"Israel has always been in the right place at the right time," former Ministry of Economy and Industry chief scientist Dr. Yehoshua Gleitman, now a partner in the GBIF venture capital fund and a consultant for governments about starting venture capital activity, yesterday told the Journey Conference, sponsored by EY Israel and "Globes." "We were there when communications technology was born, and we sparked the disruptive technologies. It's a world of disruption, not a linear world, and Israel's ratio of per capita disruption puts it in first place."
Gleitman says that in his term as chief scientist, "We set government policy 'almost by mistake,' without any politicians being involved, which turned out to be the right thing to do. The problem is that government innovation is an oxymoron. We, on the other hand, established basic rules and economic mechanisms that were very effective, but today we lack two elements. Most successful startups based on advanced technology rely on government investments, among other things, and our government isn't doing anything in this direction now. High tech was once very, very popular, but now investment and research have been halved."
Gleitman says that this situation has become worse over the years: "When I left the government, the budget for R&D was NIS 1.6 billion, and that was 20 years ago. Now, when gross national product is almost double, the budget has fallen even in nominal terms to NIS 1.3 billion. The talk about the startup nation is nonsense. What's important is what is in the budget book.
"I read that government spending on research and development is among the highest in the world, but almost half of this goes to foreign R&D centers that do not support the economy. Government sharing in civilian R&D spending is actually among the lowest in the OECD." He says that the job of government is "to develop sustainable work. If you want to build sustainable businesses, you need government involvement in the positive, not the negative, sense."
Gleitman says that he is now "not working in China, but in Guangdong, specifically the provincial capital Guangzhou, where the population is 15-20 million people, depending on when you count them. We're creating new businesses with Israeli companies in the life sciences having headquarters only in China. We deal with regulation and marketing, not venture capital, and we've already had six investments. We chose health because it has a lot of room for growth. Spending in China is only 4.5%, compared with a little under 10% in Israel and 15% in the US. They have decided to adopt a modern standard. Right now, their spending is the third highest in the world, but they'll be number one in a few years, so China is the place to be."
EY Israel managing partner Yoram Tietz, who moderated the session, asked Gleitman, "If you were to meet Prime Minister Benjamin Netanyahu and his wife, Sara, what would you tell them?" Gleitman answered, "I'm not sure that the prime minister would accept my advice."
Published by Globes, Israel business news - en.globes.co.il - on October 18, 2018
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