&D incentives, Israel's highly trained workforce and free trade agreements with both the U.S. and Europe.

Israel has emerged as one of the world's premier centers for high-tech design, research and development, with a particular strength in semiconductors, computer software, telecommunications and biotechnology. Over the past five years, American companies have invested billions of dollars in Israeli high-tech firms, despite the recent slowdown in the global high technology sector. With its strong potential, Biotechnology is the upcoming force in the high-tech industrial potential of Israel and maybe more importantly, will make Israel as a major contributor to global welfare, in terms of health and science.

There are 23 technological incubators in Israel, in Jerusalem, Tel-Aviv, Haifa, Netanya, Beer Sheva, Golan Heights and the Galilee. More than 20 percent of the incubators in Israel involved project activities in the biotechnology field. Generally speaking, most of the incubators are active in all fields of R&D, and located near research institutes. Each incubator includes several start-up companies that are specialize in the development of a specific product. By 2002, 730 projects had left the incubators, where 51 percent have continued on their own. Total excess of 626 million of private investment were obtain so far by the technological incubators that have become potential ideas of new high-tech venture funds in the future.

The Southern California Israel Chamber of Commerce is a nonprofit organization that represents Israeli technology companies seeking to forge strategic relationships with American companies. Its Biotech Committee's goal is to foster technology transfer to accelerate bio-partnerships between American and Israeli companies. The Committee works with US companies that have an interest in importing Israeli life sciences technologies or intellectual property.

Read Larta Wins Grant To Promote US-Israel Biotech from December 22, 2003 issue of Larta VOX

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