Israeli research commercialisation: What can Australia learn from the Startup Nation?
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Dana Gavish Fridman Photo Credit: Yissum

As Australia strives to improve it’s academic and industry collaboration, what can Israel offer in way of insights into the research commercialisation process

It is a truism that centres of higher learning exist with the overarching aim of producing research which will enhance the functioning of civil society through its findings. However, rather than purely justifying its commissioning on the grounds of its perceived academic merit, universities the world over are increasingly looking to derive commercial value from research output as part of an effort to leverage it’s “real world” practicality for profit.

This process, known as technology transfer, or more broadly as Research Commercialisation, is one in which tertiary bodies, by their very nature, are normally unexposed to business needs, have to strive, often with great difficulty, to bridge the disconnect between the public and private sector in order to bring about mutual benefits to the stakeholders in both.

Israel in particular has an impressive track record, as attested to by its leading position in the OECD in terms of patents filed by universities and public labs. By contrast, Australia holds the last position in the OECD rankings on university and industry collaboration worldwide, despite an ongoing effort to improve its commercial viability and the strategic allocation of research grants.

So how then have Israel’s universities successfully transitioned a significant majority of their academic work into revenue generating sources? Geektime spoke with Dana Gavish-Fridman and Shlomi Dolev from the Hebrew University of Jerusalem’s Yissum Technology Transfer Unit and Ben-Gurion University (BGU) respectively to learn more about the leading commercialization practices employed by both institutions and how they can be adapted to the Australian context.

Guidance from the outset: Screening, patents & culture

One crucial criterion is applied when considering academic tenure: how many patents the academic has to their name. This screening process has led to 400 of the Hebrew University researchers being engaged in applied science.

Making contact early on is critical, with qualifying researchers immediately on boarded with Yissum’s professional support team who make suggestions about areas of potential commercial interests, but by no means compel them to pursue strict paths. The fact that Yissum’s Board of Directors is mostly comprised of high-profile businessmen also means that it is run more like a hi-tech company. They are in turn supported extensively by a professional and extremely accessible group of business development experts. This team is constantly looking to reach out to new markets and indeed engage students themselves in contributing to the commercialisation process.

A testament to the success of this process, Yissum has had 110 spin-off companies, $2 billion in annual sales and 2,625 inventions. They have also developed long-term research collaborations with large corporates such as Google and Roche.

Like much of ethos the start-up nation and Israel generally, Dolev at BGU attributes the importance assigned to a need for survival which drives the desire for academics to attach priority to work which can be pragmatically translated in some way to everyday life.

While this may not be replicable, Gavish-Fridman says the importance of atmosphere cannot be understated, ideally one which combines patenting, collaboration, a guiding business development team working alongside researchers, and full transparency. This with the right funding, government policy, and university management makes for an environment conducive to research commercialisation.

Policy frameworks:

Dana states on the macro level, you have to have the supporting legislation for basic science to be commercialized. Specifically, two grants are given by the National Innovation Authority, a consolidated body of the likes that Australia lacks, are of most value to research commercialisation. One is called KAMIN, literally translating to a small heater, doesn’t even require a commercial partner, only basic science with an applied horizon. Such a project can attract a maximum of NIS 400,000 over a two-year timeframe. NOFAR, which requires a partner, gives the opportunity for future commercialisation, with the program funding 90% of the approved costs for a period of 12 months to a maximum scope of NIS 555,000 ($200,000 AUD), with the option to extend support for up to 15 months.

Funding availability:

Repeated emphasis was placed on the necessity of incubators nestled within or working in close partnership with the university. Both institutions have established ties with major Israeli VC funds, namely Jerusalem Venture Partners. Yissum is partnered with one of the government run incubators while BGU used its links to secure funding for multiple ventures, including notable cybersecurity start-up Secret Double Octopus, which recently raised $6 million to develop a stronger authentication alternative to regular 2FA. The government incubator program operates on licensing model with the total budget being between $US 500,000 to $US 80,0000. It’s high risk, but most of this is hedged by the government who provide 85% of the financing. As it stands, over 1,500 companies have matured and left the incubators. Of these graduates, 60% have successfully secured private investments.

Yissum has about the equivalent of $1 million USD for internal seed funding, with two new VC funds having been started, one focusing on AgTech and the other on academic innovation more broadly. They are also now looking to raise the third fund for materials and computer science. These are private funds that bring in money for existing startups and give a right of first investment for future portfolios. Hebrew University’s output comprises a third of the research in Israel, which is a huge opportunity by any measure.

Both also stress the importance of keeping investment channels diversified, ranging from startup companies to technology licensing to the pre-accelerator stage.

Team Secret Double Octopus. Photo Credit: SDO

Team Secret Double Octopus. Photo Credit: SDO

Beyond science

Research with commercial potential has long been associated with science exclusively, particularly pharmaceuticals and nanotechnologies. At Hebrew University, there has been a promising prioritization of humanities projects, which are primarily creating software hubs as research tools. For instance, we have seen significant advancements in tools for imaging to meet the needs of archaeology projects. Similarly, geography departments have benefited from GPS programs. Other proprietary software developments to come from humanities departments are home schooling programs and career advice software.

What can Australia learn?

Australia can start by making research commercialisation a desired objective from day one, not as an afterthought where it may be too late to give the researchers the advice they need. Remaining receptive to real needs, rather than just focusing singularly on purely academic research interests could also benefit if Israel is a reliable yardstick. In this line, research grants could have more stringent requirements about the useful applicability of research. While academia does need to retain its integrity, neither can it be oblivious to the changing demands, commercial in nature as they are inevitably at times going to be, of the world around it.

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Sam Taylor

About Sam Taylor

A law student and legal content writer, Sam has an avid interest in compliance, AgTech, innovation in law and the Australian startup scene generally. Reach out to him on LinkedIn.

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