Activities of the Israel Innovation Authority’s Divisions

In 2020, the Innovation Authority’s divisions implemented a wide range of measures aimed at advancing the growth of the Israeli innovation ecosystem. Specifically, during 2020, it approved 615 requests submitted by new companies requesting support for the first time.

This chapter presents the main activity of the various divisions during 2020 and the way in which they translated the Authority’s policy into action and specific policy tools.

• Startup and Business Development Division

The Startup and Business Development Division supports earlystage businesses and startups in the ideation stage and corporations interested in exposure to open innovation via partnership in technology incubators and innovation labs. The Division assists the ideation process – from development of an initial technology idea to productization – and in advancing the initiative with the aim of reaching advanced stages of capital raising and sales.

 

The Division’s Incentive Programs:

Ideation (Tnufa) Program: The Ideation (Tnufa) program is intended for fledgling entrepreneurs who are interested in formulating and advancing an innovative technological concept to the initial R&D stage, in preparation for Proof of Concept (POC) and/or construction of an initial prototype. The program’s goal is to assist in the project’s technological POC and commercial applicability, thereby enabling it to raise private funding and/or recruit a business partner for further development. The program provides a maximum grant of up to 85% of the approved budget, with a maximum grant of NIS 100,000 for 12 months (or double for innovative solutions in the field of Bio-Convergence).

Seed Program: The program is intended for startups in the seed stage that are developing technologies in fields with stringent regulation, an extended timeframe until implementation, or technologies that are part of an evolving market. The support will be awarded to companies that have not raised more than NIS 3.5 million (before making their submission to the program) and that have already signed a memorandum of understanding with a venture capital investor experienced in high-risk investments who is interested in making an initial seed investment in the company. Find more details below.

Technological Incubators Programs: A technological incubator constitutes an entrepreneurial center, the role of which is to invest in companies in their early stages. The incubator provides a framework that supports the establishment of the company and the development of the idea into a commercial product. The Incubators Program aims to support initiatives with an innovative technological idea in the early R&D stages, that is having difficulty raising private capital and needs the incubator’s support to reduce the risks and enable it to reach a significant funding milestone.
The comprehensive support offered by the incubator includes: a physical site and infrastructures, administrative services, technological and business guidance, legal advice and access to partners, additional investors, and potential clients. No financial investment is required by the entrepreneur as part of the program – 85% of the budget is funded by the Authority (up to a maximum sum of NIS 3.5 million for two years, according to the type of project and geographical location of the incubator) and 15% is funded by the incubator operators.

Technological Innovation Labs: This program is intended for entrepreneurs in the preliminary stages of a project, who need unique infrastructures and expertise to prove the feasibility of a technological idea. The program is also intended for corporations interested in collaborating with Israeli startups. The assistance to entrepreneurs is provided through innovation labs operated by the industry’s leading corporations via an open innovation model. The program enables startups to access unique technological infrastructures, market insights, and unique channels of marketing and expertise to which they currently lack access, with the aim of proving feasibility on the way to transforming a technological idea into a commercial product. The program provides a grant of up to 85% of the approved budget, up to a maximum grant of NIS 1 million for up to a year. A grant of up to 50% of the approved budget, up to a maximum sum of NIS 1 million will be awarded for a further period of 1 year.

Advancing Technology Entrepreneurship in Haifa: This program is aimed at reinforcing and strengthening the city of Haifa’s status as a focal point of high-tech industry in the Israeli ecosystem. The program’s goal is to increase the number of startup companies and technological initiatives in Haifa, with emphasis on its Lower City neighborhood. The program encourages synergy and collaboration between principal city focal points such as City Hall, academia, industry, the business sector, and the non-profit sector, with the aim of bolstering urban infrastructures and the use of the city’s strategic assets, encouraging independence of entrepreneurial parties, and strengthening the Haifa entrepreneurial community while integrating populations such as ethnic minorities, Ultra-Orthodox, women and Ethiopian Israelis.

