What is a business incubator?
Business incubator is a place that can provide all the services that are needed for people that has a technological idea and they need somebody to assist them bringing this dream into reality. They have an idea, the need some money, they need some guides, they need a place, they need computers, here’s the place. The incubator provides these kind of services to tell up 15 different kind of startups. Usually they are trying to take in the same area, for example, people who have ideas in communications let them do over one roof, if they have biotech ideas it is better that the all the rest would be in the same area, because they can share ideas, and the manager will be an expert in this area and can assist them. Because in every incubator there’s a manager with experience in R&D, in Reaserch & Development, and has some experience in managing people. So this is in an inicial an incubator.
How many business incubators are here in Israel?
We have today 24 incubators, and usually they are hosting between 200 to 250 different kind of projects. Startups.
In what year was born the idea of business incubators in Israel?
First of all, the idea of how to promote the technology development was in the year 1992; when the government came with an idea of stablishing a special company in the name יוסמה(Yosma and means initiative) and put one million dolars in a pocket saying to the public whoever can provide and convince us that they can manage a project, a technological project, R&D, they will be able to get to applied about 8 million dolars from the government (is a law) if they will raise another 12 million from people or companies in Israel or outside of Israel. So the fund was limited to 20 million dolars. But this created a culture of benchor capital, that today we have more than 20 companies that are investing in tecnology, and money is comming from all over the world, because people would like to get some part of the sucess in these small country, the state of Israel. Because Israel is counted to be between the most important centers for Reaserch and Development in the world. In the year 2000 Israel became the second country in the world with so many startups, we had 5,000 startups, after the United States. Before Yosma we have the function of the chief scientists in the ministry of Industry and Trade, and he provided money for R&D, for tecnology. So every company can apply and ask for some assistance from the government if they had a good tecnological idea. So there is a commitee that is checking for your idea, you have to apply in a certain way; if they’re convinced you will get 50% of the money that is needed for the R&D, but in this chief scientists office they’re develop more ideas how to promote and to attract the israelis to think creativetely. To come with imagination that the sky is the limit, and they provide more ideas. One of them was incubators. If you are not in the state, you can applied to the chief scientist in a regular way because the chief scientist is more (i will say) healthfull in checking the ideas. And when you’re applying for the chief scientist you’re applying for more money, they build another structure of incubators that you can apply and get only a limited amount of money. Only 3000 dollars. And on the top of it you have to raise your own money 60,000; and you get all of these facilities that I told you before. So the icubators were created around the year 1994 or 1995 and since there it is florishing. Israel became a model of this system of incubators.
What has been the most representative cases of succesful incubators in Israel?
In every area that you can imagine, because we had success in communications, we have success in encription, data protection, data system protection, in biotech. So most of the areas that you have experts and people that area thinking how to lift the existing systems to another level of technology.
How many companies has been successful in business incubators in Israel?
I think that the rate is nearly to 50%. Not everybody that is going into the incubator will be succesful, because if is R&D there is a risk that nothing will come out. Because the idea is not a good idea, because sometimes people is not mature with the idea, because the market is not prepared for the idea, o people don’t finish the system o technology. So it depends, but nearly 50%, which is a very high rate kept out of the incubator with the idea of starting to raise more money from angels or from benchor capital companies.