Israel is a small country with scarce natural resources. Early on, its founding fathers and, most notably, Chaim Weizmann, the first President of Israel, identified human intelligence and science as key factors for the successful development of the State of Israel. Today, Israel is one of the most innovative countries in the world and enjoys an excellent reputation as a leading high‑tech and start‑up nation.
Next to the issue of geopolitics / security and socioeconomic aspects, science and research are one of three pillars when it comes to developing a national strategy for Israel.
Responsibility for research and innovation
Responsibility for science and innovation falls within the remit of two ministries: The Ministry of Innovation, Science and Technology (MOST) and the Ministry of Economy and Industry (MOEI). The Ministry of Education (MOE) is the competent ministry when it comes to all matters related to primary and secondary education.
The Israel Innovation Authority (IIA) was established in 2016. Its aim is to launch funding instruments and guidelines for research transfer and licensing. The IIA has an annual budget of around 520 million euros (2020). The Israel Science Foundation (ISF) has an annual budget of around 165 million euros (2021) and mostly funds basic research at universities. The major counselling bodies that advise the government on the strategic orientation and funding of state research and development are the Israeli Academy of Science and Humanities (IASH), which was established in 1961, and the National Council for Civilian Research and Development (NCCRD), an advisory body to MOST. The Council for Higher Education (CHE), which was set up in 1958, is responsible for funding R&D in the academic realm. Within the IIA, responsibility for cooperation in the European Research Area lies with the Israel-Europe Research and Innovation Directorate (ISERD).
Differentiated research landscape
On the Israeli side, cooperation with Germany is largely shaped by the high‑performing state‑recognised universities as well as the Weizmann Institute of Science (founded in 1934 as the Daniel Sieff Research Institute). According to the CHE, there were around 342,000 students in Israel in the academic year 2022-2023 (of which, for the first time, more than 60,000 were of Arab origin). Women account for almost 60 percent of students.
There is also a network of public research institutions that include the Agricultural Research Organisation (ARO) – Volcani Institute and other centres for geophysics, oceanography, geology (Earth Science Research Administration, ESRA) and biology (Israel Institute for Biological Research, IIBR),the Israel Space Agency (ISA) and the Interuniversity Institute for Marine Sciences.
Israel also has 100 Israel Research Core Facilities (IRCF). These facilities are aimed at enhancing the country’s research infrastructure. They provide scientists with a platform for in‑depth research and international cooperation.
Israel has been associated to the EU Research and Innovation Programmes since 1996. Israel’s association to the current Framework Programme, Horizon Europe, entered into force on 6 December 2021. Israel is also a member of the EUREKA network for international cooperation in R&D and innovation and a Cooperating Member of the COST framework for European Cooperation in Science and Technology, a funding organisation for the creation of research networks. Furthermore, Israel is also involved in the Partnership for Research and Innovation in the Mediterranean Area (PRIMA), an Article 185 TFEU initiative. Research and development are also at the heart of current cooperation activities in the Gulf region under the umbrella of the Abraham Accords.
Strong investment in research and development
According to data by the OECD, Israel was once more the country with the highest level of investment in research and development as a proportion of GDP in 2020, reaching 5.4 percent (21.7 billion euros in absolute terms). This figure includes only civilian research. According to the Global Innovative Index, Israel continues to be among the most innovative economies and currently ranks 16th (2022). The 2021 Bloomberg Innovation Index ranked Israel seventh in its list of the most innovative economies in the world. Israel’s particular strength lies in its innovation ecosystem, which enables the very rapid commercialization of innovations into businesses. Despite the Covid pandemic, 2021 was a successful year for the high‑tech sector.
High‑tech and risk tolerance
Israel boasts a particularly dense high‑tech start‑up scene. It is home to around 3,000 mostly small and medium‑sized enterprises, of which more than one‑third are IT companies. Industrial research and development activities focus on the areas of communications technology, biotechnology, medical technology, and solar energy. Extensive public funding, by the Ministry of Economy in particular, plays a decisive role in the success of Israeli high‑tech companies. The high rate of private venture capital is another important factor that contributes towards the country’s strength in research and innovation. In comparison to EU Member States, Israel tops the list when it comes to the mobilisation of venture capital. The attractiveness of Israel as a location for investment is also reflected in the continuously high share of foreign investment in the country, a large part of which continues to flow from the US. The high‑tech and biotechnology sectors are of particularly strong interest. The positive stance on the part of foreign investors is also based on the fact that the value of Israeli businesses is primarily captured in patents and the expertise of staff who can easily be transferred abroad in case of a crisis.
The dynamic development of scientific and scholarly activity has increased even further over the past years. The strong rise in the number of Nobel Prizes is evidence of this. Eight Israeli researchers were awarded a Nobel Prize in recent years: Daniel Kahnemann (Economics 2002), Aaron Ciechanover and Avram Hershko (Chemistry 2004), Robert Aumann (Economics 2005), Ada E. Yonath (Chemistry 2009), Dan Shechtman (Chemistry 2011), Michael Levitt and Arieh Warshel (Chemistry 2013).
75 years after its founding, the State of Israel is one of the world’s leading hi-tech locations. Despite its small size and population, Israel produces some 1,000 to 1,500 new start-ups every year, and the amount of investment per capita is the highest in the world.
(Source: AHK Israel)