Young Entrepreneurship: The Authority is working in conjunction with the Ministry of Education to promote an entrepreneurship incentive program that will constitute an efficient tool for encouraging and educating young people in business, scientific, and technological entrepreneurship. The participants in the program will gain experience in developing knowledge and products while utilizing Ministry of Education scientific and technological infrastructures such as ‘Eshkol’ (Cluster) and ‘Tapuah’ (Apple) science centers and science museums as part of their initiative to transform a technology idea into a product of economic value.

New Projects:

Seed Program: This program, which began operating at the beginning of 2021, aims to encourage investment by experienced venture capital investors in high-risk startup companies, thereby encouraging the establishment of further startups in these fields. The Innovation Authority will finance 40% of a seed round up to a maximum grant of NIS 3.5 million for startups that have signed a term sheet with an experienced venture capital investor or 50% of the round up to a maximum grant of NIS 3.5 million for startups located in Israel’s geographical periphery or of entrepreneurs from population sectors under-represented in high-tech. The startup will issue the investor an option for the sum of the Authority’s grant, to be exercised up to 3 years after approval of the request. When exercising the option, the investor will transfer the proceeds to the company plus yearly interest of 5%, upon which the company will repay this entire sum to the Authority.

The New Technological Incubators Program: The goal of this program is to encourage investments in the early stages of technological initiatives by creating a framework that supports and spurs the transformation of innovative technology ideas in initial stages of development into advanced startup companies suitable for follow-on investments. The program also aims to encourage technological entrepreneurship and commercialization of breakthrough technologies from research institutes to industry in complex and high-risk fields, to strengthen Israel’s technological innovation environment in seed investment, and to assist startup companies in unique and sophisticated technological industries to formulate and test products, prove technological feasibility, conduct pilots and more. The technological incubators, which provide the assistance and support to the initiatives in their early stages, are located and operated by local and global commercial companies and by venture capital investors capable of offering high-quality added value and supporting early-stage startups and other initiatives. The incubators are selected in competitive procedures for a 5-year franchise period with the option of a 3-year extension. Investors and commercial companies that are awarded a franchise will benefit from leveraging up to 85% of their investments in startups from the Innovation Authority when establishing the incubator’s infrastructure.

Entrepreneurial Incubators in the Periphery Program: This program is aimed at promoting the development and strengthening of innovation systems, technological entrepreneurship, and employment in Israel’s geographical periphery via collaboration between specially designated incubators and higher education institutions, students, entrepreneurs, and startup companies. This collaboration is achieved via research activity, development, and commercialization of incubator companies that are based on local initiatives. As part of the program, a local project operating within the incubator will be entitled to a grant of 85% of approved budget from the Innovation Authority, up to a maximum budget of NIS 1 million, to supplementary funding from the incubator, and to follow-on funding. In a competitive process conducted by the Authority, three new incubators were chosen – in Karmiel, Bnei Shimon, and Yerucham – to promote different fields of technological entrepreneurship in these areas such as Industry 4.0, Ag-tech, plastics, and medical cannabis.

 

• The Growth Division

The Growth Division supports startups and companies in growth stages, mature companies, and R&D centers operating throughout Israel. The division helps to advance companies’ competition and technological leadership with the aim of increasing the pace of their growth and their potential.

The Division’s Programs:

R&D Fund: This program supports commercial companies currently developing new products or upgrading an existing technology. The program offers the largest financial incentive awarded by the State of Israel for Israeli corporations’ R&D activity and is offered to all sectors with the aim of strengthening and advancing the Israeli economy. The fund’s activity also includes specially designated programs to support startup companies owned by members of Israel’s minority populations and/or ultra-Orthodox and/or women and another specially designated program supporting breakthrough generic research and development in R&D-oriented companies.

