The role of global corporations is key to the success of the Israeli ecosystem, according to a report released on Wednesday by innovation advisory firm Mind the Bridge. The report, called “Corporate Innovation in Israel“, was released as part of the Digital Scaleup Summit Israel 2020 and Climate Policy Forum organized by the European Commission – DG for Research and Innovation and the EU Delegation in Israel.
Mind The Bridge is a global organization providing innovation advisory services to corporates and startups. The Digital Scaleup Summit Israel 2020 is a curated, invitation-only format where international corporates and scaleups can do business, spot tech trends, and benchmark innovation approaches. It includes one-on-one matching sessions and an exclusive Open Innovation Boot Camp.
“An ‘army’ of over 40,000 people from 155 multinationals is hunting innovation in Israel,” said Alberto Onetti, chairman of Mind The Bridge, “The reasons for such a massive presence are easy to explain if we look at the numbers the Israeli innovation ecosystem has been able to produce: over 1,600 scaleups able to cumulatively raise $39 billion+. That equals to 18.4 scaleups every 100,000 inhabitants.”
There are no other places in the world with such a high scaleup density, excluding Silicon Valley, Onetti said. “Similarly, the Scaleup Investing Ratio (capital raised compared to GDP) is the second-highest in the world,” he added.
Global companies have been operating in Israel for decades, mostly through an R&D approach, a statement from Mind The Bridge said. During the last few years, these companies strongly shifted towards a leaner approach and the use of open mechanisms. More companies are increasingly experimenting with different partnership models, making innovation more cost-efficient, in a similar way to what has been happening in Silicon Valley since 2010.
The largest cluster for corporate innovation in Israel is Tel Aviv, with more than 1/3 of the innovation outposts located there. Seventy-four outposts are located there, making up 37 percent of the total.
Innovation-related activities are spread across Israel, but concentrate in cities like Herzliya (13 percent), Ra’anana (13 percent), Petach Tikva (11 percent), and Haifa (8 percent.) While it’s possible to find a mix of outpost types in Tel Aviv and Herzliya, most of the other hubs show a predominance of R&D activities structured around larger teams and operations.
According to the report, the top 10 innovation outposts in Israel are (in no particular order) Haifa, Netanya, Yavne, Tel Aviv, Herzliya, Ra’anana, Rehovot, Jerusalem, Hod Hasharon, and Petah Tikva.
Ministry of Economy and Industry, Israel