EMDT_European Medical Device Technology

European Medical Device Technology, Spring 2015

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26 | Spring 2015 European Medical Device Technology emdt.co.uk markets The Yiddish word chutzpah that was taken over in many European languages stands for audacity or insolence. A person willing to take the risks associated with entrepreneurship and to question every- thing needs chutzpah. "An outsider would see chutzpah everywhere in Israel—in the way university students speak with their professors, employees challenge their bosses, sergeants question their gener- als, and clerks second-guess government ministers," they wrote in their 2009 book 'Start-up Nation: The Story of Israel's Economic Miracle.' Role of the Israeli State Perhaps even more important for the impressive Israeli record of successful start-ups than the widespread willingness to take risks is the role of the state. In the 1970s, Israel's economy suffered from a restrictive, corporatist economic policy and the ramifications of the Yom Kippur war with an enormous public debt. The economic miracle with yearly growth rates of 4% and more started in the early 1990s, after the country had adopted a number of measures to foster growth of the local high-tech industry. Armed with an annual budget of $450 million to invest in start-ups and research projects, the Office of the Chief Scien- tist plays an important part in awarding research grants to companies covering up to 90% of R&D costs. The Chief Scien- tist's 'Tnufa' fund supported Amit Goffer with a five-figure sum in the early days of Re-Walk, for example. "In our office, we like risk. When one of our evalua- tors presents a project and says, 'This is a really risky project', it gets us excited," current Chief Scientist Avi Hasson told The Financial Times. According to World Bank, Israel spent 3.9% of its GDP for R&D in 2012—by far more than any other country in the world. In comparison, only two other countries—Finland and Sweden—invested more than 3%. In 1993, the Israeli government created the Yozma programme to jump-start the country's venture capital industry. The initiative gave risk guaranties to private funds that invested in start-ups and founded its own venture capital funds. Today, entrepreneurs find it easier to raise funds in Israel than in most other regions, as the country has the highest level of ven- ture capital as share of GDP worldwide, according to the OECD. In 2011, half a percent of the country's GDP was avail- able as venture capital, much more than that of the second-place United States with 0.2% of GDP. In total numbers, companies raised $867 million in Israel in that year compared with $706.2 million in Germany. In addition to the agencies supporting research and providing funds for young high-tech companies, the Israeli military is a major contributing factor to the start- up nation. During the mandatory military service of three years (two for women), young citizens form networks that help them in their future careers and gain experience with high-tech devices. "Broad education and exposure to complex high-tech systems in one's early years opens one's mind to various pos- sibilities for tackling issues," Ra'anan Gefen, managing director of the start-up AdOM Optical Technologies told EMDT. "Within this experience, the Israel Defense Forces plays an important role, as every man and woman gets to know and operate sophisticated systems even in their late teens. This exposure triggers interest, probably at the right time, and directs people with interest in the right direction." Partly as a result of the central mean- ing of the military for the country, Israel's companies are especially strong in the IT and telecom sectors. Some of the world's biggest IT companies, such as Micro- soft, Google and IBM launched start-up incubators and accelerator programmes in the country. This high-tech presence has, See us at MEDTEC Europe Stand #5G56

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