Joint Government Support for High-Tech Technological Innovation (Pilots): This program allows technology companies to conduct R&D, including programs for operating pilot sites in a variety of innovation systems, including those with rigorous regulation and with governmental influence, while enhancing the perception of the economic value created in Israel. Collaborating with government entities via the incentive programs increases their influence in strengthening innovation systems in fields under their responsibility, provides the public with better access to regulation, state assets, and public infrastructures, and improves the level of knowledge and professionalism of both the Innovation Authority and government in advancing these innovation systems. This incentive program is intended to support research or development and to provide a response to market failures that exist in new and growing innovation systems, including those resulting from regulation and government impact. These market failures are expressed by high levels of technological risk, complex implementation, limited access to pilot testing sites, or difficulty in receiving regulatory approval.

Support Program for Space Innovation: This program, operated jointly by the Innovation Authority and the Israel Space Agency in the Ministry of Space and Technology, encourages support in R&D for finding technological solutions and developing advanced products in the different fields of space, with the aim of strengthening the knowledge and technological development ability of Israeli industry in the field of space. The support is also intended to increase Israeli industry’s use of scientific knowledge in the fields of space technology at Israeli research institutions and of their research capabilities, to encourage the growth of startups in space technology fields, to reduce the knowledge gaps vis-à-vis global space markets, and to enhance the competitiveness of Israeli industry in these areas.

New Projects:

18 different programs were chosen as part of the first call for proposals in the Human Capital Fund Program. Most of them focus on advancing populations underrepresented in the high-tech industry – women, Arab society, ultra-Orthodox, and residents of Israel’s geographical periphery. The programs were awarded total grants of NIS 19 million and will train 2,800 participants over the next two years. In addition, 3 operating entities were chosen to integrate new immigrants and returning Israelis with R&D experience. For the next two years, these entities will operate programs to locate, select, and place these participants in the local high-tech industry while providing them with technology training and soft skills workshops.

Two large groups of leading companies were selected as part of the Workshop (“HaSadna”) Program to train the participating companies’ employees in Artificial Intelligence professions. The lecturers leading the programs will be senior high-tech personnel from the participating companies and the syllabuses will be submitted to, and approved by, the Innovation Authority. 800 employees will be trained in the two groups over a 3-year period with an investment of NIS 10 million and a funding rate of 66%.

More than 8,000 allocations have been made as part of the Emergency Training Program. These were distributed between development positions and development-supporting technology and business jobs. The training, with a budget of NIS 16 million, will also be conducted in periphery areas and will be adapted to underrepresented sectors of the population with an emphasis on the ultra-Orthodox and Arab sectors. The training will be conducted by 29 different entities and with the participation of 18 employers who have undertaken to train and later place the graduates.

• International Collaboration Division

The International Collaboration Division helps create a competitive advantage for Israeli companies via international collaborations in fields of research and innovation. The Division strives to facilitate access to knowledge, partnership in global research and innovation and market pilots, as well as collaboration with multinational corporations, public entities, and leading research institutions worldwide. The Division is responsible for the Innovation Authority’s global connections that advance research and innovation collaborations on strategic issues. Operating under the auspices of the division is the ISERD (Israel- Europe Research & Innovation) Directorate responsible for Israel’s interface with European R&D programs.

The Division’s Programs:

Bilateral R&D Incentive Program: This program provides support to Israeli companies working with foreign companies on commercialization-directed R&D projects to develop new technological products or to significantly upgrade an existing technology. The program also provides Israeli companies with an opportunity to work with foreign partners via a financial incentive that enables to share the risk in funding the project and helps with finding foreign technology partners.

Pilot Programs with Prominent International Beta Sites: This program supports Israeli companies’ technology pilot programs in different fields that will be conducted at foreign companies or that will be based on their capabilities, data, or information. The program grants Israeli companies an opportunity to test their technologies in real conditions via a financial incentive that enables to share the existing risk in funding the project and assistance with finding international Beta sites for the pilots. Products submitted as part of this incentive program must be ready for testing (after proof of feasibility and development of most of the product) and without additional significant R&D content.

