Earlier this year, the grant-making agency supporting technological research and development in Israel, known as the Office of the Chief Scientist, rebranded itself as the Israel Innovation Authority. The purpose of the renamed and restructured agency — an arm of the Ministry of Economy — is to improve traditional industrial sectors by engaging them with cutting-edge research and development practices and continuing to maintain the country’s high-tech leadership.
Encouraging companies to compete for funds and expertise available through Israel’s network of specialized business incubators for early-stage entrepreneurs not only has driven the expansion of the nation’s economy, it also builds on the state’s market-oriented public investment in private enterprise as the formula to seed growth in the startup nation.
On March 17, the Authority announced winners of the fifth annual incubator competition, with more global companies and investors wanting to gain from running an idea lab for new or enhanced technology products in Israel. The winners will enjoy an eight-year license during which projects they support can receive government funding of 85 percent of the budget approved for each startup company. Companies that win contracts to run the incubators receive a share of profits earned by the successful startups.
Anya Eldan, a seasoned high-tech executive and one of the leading women in Israel’s innovation ecosystem, was chosen by Israeli Chief Scientist Avi Hasson 15 months ago to manage the early-stage and incubator programs that have become a world-class model for 21st-century idea labs.
Open innovation and enhanced international partnerships are at the top of her agenda. The Jewish Journal spoke with Eldan to discuss her choice to move from a top executive role in the private sector to coordinating the government’s effort to support early-stage entrepreneurs and innovators. Here is an edited version of that conversation:
JEWISH JOURNAL: You worked in biomedical research, software and venture capital, and served as a consultant to the government’s incubator program before joining the Office of the Chief Scientist. Tell us about your journey.
ANYA ELDAN: I studied math and computer science. I was in software and telecommunications for 10 years, working for a large software house. Then I worked for the RAD Group, which is a large communications group here in Israel. After working in marketing business development, I was asked by Israel Aircraft Industries to manage their investment fund. The idea was to commercialize defense technology. And what we see today, which is very funny, is that the trend is the other way around. Now, the defense technologies are looking to commercial markets for innovation that they incorporate into their products.
When I left venture capital, I wanted to manage companies. I felt that I needed to experience being a CEO. I ended up managing a company called WideMed. This company developed products for diagnosis and treatment of sleep disorders. We developed sleep products that got [U.S. Food and Drug Administration] approval. I took it public on the Tel Aviv Stock Exchange in 2006 and worked to foster their growth for about seven years.
JJ: How did you make the transition from the private sector, representing industry on panels evaluating startup projects, to managing the public venture side of things?
AE: In Israel, you can’t be in high-tech and not work with the chief scientist, because the chief scientist’s office supports such a wide array of innovation projects. Over the last several years — and this comes from the work I did around sleep research — I became increasingly interested in brain technology. One of the things that I found so compelling was that in medicine, the brain is like an unexplored continent. It seemed to me that the basic science is becoming more effective with significant gains in knowledge about the brain. And I thought that Israel could become a center for brain technology.
I organized our first two brain technology conferences, and that’s when I met the chief scientist, Avi Hasson. Avi convinced me that since I’m already doing this work — looking at how to build up our technological industries — I might as well come and join him at the chief scientist’s office. He offered me, effectively, to come and establish the early-stage segment of their activities. That was very compelling because I thought that’s an opportunity to be able to look at the whole early-stage sector as one and improve some of the existing programs, but also generate some new programs that would not just help us keep the innovation here but also to create the conditions for scaling up. As of January, we became the Israel Innovation Authority, which is still a government agency, but it’s more independent in its structure, and that gives us more flexibility to address the needs of the high-tech sector.
JJ: It seems the idea is to innovate the process and structure of how the government contributes to innovation in Israeli industry.
AE: Yes, and that change has received publicity, but the other thing is — and this is the one that attracted me to come and join the government — that, until last year, the chief scientist’s office was composed of 40 different programs, each one addressing different parts of the market. Some of the programs had the managers [guiding the programs on-site], some programs didn’t have [comprehensive] management. It was really a very program-oriented approach.
The change we are making is that instead of looking at developing clusters of programs, we pivot to basing the incubators on market segments [such as health technologies, software and communications, digital life technologies]. It’s a more coherent approach with market segment executives not only responsible for management of all of the programs in that segment, but also in charge of identifying what’s missing in our infrastructure and what policies need to be changed if we are going to be the key players in those industries.
JJ: What’s on the horizon for the Israel Innovation Authority?
AE: We are looking at how to help startups. Not just give them money, but also how to bring partners that can bring added value to the startup companies. This week, the fifth round of competition was concluded in the technological incubators program in which licensees were selected to establish and run the incubators. It’s an interesting question on who are the best partners. I can tell you out of 19 tenders that we did, we have a whole mix. In some cases, it’s a large Israeli business. So Jerusalem Venture Partners is being joined by Motorola Solutions, Reliance Industries and Yissum, the research [and] development company of the Hebrew University of Jerusalem, to focus on investments in software and communications.
In some cases, it’s Israeli industries. Elbit has an incubator, as does Strauss, a large food-tech company here that has an incubator. In other cases, it’s the multinationals. We gave a contract to Medex, owned by Boston Scientific, to establish and run a technological incubator in Or Yehuda with Tel HasShomer Hospital’s commercialization company. They will invest in the fields of medical devices, combined medicine and digital health.
Philips and Teva are doing medical devices. We have an incubator that won the tender in the summer, in digital health, owned by IBM; Medtronic, the largest medical device company in the world today; and Vitango, who’s the [venture capital] here, and the Rambam Hospital. This consortium is going to be investing in digital health.
So we’re now at a place where about one-third of our incubators have major international partners. It’s a great example … of a win-win. The large company comes here and finds Israeli innovation, but Israeli startups get significant added value from working with the market leader who can bring them to the market by helping them understand the segment in global terms.
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