How did Israel become a global leader in life science innovation?

Authors: Liu Shujing, Lai Yining

As a globally recognized leader in the world's medical high-tech innovation, Israel gathers nearly 2,000 life science companies and nearly 90,000 employees.

As one of the most innovative cities in the world, the rapid development of emerging technologies has promoted Israel's outstanding achievements in the life science industry

01 Industrial development history

After years of development, especially in the past 10 years, Israel has gradually formed an industrial system centered on digital health, medical equipment, biotechnology, and drug therapy at an average rate of 150 new companies every year, supporting the world’s most advanced drug R&D and innovation.

In the initial stage, local leading enterprises will be the mainstay to drive industrial development

During the rapid development stage, the government intensively introduced policies to fully support start-ups

In the international development stage, make full use of global resources to create the best innovation and entrepreneurship ecosystem

02 Key industry clusters

According to the "2020 Israel Life Science Industry Report", among the 1,750 active Israeli life science companies, 86% are headquartered in Israel, and 9% choose to set up their headquarters in the United States

(1) Tel Aviv

Tel Aviv has a population of about 400,000, which is 5% of Israel’s total population.

With open innovation at its core, Tel Aviv has become a global creative center by planning precise urban positioning, providing flexible and efficient policy services and other measures

Based on the history of Tel Aviv’s urban development, the government takes adventure, innovation and entrepreneurship as the main tone of the city’s positioning, and actively promotes international development strategies, such as the annual DLD Tel Aviv Innovation Festival, which has attracted global innovative companies, multinational companies, and venture capital.

Tel Aviv provides special entrepreneurial visas for the employees of foreign startups and risk loans to startups

(2) Jerusalem

The "2020 Global Startup Ecosystem Report" released by Startup Genome, a world-renowned research organization, ranks Jerusalem as the sixth best ecosystem for global life science start-ups

Among them, the Jerusalem Biotechnology Park, as the main gathering area for biomedical research and development companies in Jerusalem, is attached to the Hebrew University and is close to the Hebrew University School of Medicine and the Hadassah Medical Center

In addition, Jerusalem provides various platforms to support life science startups.

03 Industrial development experience

As a pioneer of innovation in the life sciences industry, Israel has gradually formed strong government support, innovative industry-university-research mechanisms, and mature financing system support in the development process.

(1) Government support regardless of gains or losses creates a hotbed for start-ups

Pay attention to top-level design

Pay attention to mechanism innovation
.
In 1974, an Israeli->
.
The strategy of “loan non-financing” is adopted to promote the upgrading of enterprises, and the government and enterprises shall jointly bear the risks in the R&D and commercialization stage
.
If the innovation is successful, the company must submit 3% of the sales revenue within 2 years to the Chief Scientist’s Office; if the innovation fails, the company does not need to return the scientific research loan, and the government and the enterprise share the risk and scientific research funding loss
.
Currently, the financial support projects managed by the Chief Scientist Office of the Israeli Ministry of Economic Affairs include the Research and Development Fund, the Magnet Fund (since 1994), the Technology Entrepreneurship Fund (since 2001), and the Scientific Research Incubation Project (since 1991)
.

(2) Integrated development of production, education and research, and a sound mechanism for commercialization of scientific research results to accelerate the industrialization of local innovation capabilities

Possess a rich reserve of high-end talents
.
Israel’s annual financial investment in education accounts for 9%-12% of GDP, promoting 9 universities and scientific research institutions including the Hebrew University to undertake about 65% of the country’s life science research work, 5 technical colleges and 10 professional research institutions Conduct high-intensity research and development work in medicine, biotechnology and related fields
.
In addition to local human resources, high-quality Jewish immigrants from the former Soviet Union and Europe have also injected talents into Israel
.
In recent years, many talents with a management background in multinational pharmaceutical companies have returned to Israel, giving their local companies a more innovative strategic vision
.