Bi-National Funds Incentive Program: This program provides support for Israeli companies collaborating with foreign companies in the US, India, Singapore, and Korea on R&D projects of new technology products or the significant upgrade of an existing technology. The program’s financial incentive, financed by the bi-national funds, enables to share the risk of funding the project and offers support in the search for foreign technology partners.

There are currently four bi-national funds:

• I4F – Israel-India
• BIRD – Israel-United States
• SIIRD – Israel-Singapore
• KORIL – Israel-Korea

The ISERD Directorate – European Program for Research and Innovation – Horizon Europe: The European Framework Program for Research and Innovation is the world’s largest platform for collaborations in this field, with a total budget of EUR 95 billion. Israel is an associate member of the program and Israeli entities are entitled to submit requests for grants. ISERD – the Israel-Europe Research & Innovation Directorate is responsible for advancing Israeli activity in the European research arena and aims to provide Israeli entities with access to the European Framework Program. The program provides direct funding for a vast range of sectors and entities according to calls for proposals and strives to advance technological excellence in Europe. The program is intended for any organization or legal entity that would benefit from cooperation in international research, development, and innovation processes: companies, startups, corporations, research and academic institutions, government agencies, hospitals, municipalities, non-profit organizations, and others. A new program – the Accelerator EIC Program – has been opened for small- and medium-sized groundbreaking companies. This program offers grants and equity investment proposals. There are also several sub-programs in preferred fields in which the Authority is participating:

• The ECSEL Micro-Electronics Program
• The M-ERA.NET Program in materials science and engineering
• The MANUNET Program in advanced manufacturing
• The PRIMA Program for Mediterranean cooperation in fields of food and energy
• The QuantERA Program for research in the field of Quantum Technologies
• The Graphene Flagship for graphene and brain research
• The ICT AGRI Program for research in the field of precision agriculture
• The CHIST-ERA Program for collaborative research in ICT fields

New Projects:

Specially designated programs in the field of Bio-Convergence with Germany and Korea, that included focused B2B events aimed at helping Israeli companies find international partners.

A unique program together with the Inter-American Development Bank that enables Israeli companies to examine and integrate their technological solutions via pilots in Latin American water corporations. Three projects were approved for IDB funding in 2020 in fields of locating leaks in municipal water infrastructures and urban sewage treatment.

Covid and Green Technologies as Part of Horizon 2020: Two new programs in the field of Covid and green technologies were operated this year as part of the European program. Nine Israeli entities were awarded total funding of EUR 4.5 million in a call for proposals issued as part of Horizon 2020 to contend with the Covid outbreak. These entities were partners in 8 of the winning 23 global projects, as part of an urgent call for proposals for funding R&D and implementation of swift solutions for contending with the Covid pandemic.
The submitting groups were required to propose solutions in four different fields that can be implemented quickly in response to the spread of the virus and its ramifications: immediate conversion of production lines to manufacture of critical medical equipment; medical technologies, digital tools and Artificial Intelligence for treatment, monitoring, and control; social and economic influences of the pandemic; construction of patients’ databases to create new models for response to new health threats.

Green Deal: The European Green Deal Program is a European Commission “road map”. Its objective is to advance the goals determined by the UN for achieving climate resilience by 2050. In order to reach this goal, the program defines specific challenges relating to climate change and damage to the environment. The strategy formulated by the Green Deal labels a course of fundamental economic and social changes in Europe which advance the efficient use of resources and transition to a clean circular economy, preservation of biological diversity, reduction of environmental pollution, and use of research and innovation to adopt equal and sustainable social changes that includes everyone.

To advance the initiative and contend with the challenges it identifies, the European Commission published initial calls for proposals in late 2020, for a total of EUR 1 billion. These calls for proposals invited groups of researchers, companies, and stakeholders to suggest relevant ways and solutions to contend with the challenges at hand. The Commission will continue to fund projects and advance the initiative for the duration of the new Horizon Europe Framework Program.

