At 4.25%, Israel spends the most share of its GDP on R&D than anyone else. Not surprisingly, the investment has helped Israel to earn the title of “Startup Nation”, much of which is attributed to its thriving entrepreneurship culture.
For a nation with just over 8 million people, it lists more companies on NASDAQ than anyone else, except the US. When it comes to venture capital raised per capita, it ranks number one in the world. Very evidently, the investment in research returns a sizable profit.
Israel’s success story in commercializing academic innovations
The answer lies in the unique model of technology transfer from academia to industry. The concept of technology transfer was born in the University of Wisconsin in 1925 but was championed by two Israeli universities – Yeda at Weizmann Institute of Science and Yissum at Hebrew University of Jerusalem.
This was within twenty years from the establishment of the State of Israel indicating the focus of Israeli policymakers towards basic research and finding a way to sell it. Since then, almost every Israeli university and non-university institute and research center has developed in-house technology transfer organizations (TTO). These organizations are tasked with the commercial activities involving the research from the university.
Each year, Israeli TTOs generate more than $2 billion as direct sales or royalties for their intellectual property and lead to the formation of about 15 companies. This, in turn, helps to pump more capital from industrial partners into the basic research at these universities. As a result, these universities and institutes are getting increasing independent of public money and organizational grants ensuring more autonomous and streamlined research portfolio.
The bottom-up approach – from research to capitalization
According to Adv. Aaron Jaffe, general counsel of Yeda, “One of the reasons for Israel’s exceptional success is that the government has limited influence on the ownership of inventions coming out of publicly funded universities. This gives the university the freedom to undertake a range of commercial activities rather than work through any complicated regulations”.
However, Jaffe warns, too much focus on commercialization might not to lead to the necessary innovation in the first place. “The role of an excellent TTO is to identify these serendipitous discoveries and match them with the right commercial outlets” Jaffe added.
Yeda ensures that there is a favorable gap between the industry and academia to promote curiosity-driven research. In doing so, the Institute retains the exclusive rights to any intellectual property generated.
The Israeli model of technology commercialization serves as a model for any country. For the reason, many Israeli executives have recruited to lead the commercial arms of world-renowned universities such as Harvard and UCLA. There is a multitude of lessons one can learn from Israel. These can include:
- Bring academia and industry within an optimum distance and fostering healthy interaction to each other through TTO
- Enable such TTO as standalone legal and financial entities run by people knowledgeable in technology commercialization.
- Protect the inventions coming out of the universities and ensure fair distribution of the royalty.
- Take an active role to look for commercial partners to license academic inventions
(The article has been syndicated from Economic Times – The Times of India, with author’s permission. Original article)