Have a mature mechanism for commercialization of scientific research results
.
Every university in Israel has its own technology transformation company, which provides services such as business analysis, patent registration and intellectual property protection for scientific research and invention achievements
.
In addition, Israel also has an active technology transfer organization that helps scientific researchers, early project investors, and business partners to communicate, and plays an important role in the commercial transformation of academic achievements
.
Through industry-university-research cooperation, Yedda and Teva Pharmaceutical Industry Co.
, Ltd.
discovered and developed Copaxone (Copaxone, glatiramer acetate), which became Teva's best-selling product
.
Since Corsopine was certified by the U.
S.
Food and Drug Administration (FDA) in 1996, the Weizmann Institute has earned approximately US$2 billion from sales with intellectual property rights
.
In addition, rasagiline tablets (Azilect), a revolutionary drug from the Technion-Israel Institute of Technology for the treatment of Parkinson’s disease, was commercialized through the institute’s technology transfer department, and the production license was also given to Teva in 2014.
Obtained US Food and Drug Administration certification
.

(3) Focus on the use of global resources and build an open development industry pattern

Carry out basic research cooperation on a global scale
.
Israel has extensive cooperation with many countries, regions and international organizations around the world in terms of technological innovation
.
Israel has joined a number of EU research and innovation framework projects since 1996
.
In 2012, Israel’s Weizmann Institute of Science and Tel Aviv University was selected as one of the seven core research areas for the integration of structural biology infrastructure, alongside top research institutions in France, Germany, Italy, and the United Kingdom.
Ranked among the seven centers of the European Research Infrastructure Strategy Forum, these seven centers are mainly responsible for the biomedical direction
.
The main purpose of biomedical research is to provide pan-European users with cutting-edge medical equipment, technology and personnel in the field of cell structural biology, so as to maintain Europe's top competitiveness in this key field
.

Carry out capital cooperation on a global scale
.
In 1992, the Israeli government launched the Yozma plan.
The government invested 100 million U.
S.
dollars to create 10 venture capital funds and injected capital into start-ups through the Office of Chief Scientist.
Now the size of the fund has exceeded 4 billion U.
S.
dollars
.
At present, Israel has a number of venture capital, private equity, and angel investments to provide capital support for the development of medical-related start-ups
.
Among them, the financing of foreign capital gradually replaces domestic capital, and it occupies a large proportion of the venture capital in Israel's life science industry
.
For example, Nasdaq has always been the main source of public financing for Israeli life science companies
.
According to public information, of the more than 80 Israeli companies listed on NASDAQ, more than 40 are life science companies
.
In the past 10 years, Israeli life science companies raised approximately US$4.
7 billion on Nasdaq, of which nearly 80% occurred in the two time periods of 2014-2015 and 2018-2020
.

04 Summary

At present, the biomedical industry is becoming a core area for cultivating new kinetic energy and seizing new technologies in various parts of the country
.
Since 2016, domestic provinces have successively proposed development goals for the biopharmaceutical industry, and strengthened the responsibility of the “top leader” to build industrial clusters
.

In this process, how to get out of the new path of the regional biomedical industry cycle can fully learn from Israel’s characteristic development experience, follow the laws and trends of industrial development, base itself on the world, accurately position, and clarify the development direction of key industries
.
Only by integrating resources, coordinating development, constructing a systematic and systematic path to formulate ideas, and at the same time, give full play to the guiding role of policies and funds, and then create an ecosystem of collaborative innovation, in order to promote the leapfrog development of the industry
.

references:

[1] Herzliya Pituach.
2021 IATI Israel's Life Science Annual Industry Report[J].
Israel: Israel Advanced Technology Industries,2021:4-137.

[2] United Nations Educational, Scientific and Cultural Organization.
UNESCO Science Report: towards 2030-Excutive Summary[M].
France: UNESCO, 2015.

[3]Zhong Guangjing.
The enlightenment of Israel's biomedical industry development experience to Guangzhou[J].
Inquiry (5): 6.

[4] Zhang Li, Yang Liqiu.
Decoding the mystery of the rapid development of Israel’s biomedical industry [J].
Fine and Specialty Chemicals (Phase 3): 5-14.