EMERGING INDUSTRIES THE ISRAELI EXPERIENCE

1. EMERGING INDUSTRIES THE ISRAELI EXPERIENCE Sharon Kedmi Director General Ministry of Industry Trade & Labor November, 2010

2. A small country, lacking natural resources and a significant local market • Human capital is the main resource • Israeli economy is export oriented and dependent on global economy status and developments • The markets for Israeli products are several time zones away • Objective: Developing a global-facing Innovative industry that can overcome geographic & geo political challenges while leveraging the advantages of its population

3. Main Economic Indicators Source: Ministry of Finance, Bank of Israel and CBS

4. Israel’s Competitive Edge – IMD World Report 2009 EMERGING INDUSTRY Solid infrastructure for the development of new IT Country Rank  1st 2nd 3rd 4th BUSINESS EXPENDITURE ON R&D ( % GDP) Israel Sweden Japan Finland Israel Sweden Finland Japan TOTAL EXPENDITURE ON R&D ( % GDP) TOTAL PUBLIC EXPENDITURE ON EDUCATION ( % GDP) Israel Portugal Mexico Denmark Israel Hong Kong Brazil ENTREPRENEURSHIP OF MANAGERS Malaysia FLEXIBILITY AND ADAPTABILITY OF PEOPLE Hong Kong Israel Australia Ireland VENTURE CAPITAL AVAILABILITY Hong Kong Singapore Israel Malaysia Israel Ranks 24

5. Israel’s innovative ranking EMERGING INDUSTRY Solid infrastructure for the development of new IT Source: Economist Intelligence Unit, 2009

6. R&D Centers of Leading Foreign Companies EMERGING INDUSTRY Solid infrastructure for the development of new IT Company No. of R&D Employees Sector Intel 5,400 Semiconductors HP- (Indigo & Mercury) ~5,000 Capital Equip IBM 1,100 Computing Equip Cisco 1,000 Software Motorola 1,000 Telecom Applied Materials 1,000 Capital Equip. SAP 800 Software Freescale 570 Semiconductors Microsoft 600 Software GE (Healthcare) 400 Medical Equip • Over 200 foreign companies have established R&D centers in Israel • Over 35,000 personnel are employed in these R&D centers in Israel

7. Multinationals… Microsoft built in Israel their first R&D facility outside the US. Cisco built in Israel their first R&D facility outside the US. Motorola’s Israel facility is the company’s largest development center worldwide. IBM chose Israel for its first VC investment outside of the US Intel has 4 R&D facilities and 2 manufacturing centers in Israel, employing 7,000 Israelis Google opened two R&D centers in Israel EMERGING INDUSTRY Solid infrastructure for the development of new IT

8. Israeli Breakthroughs – Selected Examples Given Imaging – First ingestible video camera used to view the small intestine and diagnose disorders Intel’s Core 2 Duo, Centrino and Pentium 4 microprocessors M System’s Disk on Key and Disk on Chip flash memory GE Healthcare’s portable cardiac ultrasound system The Phillips Brilliance CT Scanner IP Telephony invented by founders of Vocal Tec AOL Instant Messenger ICQ Zip compression technology EMERGING INDUSTRY Solid infrastructure for the development of new IT

9. EMERGING INDUSTRY- WATER Driving Forces Affecting the Environment Building/ floorspace 20 m2 pc Car ownership 315 cars/1000 inh. Energy 6,332 KWh pc/year Waste 1.58 kg pc/day Water 250 L pc/day

10. EMERGING INDUSTRY- WATER National Water Carrier Mekorot’s Water Supply System 1964 2009

11. EMERGING INDUSTRY- WATER Desalination Projects (110)‏ Hadera Production since 12/09 (150)‏ Production 2013 Sorek Production since 09/07 (60)‏ Palmachim Production 2012 (100)‏ Ashdod Ashkelon (110)‏ Production since 12/05

12. Treated and Reclaimed Water EMERGING INDUSTRY- WATER Israel recycles 75% of its wastewater Reclaimed water account for over 50% of irrigation water Drip irrigation Different water prices

13. Israel’s Water Achievements EMERGING INDUSTRY- WATER • Israel, with a 75% water recycling rate, is the world’s No. 1 water recycler. • Israeli-invented Drip irrigation helped achieve 70%-80% of water efficiency in agriculture – the highest rate in the world. • Israel has achieved the highest ratio of crop yield per water unit. • Israel is the home to the world’s largest Seawater Reverse Osmosis desalination plant, annually producing 100 MCM at a low cost of ~$0.65 per CMof water – the most cost-efficient of its kind in the world. • Israel creates 25% of its consumed water. • Israel’s total water consumption has remains the same since the 1960s, despite a growing population and rising water requirements.

