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Mapping the Israeli high tech industry Project: IFISE Work package 7 Arie Sadovski

Mapping the Israeli high tech industry Project: IFISE Work package 7 Arie Sadovski. Methodology. Database from a commercially available source Eight hundreds companies were contacted in two cycles Companies: estb. 1993 or later and hdqtrs in Israel

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Mapping the Israeli high tech industry Project: IFISE Work package 7 Arie Sadovski

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  1. Mapping the Israeli high tech industryProject: IFISEWork package 7Arie Sadovski

  2. Methodology • Database from a commercially available source • Eight hundreds companies were contacted in two cycles • Companies: estb. 1993 or later and hdqtrs in Israel • Received 143 qualified, filled-in questionnaires • Each company was contacted at least two times; in most cases three times: 1st call to identify the founders, then interview via fax/email and follow-up

  3. The companies

  4. Major industrial sectors Communication (hardware) and electronic components Software for internet Software for other applications Electronic medical instruments and devices Software for telecommunication (ex internet) Biotechnology (excluding pharmaceuticals) Computer (hardware) semiconductor devices and electronic components Optical instruments and materials (including optical communication items)

  5. Industrial sectors

  6. Number of employees • The average number is 36 • 80% of the firms have < 50 • 15% of the companies have < 10 • Mean employees' number having formal academic degrees is 23.4 • on the average at least 65% of the employees have academic degrees

  7. Companies’ age Companies Age # % 1 year 29 20 2-3 years 54 38 4-5 years 31 22 6+ years 29 20 Total resp 143 100 Mean 3.5

  8. Number of employees* Employees companies % 1-5 9 7 6-9 20 15 10-19 46 34 20-49 33 25 50-99 18 13 100-249 7 5 250+ 3 2 Total 136 100 Mean 35.6 * From data base

  9. Product development phases # % Research and development 21 15 Technological demonstration 6 4 Prototype 12 9 ß site 17 12 Initial sales 43 31 Sales 41 29 Total respondents 140 100

  10. Proportion of R&D expenditures to income* R&D Expend # % 0-10% 9 11 11-20% 11 14 21-30% 5 6 31-50% 9 11 51-70% 12 15 71-100% 31 38 101+% 4 5 Total 81 100 Mean 74% * Approx., year 2000

  11. The founders

  12. Number of founders per company Founders # % 1 22 15 2 57 40 3 42 30 4 15 11 5+ 6 4 Total 142 100

  13. Founders’ formal schooling # % Non academic 11 8 Vocational Engineers 8 6 B.Sc. /B.A 73 51 M.Sc. /M.A 63 44 Ph.D. 67 47 Military courses 15 10

  14. Founders’ professional training disciplines # % Engineering 64 45 MBA 24 17 Exact / Computer Science 77 54 Management/Economic 21 15 Life Science 26 18

  15. Founders' age groups distribution Age # % 24-33 74 24 34- 43 83 26 44-53 104 33 54-65 47 15 66+ 6 2 Total 314 100

  16. Women founders Per company Companies 1 13 2 1 4 1

  17. Changes in the founders' position # % Yes, all of them are still in the lead 94 67 No, part of them are in the lead 30 21 No, none of them are in the lead 16 11 Total respondents 140 100

  18. The entrepreneurial environment and background

  19. The geographical birth place of the new technology # % Israel 128 90 Abroad 12 8.5 Both 2 1.4 Total respondents 142 100

  20. The working environment in which the new technology was borne # % Academic institution 23 20 High Tech industry 73 62 Academic + High Tech 4 3 Low Tech industry 18 15 Total respondents 118 100

  21. Previous occupation of the founders # % Unemployed 2 1 Students 9 6 Academia, Research Institute 24 17 Industry 108 76 Total respondents 143 100

  22. Founders’ previous industrial positions # % R&D Manager 78 55 Staff31 22 ProductionManager 10 7 Staff 1 1 Marketing /salesManager 33 23 Staff 6 4 Total responses 159

  23. Fund raising patterns

  24. Number of rounds used for fund raising RoundsCompanies % 1 48 39 2 29 24 3 24 20 4 15 12 5 6 5 Respondents 122 100

  25. Sums raised in the different rounds Sums raised Seed 1st 2nd <150K 26 8 6 151-600K 3714 8 2-3M 304840 3+ 8 2946 Total 100 100 100

  26. Sums raised in the different rounds

  27. Non-government financial sources for new start ups* Number Percent Self 39 27 Family and friends 19 13 Private investors (Business Angels) 76 53 Private incubator 7 5 V.C 74 52 Bank loan 17 12 Stock exchange; IPO 8 6 Investment Company 14 10 Strategic investor in Israel 14 10 Strategic investor abroad 13 9 Other source 10 7 *Multiple responses per company were given. N=143

  28. Non government financial sources

  29. Yozma VC funds as a funding source Companies* Yozma VC fundsNumber Percent Eurofund 4 15 Medica 1 4 Walden 4 15 Gemini 3 11 Nitzanim 1 4 Apex 3 11 Inventech 4 15 Polaris 9 33 Vertex 2 7 Jerusalem Pacific Ventures 0 0 Star 4 15 *Multiple responses per company were given. N=27

  30. Government financial sources Companies* Number Percent Government Incubators 21 15 R&D grant – Regular 49 34 R&D grant - For start-up 5 3 R&D grant - “Magnet” 7 5 Bi-National programme – BIRDF 11 8 Bi-National programme – Other 1 1 Investment Center – Grant/capital equipment 11 8 Investment Center – Income tax benefits 21 15 *Multiple responses per company were given. N=143

  31. Incubators and Yozma programs affiliated companies-comparison of sales and growth- rates to the otherrespondents companies

  32. Difficulties encountered

  33. The six most difficult areas and expectations for government assistance Areas of activity - Difficulty index (mean) *Gov. assistance Companies responding “YES” Fund raising - 4.2 58% Marketing - 3.8 45% Networking with strategic partners - 3.537% Connection with international collaborators -3.349% Recruiting - 3.2 19% Connection to funding sources - 2.9 44% Protection of IPR – 2.832% * The respondents were asked to rank each difficulty on a scale of 1-5.

  34. Other areas of activity Areas of activity - Difficulty index (mean) * Gov. assist. • Locating the company in a building facility – 1.819% • Networking with suppliers – 1.97% • Sources for technical information - 2.022% • Training of personnel -1.8 26% • Advice on legal matters – 2.1 16% • Advice on management matters – 2.217% • Networking with experts – 2.47% • Information on trends in the market & tech-2.424% • Networking with other firms – 2.517% • Advice on strategic matters– 2.5 16%

  35. The areas of higher difficulty

  36. End

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