Israel National Technological Innovation Report 2018

4 | Israel National technological innovation report Formore than adecade, the LuzzattoGrouphas produced national status reports on the subjects of intellectual property, high-tech, and technology innovation. These reports are submitted to relevant government ministers and to select groups of decision makers and stakeholders. As a group, we are situated at the strategic crossroads where entrepreneurs and investors meet and examine many new technologies before they enter the market. We have set our goal for this report to reflect the entirety of the data and insights about technological innovation in Israel. This is part of our public service commitment, which is one of the ethical foundations of our firm and comes out of our recognition that technological innovation is the central growth engine of the contemporary Israeli economy. We are therefore pleased topresent to you the newupdated and expanded edition of the National Report on Technology Innovation for 2017-2018, including discussion of various aspects of technology innovation, high-tech and intellectual property and their impact on the Israeli economy. The report integrates data from multiple, diverse sources including: the World Economic Forum, the U.S. based Bloomberg News company, the Annual Report of the IMD Research Institute, the Annual Statistical Report of the World Intellectual Property Organization (WIPO), the Martin Prosperity Institute at the University of Toronto, the economic newspapers the Wall Street Journal and the Economist, and in Israel – data from the Israel Patent Office, the Israeli research company ICV, the economic consulting company Financial Immunities, the Israel Export and International Cooperation Institute, and the Central Bureau of Statistics (Israel). The implicit assumption of this report is that intellectual property and technological innovation are two sides of the same coin. Intellectual property predicts technological innovation and at the same time reflects it. Furthermore, intellectual property is a kind of mirror image of the global economy and constitutes a prism through which macro-economic trends and processes are reflected. Thus, for example, the accelerated growth of China, turning it into the second economic superpower in the world, is well-reflected in the scope of patents registered there. As for Israel, the aggregate data shows a mixed picture - on the one hand, Israeli high-tech continues to demonstrate strength while positioning itself as a very important global player. In certain fields, such as medical devices, cyber, autonomous cars, cognitive computing, and artificial intelligence, Israel is at the forefront of worldwide innovation and its position as the innovation nation is stronger and more robust than ever. But in the background, there are signs of some difficult challenges, among them a serious shortage of technological human resources, with a dramatic increase in the salaries of high- tech employees, challenges in technology education and more, alongside a certain decline in national allocations for research and development. An additional challenge is inherent in President Trump’s tax reform plan, which threatens to make the United States more attractive than Israel for entrepreneurs and startup companies. For Israel, whose relative advantage relies on human capital and the spirit of innovation, intellectual property is a strategic resource. Therefore, developing, preserving and leveraging it are clearly in the national interest. In the same measure, creating a climate that supports innovation, while removing regulatory barriers, both for local inventors and entrepreneurs and for multinational companies that establish development centers in Israel, is an important need. Therefore, it is desirable that the government of Israel learn from the technology superpowers - like the United States and Japan - who have established special task forces to advance the field of intellectual property, under the authority of the President and Prime Minister respectively, out of recognition of its importance and contribution to economic growth. I hope that this detailed report, prepared by the research unit of the Luzzatto Group, will assist decision-makers in focusing their efforts in the field of technological innovation and intellectual property that they may successfully bear fruit for the Israeli economy. My sincere thanks to the authors of the report including: Dr. Esther Luzzatto, Attorney Amir Palmieri, Attorney Niv Moran, Attorney Michal Luzzatto, Attorney Boaz Croitoro and editor-in-chief Joel Tsafrir. May their efforts be blessed. Best regards, Dr. Kfir Luzzatto President.The Luzzatto Group kfirl@luzzatto.co.il PREFACE