• Technological Infrastructure Division

The Technological Infrastructure Division is responsible for advancing the development of groundbreaking generic and pre-product technology, transfer of knowledge from academia to industry, the establishment of R&D infrastructures, and for supporting the development of dual civilian-defense technologies. The Division’s programs are open to entrepreneurs, companies, and research institutions interested in sharing knowledge in the field of preproduct R&D.

The Division’s Programs:

MAGNET Consortiums Program – Consortiums of Israeli industrial companies and academic research groups working together to realize a common vision of self-development of groundbreaking pre-product technology in important fields on the global market, and in which Israeli industry has or may have a competitive advantage. The program enables the distribution of knowledge and cooperation between the consortium partners, which may be otherwise difficult to achieve. The program enables the formation of different consortiums for a period of 3 years, via broad-based partnership of industry entities, that are focused on a limited number of companies or those aiming to build an infrastructure of knowledge via research institutions that are directed by the industry.

Academic Knowledge Transfer Program: This program incentivizes biennial applied research with innovative technological feasibility originating in academia and its advancement to the stage at which an Israeli industrial company will adopt it to develop as a commercial product. The program’s goal is to bridge the knowledge gap between academia and the industry’s needs, with the option of leading a project that attracts the interest of business entities and, ultimately, achieve a commercialization agreement between the two parties. The program allows the project research to be accompanied by a corporation that envisions its subsequent commercial potential. Adding a corporation to the consortium will therefore be allowed at all stages of the project, to increase its chances for commercialization in Israeli industry. This program includes 3 subprograms: Knowledge Transfer with an Accompanying Corporation, Knowledge Transfer without a Corporation, and Preferred Pharma Knowledge Transfer that allows for triennial activity.

Knowledge Commercialization Program: A program promoting cooperation between academic research groups and an Israeli industrial company, with the goal of proving technological feasibility of the preliminary academic research’s achievements. The program is intended to enable a company to absorb the knowledge developed by the academic institution and to adapt it to its needs for developing groundbreaking products. The R&D program will include transfer of knowledge from an academic institution to a corporation, primarily via repetition of the research results, their validation, adaptations to industrial conditions, and industrial application.

The program includes three biennial sub-programs – MAGNETON, Knowledge Import, and Continued MAGNET:

• MAGNETON and Knowledge Import – the R&D program will include the transfer of knowledge from one or more research institutes (Israeli or foreign respectively) to an Israeli industrial corporation, primarily via repetition of the research results, their validation, adaptations to industrial conditions, and industrial application.
• Continued MAGNET – continued joint R&D activity of an industrial corporation member in the consortium and a research institution on a selected project conducted in the consortium.

MEIMAD – Dual Military, Defense, and Commercial R&D Program: This incentive program is a joint venture of the Innovation Authority, Ministry of Finance, and the Defense Ministry’s Administration for the Development of Weapons and Technological Infrastructure. The program supports the development of creative pre-product solutions for military needs and commercial markets. The program’s goal is to promote military and commercial R&D of dual use technologies, which on the one hand contribute to national security, and on the other hand possess commercial potential. This program includes three sub-programs: MEIMAD Academia (see Knowledge Transfer above), MEIMAD Industry (see Knowledge Commercialization above), and MEIMAD Pre-Product – groundbreaking pre-product technology developments with dualuse potential (the project is for up to 2.5 years).

R&D Infrastructure and Equipment Program: This program enables the establishment of collaborative infrastructures for innovative R&D based on inter-organizational collaborations or the subsidized procurement of designated R&D equipment for a single corporation providing R&D services. The program is relevant for R&D equipment that is currently inaccessible to Israeli industry, and which has the potential to significantly advance Israeli industry. The program enables to support establishment and long-term operation of R&D infrastructures – up to six years in the case of an association of users, and up to two years in the case of a single corporation (without the ongoing operational support).

