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Breakthrough Dividend:
Chapter 5 - Meet The Players



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The next few chapters provide an overview of some major organized players in Israel's unique biotechnology community. First, however, a few general remarks about the science-intensive nature of Israel, as a country, are in order.

Modern economies depend on technology, and modern technologies depend on research. Israel has used both to move from an agrarian developing country to a technically-advanced developed country during the first 45 years of its existence. Given Israel's minuscule size — her total population of just over five million is less than that of many U.S. cities — and her limited resources, her record in science is truly amazing. Israel devotes 2.3 percent of its entire Gross Domestic Product (GDP) to civilian R&D (compared to 2.1 percent in the U.S.). Such investments support an exceptionally high percentage of active researchers in Israel's workforce: 71 per 10,000 workers (compared to 76 in the U.S.). Their scientific productivity has given Israel the world's highest number of scientific papers per capita, 109 per 10,000 population (compared to 72 for the U.S.).

In absolute terms, however, Israel is obviously no match for the United States. The U.S. spends $150 billion annually on R&D and publishes 35 percent of the world's scientific publications (the U.K. is a distant second with 8 percent). Israel overcomes its size disadvantage by adopting a truly international outlook. This accounts for Israeli researchers co-authoring almost a third of all their scientific papers with foreign colleagues, the highest rate of collaboration in the world. This is essential to preventing intellectual inbreeding, stimulating synergystic interactions with the widest possible circle of colleagues, arranging access to major international research facilities and maintaining high standards of research achievement.

The quality of Israel's scientific achievements are worldclass. In fact, she ranks 11th in the world for citations per scientific paper (5.75), just between Canada (5.78) and Japan (5.34). In molecular biology/genetics citations, Israel ranks between France and Japan. The U.S. is, however, far ahead by both measures.

Israel's future increasingly depends on exploiting new research-based technologies. In 1993, Israel sold $4.5 billion worth of electronic products (broadly defined) and over $250 million of biotechnology-based products. This represents a remarkable growth — in less than a decade — over Israel's total of $2 billion in technology-based exports in 1984. Israel's high-tech industries now account for 54 percent of all her industrial exports, excluding diamonds. Despite these successes, Israel's R&D-based industries still have a tremendous unrealized potential for growth. As in the basic sciences, collaboration and strategic partnerships can be the key to major successes and benefits for both Israel and her partners.

The remarkable growth of Israel's high-tech industry derives from a fruitful partnership between its university, government and industrial communities. Although R&D is an important part of Israel's relatively small biotechnology companies, most basic biotechnology research is done in academia and then exploited through licenses or partnerships. Considerable agricultural biotechnology research is concentrated at the government-sponsored Volcani Center of the Israel Agricultural Organization and substantial clinical research related to biotechnology is undertaken at Israeli hospitals. The large costs involved in testing, registering and marketing new products — and the small size of Israel's consumer and capital markets — lead to frequent cooperation with foreign organizations at all stages of research, development and commercialization. Although the benefits and dangers of this relationship are often debated, it is inevitable in biotechnology, given the comparatively low level of government investment.

The next four chapters examine major players in Israeli biotechnology and some unique institutions that promote the flow of Israeli innovation from laboratory to market. There is no attempt to be comprehensive, but rather to show through examples how, by accident or design, these players can and do work together.


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