Research and Development
R&D in universities
Research and development is carried out primarily at the universities. As everywhere, the advancement of basic scientific knowledge is the chief objective of researchers at Israel's universities. In addition to their scientific research activities, the universities continue to play an important role in the country's technological advancement.
Today, 105,000 students are enrolled in Israel's universities, with about 21 percent of all undergraduate students and 50 percent of all Ph.D. candidates specializing in the sciences or medicine. Another 13 percent of all undergraduate students and 8 percent of all graduate students specialize in engineering and architecture. Relative to the size of its labor force, Israel has a significantly larger number of publishing authors in the natural sciences, engineering, agriculture and medicine than any other country. Statistics also show that Israel has a larger share of publications co-authored by Israeli and foreign scientists than any other country, indicating prolific international scientific cooperation. Altogether, Israel spends $260 million annually on academic research, most of the money coming from the government and administered by the Council for Higher Education's Planning and Budgeting Committee. In addition, research authorities within the universities help faculty members locate, apply for and administer external research grants. There are at least 300 such sources, including ten large foundations, most of which involve foreign donors and require collaboration with foreign scientists. All in all, grant programs support about 2,000 research projects at an annual cost of $70 million. Israeli researchers also successfully compete for foreign grants and fellowships.
University research and development foundations, the first of which was established in 1952 by the Technion, are responsible for the interaction between researchers and the world of industry; they facilitate the commercialization of the innovative abilities and industrial know-how of the universities' personnel. A recent study shows that the universities are Israel's leading patentees at home and abroad, and that the relative size of their patenting activity far exceeds that of higher education sectors in other countries.
R&D in industry
Research and development also takes place in industry; in fact, studies have shown that R&D-intensive companies have been a major source of growth in industrial employment and exports.
Thus, in 1968, the government decided to establish an office of a chief scientist in the Ministries of Agriculture, Communications, Defense, Energy (today the Ministry of National Infra- structure), Health and Industry & Trade in order to promote and encourage science-based high-tech industries. Each chief scientist acts as advisor to the minister on matters of industrial R&D and implements government and ministerial decisions in this area. The chief scientist is also responsible for providing financial aid to worthy R&D projects, as well as guidance and training to new enterprises and funding for industrial and technological incubators. The chief scientist promotes cooperation with foreign countries to advance binational activities and tries to generate risk capital in Israel and abroad for the development of innovative technology.
The Law for the Encouragement of Industrial Research and Development (1984) is aimed at developing science-based export-oriented industries, capable of creating employment and improving the country's balance of payments. The chief scientist of the Ministry of Industry and Trade is responsible for implementing this law, and provides suitable R&D grants to industries seeking to export their products. If a project fails, the government's money is lost; if it succeeds, the entrepreneur pays back three percent of the grant yearly until the sum is repaid. In 1996, income from royalties on the sale of commercialized products was roughly $60 million. In 1996, Industry and Trade Ministry Chief Scientist Dr. Orna Berry distributed $400 million to large corporations and to small start-up companies in order to encourage the development of smart, export-targeted products.
Today, Israel boasts 1,800 R&D-based companies, including many new start-ups and software houses, which account for more than half of the country's $20 billion export of goods. In manufacturing, at least 30 out of every 1,000 workers are engaged in R&D. Altogether, Israel devotes 2.3 percent of its GNP to civilian R&D. Over 60 percent of the money goes to the electronics sector, a broadly defined field including telecommunications, data communications, medical electronics, defense systems and software. Over the past few years, electronics has emerged as the country's leading industrial sector. In 1995, exports amounted to $4.3 billion, an increase of 15.5 percent over the previous year. Total sales in 1995 reached $5.89 billion and in 1996 passed the $6 billion mark.
Almost 40,000 people are employed in electronics, of whom one-third are university graduates and 60 percent are highly qualified engineers and technicians. Output per employee has grown from $46,000 in 1984 to approximately $150,000 in the mid-1990s. R&D activity has been instrumental in the development of methods for the digitalizing, processing, transmitting and enhancing of images, speech and data. In the optics field, R&D has helped Israel become a world leader in fiber-optics, electro-optic inspection, systems for printed circuit boards, thermal imaging night vision systems and electro-optics-based robotics manufacturing systems. In the computer field, computer graphics and computer-based imaging systems and educational programs have been developed.
Israel has also signed bilateral R&D cooperation agreements with the United States, Canada, members of the European Union, India and Singapore. The aim of the agreements is to encourage contacts between Israel and overseas companies to facilitate joint ventures in R&D, manufacturing and marketing. The establishment of joint ventures with foreign industrial firms has often utilized the strength of the Israeli firm in innovation and those of the foreign firm in large-scale production and market penetration. Joint ventures have been undertaken in areas such as electronics, software, medical equipment, printing and computerized graphics, with many actively assisted by these binational frameworks.