New Projects:

CRISPR IL (Gene Editing) Consortium: CRISPR technology is identified by many as a scientific breakthrough that will change the worlds of medicine, biotechnology, and agriculture in the 21st century. This revolutionary technology enables to repair / turn off genes that are active in disease, to enhance genes that influence the quality of agricultural produce and food (plants, fish, livestock) and to make industrial manufacturing processes greener and more efficient. CRISPR technology is in its initial stages of development and therefore still faces significant challenges – increased efficiency, precision, safety, and wider accessibility to a range of spheres. The consortium, that includes companies in the fields of bioinformatics, biotechnology, and agriculture (both animal and vegetable) and Israel’s leading research groups, aims to develop a generic, AI-based solution the goal of which is to increase the efficiency, precision, and safety of gene editing tools to levels that will in the future allow its commercial use.

NLP (Natural Language Processing) Union: The Union was established in conjunction with the national “Digital Israel” project and the Innovation Authority to advance the understanding of the Hebrew and Arabic languages by computerized systems. The Union’s goal is to create an R&D infrastructure (primarily text corpora of tagged sentences) that will enable a foundation for not only identifying structural models and elements that make up the linguistic system but also to map the way in which they are used. This infrastructure will allow to advance the digital services currently provided in the State of Israel and enable Israeli companies to develop NLPbased applications and market them globally, based on pilots and POC in Israel. Approximately 20 companies and institutions are currently members in the Union, including developers and potential customers of products and services based on natural language identification technologies. The potential clients are from a diverse range of sectors such as high-tech, banking, insurance, communications, healthcare, education, tourism, placement agencies, government ministries, defense and intelligence systems, etc.

A joint project in the Knowledge Commercialization (MAGNETON) Program of Spring Biomed Vision and Sheba Medical Center: development of a method of spectral photography for imaging the oxidation in retinal tissue: A sensitive, non-invasive, and simple to perform technology has been developed at the Sheba Medical Center that enables to map the level of oxidation in biological tissue. The technology transferred to the company is based on acquiring and processing a multi-spectral picture based on a series of specially designated algorithms to form a map of tissue oxidation, similar to a topographic map. While the method for mapping oxidation in the retina’s blood vessels exists in an expensive hyper-spectral device, this solution is low-cost as it can be integrated in multi-spectral devise that include a fundus camera installed on a slit lamp. The technology will be examined, both on lab animals and in the company’s diagnostic devices, to confirm its verity and to adapt it for clinical use. Spring Vision develops and manufactures ophthalmology imaging products that are based on multi-spectral technologies, and which will enable to diagnose eye disorders and systemic diseases earlier than was possible until now, via relatively simple and low-cost means. This project is the continuation of a project submitted as part of the Knowledge Transfer Program.

A joint project in the Knowledge Commercialization (MAGNETON) Program of Nurami Medical and Prof. Boaz Mizrahi from the Technion: development of a perishable synthetic sealant for preventing the leakage of pancreatic fluids following pancreatomy. An innovative technology has been developed at the Technion for a biological adhesive that binds and seals living tissue. Nurami Medical, experts in the electro-spinning production of patches made from nano-/micro-fibers for the market of soft tissue substitutes. The MAGNETON project combines these technologies to produce a synthetic sealant aimed at preventing post-surgical leaks. The sealant will be inserted in the patient’s body during surgery, is intended to remain in the area operated on, and its material is resistant to the extreme physiological conditions at the point of surgery. Moreover, there is no need to remove the sealant which dissolves naturally, thereby further encouraging the patient’s recovery.

A Hebrew University project as part of the Knowledge Transfer Program, led by Prof. Lioz Etgar and prof. Haim Rabinowitz to develop an innovative technology that enables the production of photo-voltaic electricity on the roofs of existing greenhouses without impairing agricultural production: Researchers from the Hebrew University have developed an innovative technology that combines knowledge and research from the worlds of engineering, chemistry, and agriculture, aimed at producing electricity with unique solar panels developed by Hebrew University chemists. The panels will be placed on the roofs of existing greenhouses and will replace the existing roof surface. The research breakthrough enables optimal light absorption and the preservation of reasonably efficient energy transformation via both the solar panels and the plants. This in turn enables the land’s continued agricultural use and the preservation of agricultural output while at the same time generating benefit for the farmer and maximizing the production of renewable energy.