14. Water Technology Companies EMERGING INDUSTRY- WATER • 300 companies (60% start-ups at R&D stage established after 2001) • 8,000 employees • Export by water technology industry: 2005: $704 M 2006: $851 M 2007: $1,094 M 2008: $1,550 M

15. Wind Water Mgmt. Irrigation Water Security Bio-fuels Water Reuse Desalination Solar Energy Efficiency Geo & hydro Fields of Expertise EMERGING INDUSTRY- WATER & ENERGY Unique Position

16. The driving forces for development of solar energy technologies stem from Israel’s geographic conditions: Abundance of sunny days 50% arid zone Lack of oil resources Comprehensive R&D environment Strong synergy between academia and industry A range of academic institutions and R&D centers Innovative companies Over 100 companies with renewable energy solutions Driving Forces in Israel EMERGING INDUSTRY- ENERGY

17. Israeli Renewable Energy Highlights EMERGING INDUSTRY- ENERGY • Solar air-conditioning • Sun-heated water tanks Over 85% of residential buildings in Israel use solar collectors, representing 4% of Israel’s energy demands. • Home to the largest Solar Thermal company worldwide. • Cooperation between R&D and Academia.

18. Local Market EMERGING INDUSTRY- ENERGY • Current Installations: 45 MW (Home, Commercial PV) • National Targets: (5%) 850 MW by 2014 (10%) 3500 MW by 2020 • Electricity Supply Tenders: “Ashalim Project” – Accountant General Office • Schedule: In short list, tender out in Q2/2010 • Technology: PV 15MW x 2 CST 110MW x 2 • Land Tenders: “Timna Project” – Land Authority Land for 50 MW CST

19. Innovation - 1st in Medical 4th in Biopharma创新—医疗器械第一，生物制药第四 EMERGING INDUSTRY- HEALTHCARE Medical patents/capita BioPharma patents/capita Source: USPTO

20. EMERGING INDUSTRY- HEALTHCARE Academic Environment Great Potential for long term growth Human Capital: Ph.D. graduates Source: Israeli Bureau of Statistics, VATAT, salary.com, Tripletec manpower agency & HR interview 20

21. Science & Novelty 科学与革新Nobel Prize Winners 诺贝尔奖得主 EMERGING INDUSTRY- HEALTHCARE Total of 9 Nobel Prize winners in Economy (2005, 2002), Literature (1966) and in Peace (1978,1994). 共有9名诺贝尔 奖得主分别是2005，2002年的经济学奖，1996年的文学奖以及1978年和1994年的和平奖。 Prof. Avram Hershko & Prof. Aaron Ciechanover Winner of the 2004 Nobel Prize in Chemistry 2004年诺贝尔化学奖获得者阿龙·切哈诺沃（左）、阿夫拉姆·赫什科 （右） Prof. Ada Yonath Winner of the 2009 Nobel Prize in Chemistry 2009年诺贝尔化学奖获得者阿达·尤纳斯

22. Major Technological Fields:主要医疗领域 EMERGING INDUSTRY- HEALTHCARE • Implantable therapeutic devices 可植入式治疗器械 • Diagnostics & Monitoring – Device & Biomarkers 诊断及监控—器械及生物标记 • Therapeutic molecules 治疗分子 • External Imaging 外部成像 • Internal Imaging 内窥成像 • Drug delivery 药物传输 • Cell & Tissue Therapy 细胞及组织治疗 • Minimal Invasive Surgery 微创手术

23. Money raised by Israeli Life Science companies以色列生命科学公司筹集的资金量 EMERGING INDUSTRY- HEALTHCARE Source: IVC-Online, Jan 2010

24. EMERGING INDUSTRY- HEALTHCARE Israel’s Life Sciences Industry - Blockbuster Launched Products

25. EMERGING INDUSTRY- NANO MATERIALS Israel Nanotechnology industry Highlights • 80 High-tech companies are developing technologies based on Nanotechnology • 390 joint projects for Academia and Industry. • 420 Nanotechnology patents. • 3250 Academic publications by Israeli researches. • 675 new PHD’s for Nanotechnology annually. • 52 leading Israeli Nanotechnology scientist returned to Israel in recent years.

26. EMERGING INDUSTRY- NANO MATERIALS One example. Endless possibilities • Qlight Nanotech • Qlight’s technology is based on unique semiconductor nanocrystals. • Enable light conversion from UV and blue wavelengths to any other wavelength in the visible range • Qlight has collaboration with Merck KGaA, for developing semiconductor nanocrystal materials for application in LED lighting and flat panel displays.

27. Thank You!