IFISE Project Second Meeting Milan, 1st and 2nd February 2001
Mapping the Israeli high tech industry Project: IFISE Work package 7 Arie Sadovski
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Transcript of 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 • 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
The companies
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)
Industrial sectors
0% 5% 10% 15% 20% 25%
Communication&comp.
SW-internet
SW-Other application
Medical instruments
SW-telecom.
Biotechnology (ex.pharma)
Computers&comp.
Computers&comp.
Industrial eng. &autom.
New materials
Internet sites
Internet services
Precision instruments
Other
Pharma
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
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
Number of employees*
Employees companies %
1-5 9 7 6-9 20 1510-19 46 3420-49 33 2550-99 18 13100-249 7 5250+ 3 2Total 136 100 Mean 35.6* From data base
Product development phases
# %Research and development 21 15Technological demonstration 6 4Prototype 12 9ß site 17 12Initial sales 43 31Sales 41 29Total respondents 140 100
Proportion of R&D expenditures to income*
R&D Expend # % 0-10% 9 1111-20% 11 1421-30% 5 631-50% 9 1151-70% 12 1571-100% 31 38101+% 4 5Total 81 100Mean 74% * Approx., year 2000
The founders
Number of founders per company
Founders # %
1 22 15
2 57 40
3 42 30
4 15 11
5+ 6 4
Total 142 100
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
Founders’ professional training disciplines
# %
Engineering 64 45
MBA 24 17
Exact / Computer Science 77 54
Management/Economic 21 15
Life Science 26 18
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
Women founders
Per company Companies
1 13
2 1
4 1
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
The entrepreneurial
environment and background
The geographical birth place of the new technology
# %
Israel 128 90
Abroad 12 8.5
Both 2 1.4
Total respondents 142 100
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
Previous occupation of the founders
# %
Unemployed 2 1
Students 9 6
Academia, Research Institute 24 17
Industry 108 76
Total respondents 143 100
Founders’ previous industrial positions
# %
R&D Manager 78 55
Staff 31 22
Production Manager 10 7
Staff 1 1
Marketing /sales Manager 33 23
Staff 6 4
Total responses 159
Fund raising patterns
Number of rounds used for fund raising
Rounds Companies %
1 48 39
2 29 24
3 24 20
4 15 12
5 6 5
Respondents 122 100
Sums raised in the different rounds
Sums raised Seed 1st 2nd<150K 26 8 6151-600K 37 14 82-3M 30 48 403+ 8 29 46Total 100 100 100
Sums raised in the different rounds
Fund raising patterns
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
<50K <150K <300K <600K <1M 1-2M 2-3M 3-5M 5+M
Co
mp
anie
s
Seed capital
Round 1
Round 2
Non-government financial sources
for new start ups * Number Percent
Self 39 27Family and friends 19 13Private investors (Business Angels) 76
53Private incubator 7 5V.C 74 52Bank loan 17 12Stock exchange; IPO 8 6Investment Company 14 10Strategic investor in Israel 14 10Strategic investor abroad 13 9Other source 10 7
*Multiple responses per company were given. N=143
Non government financial sources
53%
52%
13%
12%
10%
10%
9%
7%
6%
5%
27%
Private investors
V.C
Self
Family and friends
Bank loan
Investment Company
Strategic investor in Israel
Strategic investor abroad
Other source
Stock exchange; IPO
Private incubator
Yozma VC funds as a funding source Companies*
Yozma VC funds Number Percent
Eurofund 4 15Medica 1 4Walden 4 15Gemini 3 11Nitzanim 1 4Apex 3 11Inventech 4 15Polaris 9 33Vertex 2 7Jerusalem Pacific Ventures 0 0Star 4 15
*Multiple responses per company were given. N=27
Government financial sources
Companies* Number Percent
Government Incubators 21 15R&D grant – Regular 49 34R&D grant - For start-up 5 3R&D grant - “Magnet” 7 5Bi-National programme – BIRDF 11 8Bi-National programme – Other 1 1Investment Center – Grant/capital equipment 11 8Investment Center – Income tax benefits 21 15
*Multiple responses per company were given. N=143
Incubators and Yozma programs affiliated companies-
comparison of sales and growth- rates to the otherrespondents companies
Respondents (% of total)
No
Yes
Incubators graduate
52 63 No sales
22 37 100k-1M
26 0 >1M
Sale
s , $
110 19
Total respondents
Responding companies (% of total)
No Yes Yozma supported
55 46 No sales
27 12.5 100K-1M
18
41.5 >1M Sale
s , $
105
24
Total
2000 1999 1998
No
Yes
No
Yes
No
Yes
Yozma supported
41 24 51 47 64 46 No
33 35 29 13 15 8 21-40
26 41 20 40 21 46 >41
G
row
th %
63
17
55
15
48
13
Total respond.
Difficulties encountered
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 - 3.5 37% Connection with international collaborators - 3.3 49% Recruiting - 3.2 19% Connection to funding sources - 2.9 44% Protection of IPR – 2.8 32%
* The respondents were asked to rank each difficulty on a scale of 1-5.
Other areas of activity
Areas of activity - Difficulty index (mean) * Gov. assist.
• Locating the company in a building facility – 1.8 19%• Networking with suppliers – 1.9 7%• Sources for technical information - 2.0 22% • Training of personnel -1.8 26%• Advice on legal matters – 2.1 16%• Advice on management matters – 2.2 17%• Networking with experts – 2.4 7%• Information on trends in the market & tech-2.4 24%• Networking with other firms – 2.5 17%• Advice on strategic matters – 2.5 16%
The areas of higher difficulty Activities of high difficulty index
4.2
3.8
3.5
3.3
3.2
2.9
2.8
2.5
2.5
2.4
2.4
00.511.522.533.544.5
Financial support
Marketing
Networking with strategic partners
Connection with international collaborators
Accessibility to labor pool and recruitment
Connection to funding sources
Protection of IPR
Professional networking with other firms
Advice on strategic matters
Networking with professional experts individuals
Information - markets trends and tech dev
Difficulty index
End