• Advanced Manufacturing Division

The Advanced Manufacturing Division assists companies from the manufacturing sector and factories interested in developing products and implementing innovative technologies. The Division strives to strengthen the manufacturing industry and enhance its competitiveness by applying R&D processes and innovation.

The Division’s Programs:

R&D Preparatory Program: The program aims to create an innovation-oriented change in companies from the manufacturing industry sectors, with the goal of enhancing the competitiveness of the participating companies. The program is operated as a complementary tool for the manufacturing industry and is intended to assist companies with the initial stages of R&D. The program offers companies without prior experience in R&D and in leading innovation processes, or companies that require focus and guidance with their R&D activities, the assistance of technology experts to bolster their R&D programs. The program provides supportive tools including mapping and examination of possible R&D directions, testing of technological feasibility, resolution of engineering faults, improvements in the manufacturing process, and pre-manufacturing preparations for early-stage companies.

MOFET (R&D in the Manufacturing Industry): The MOFET Program leads technological R&D programs that have the potential to improve productivity of a company or factory, while at the same time creating technological differentiation that will achieve competitive advantages in the local and global markets. The MOFET Program is intended for industrial factories interested in implementing technological innovation processes by developing innovative products, improving and developing existing products, or developing and enhancing production processes. The program is for manufacture-oriented companies or companies preparing for manufacturing, and that meet the program criteria. As part of this program, a company may submit focused R&D programs including development of a new product, use of advanced materials, development of an innovative production process, or implementation of advanced manufacturing methods.

Transition from Development to Manufacture Program: This program aims to assist companies to successfully navigate the transition from development to production, with the aim of establishing production lines and factories in Israel using advanced technologies. The program constitutes a quantum leap for companies in developing a production process for advanced products, offers financial support, guidance, and assistance in removing obstacles during an early-stage company’s transition from product development to that of mass production.

The program accepts requests in which two thirds of the budget is allocated to the development of production processes. The program is intended for companies and factories producing or preparing to produce in Israel and that are interested in developing innovative production processes or production processes for advanced products.

New Projects:

Breaking the Paradigm and Introducing R&D into the Manufacturing Industry: The manufacturing industry is entering the world of R&D, as can be seen by the 30% annual growth in the number of R&D submissions and approved grants. About 50% of the submissions in 2020 were from industry that had not previously engaged in R&D (plastics, metals, food, etc.). Surveys conducted among Israeli companies implementing Industry 4.0 solutions reveal that approximately 80% reported an increase in productivity; 70% reported a reduction in waste during production; and 60% reported a saving in energy expenses.

Establishing Factories in Israel with Advanced Technology: Two new programs were launched in 2020 to assist companies with a tangible product to successfully make the transition from development to production. The “Preparation for Production” Program within the R&D Preparatory Program enables early-stage companies yet to generate income to receive guidance from a technology expert with the product’s optimization programs and to build a production portfolio. The “Transition from Development to Production” Program enables companies to develop production processes while setting up the factory and to strengthen its production activity in Israel. This program provides ongoing support for companies that have completed the product development stage and are developing the production processes, in fields such as medical devices, pharmaceuticals, energy, alternative proteins, and others. Approximately 80% of the submissions to the program related to the sectors of the economy with the highest levels of productivity (more than NIS 450,000 a year gross added value per job).

Client Survey and MOFET Programs Evaluation: Two processes were undertaken during 2020 to improve the precision of the government support programs for innovation in manufacturing industries, and to evaluate the impact of this support on the companies’ growth. Some of the main conclusions drawn were that:

• The support for innovation in the manufacturing industry tripled the chance that a company would fully complete an R&D program.
• 40% of the companies approved for R&D programs reported an increase in sales and employment.
• 30% of the companies reported an increase in exports.
• The companies reported that after performance of the R&D program, they enjoyed more success in developing new products and that they increased the use of Israeli sub-suppliers and collaborated with other Israeli companies.