CHICAGO – BioMed is the Israeli annual medical device and biotech conference taking place this week in Tel Aviv.
For the fourth straight year, Illinois presented at this event with representatives from iBIO (executive director Barbara Goodman), the University of Illinois at Chicago (assistant vice chancellor for research David Gulley), the Illinois Science + Technology Park (yours truly), Takeda America (Hiroshi Maeda, MD PhD), the eastern Mediterranean regional office of the Illinois Office of Trade & Investment (Sherwin Pomerantz), the America-Israel Chamber of Commerce Chicago along with others.
Simultaneous with the BioMed event, a third international stem cell meeting is also being held drawing scientists from around the world. Israel is one of the countries at the forefront of stem cell research. Professor Sam Stupp of Northwestern – a leading expert in both stem cells and nanotechnology – is one of the keynote speakers at this conference.
Israel has been an important site for Illinois exports with more than $210 million exported in 2008 and historically more than $4 billion since 1992.
Illinois also has the sixth-largest Jewish population in the U.S. with more than 278,000 Jews in the state (versus some 2 million in New York/New Jersey, more than 1 million each in both California and Florida and a sizeable population in Pennsylvania). This makes Israel a logical point of interest for this segment of the population in Illinois.
The America-Israel Chamber of Commerce Chicago was founded in 1958 and is a major focal point of commerce between the two countries. It has focused in recent years on areas of matching strategic interests such as health care and the life sciences (including biotechnology, medical devices, diagnostics, imaging and digital health care), agricultural technology (including renewable fuels), homeland security, communications and IT.
While all of this is interesting, Israel is an R&D machine with cutting-edge science, outstanding creativity and is genius in bringing new medical technologies to the marketplace. How can such a small country – smaller than New Jersey and with a population of about 7.3 million people – do this and have a worldwide impact?
It helps that the Israeli government has made this a national policy and has funded large research initiatives. This tiny country has a GDP per capita of $27,200, according to the Israeli Export & International Cooperation Institute. It’s one wired society with 98 percent of the population having a cell phone and 72 percent of the population not only having Internet but high-speed Internet.
According to the World Economic Forum, Israel ranked No. 17 out of 131 countries rated for global competitiveness and got high marks for "quality of scientific research institutions" (ranked No. 3), "availability of latest technologies" (ranked No. 3), "venture capital availability" (ranked No. 5) and "utility patents" (ranked No. 3).
Health care is high up in priorities for the Israeli government both in their domestic and international policies. Israel currently spends 7.5 percent of its GDP on health care (about half of the U.S. level) and has excellent health care systems with 3.9 physicians per 1,000 people. According to the Israeli Export Institute, there are some 373 hospitals in Israel and 42,100 beds.
One thing I have noticed in Israel is that there is no stigma to fail. On the contrary, we in the Midwest stunt our entrepreneurial spirit (and limit the number of entrepreneurs) with our tremendous stigma for failure. The Israeli entrepreneurial spirit seems indomitable.
The Israeli entrepreneurial spirit culturally seems to commence with their mandatory stint in the army (both men and women) usually before going to college. As they attend college later than their U.S. counterparts, there seems to be a greater maturity about education. The Israeli military experience gives Israeli teenagers intense social networking and brings together all sectors of the society.
It also creates an informal atmosphere where there is easy access to decision makers. The military experience also teaches them a risk-taking attitude and how to improvise under difficult situations. Additionally, because of the vast influx of Jews from places like Ethiopia, Argentina and Russia over the last 10 years, there is a multi-cultural environment.
As these young Israelis grow up and "graduate" from Israel, they continue to maintain these social networks learned from the military. This provides them with valuable contacts later in life and business. The entrepreneurial spirit has also helped build the Israeli venture capital community with assistance from the Israeli government.
In 1992, the Israeli government started a venture fund with $100 million. That was the first real venture fund. It has blossomed some 17 years later into 80 private VC funds with $10 billion, according to the Israeli Export Institute. To help further incentivate such activity, the office of the chief scientist of Israel also provides funding for technology incubators, R&D consortiums and grants.
Israel has the highest number of scientists and engineers per capita in the world. It’s the largest contributor to NASDAQ outside the U.S. with more than 150 Israeli companies trading on the NASDAQ, the New York Stock Exchange and the American Stock Exchange. There are more than 80 Fortune 500 companies with operations in Israel including Intel, IBM, Cisco, Microsoft, Motorola, Yahoo! and Google.
All of this has had a direct impact on the growth of the Israeli life sciences industry, which has grown from 186 companies in 1996 to 1,250 companies in 2008 (note that 90 percent of these companies have less than five employees each).
Of these companies, 62 percent are focused on medical devices, 23 percent on drugs (large and small molecules), 7 percent on health care IT (digital health care) and only 1 percent on agricultural biotech (but this area is growing). There are more than 3,000 tech companies in Israel with 200 start-ups launched every year and $13 billion invested in start-ups since 2000.
Of this group, there are 38 companies focused on oncology, 106 focused on cardiovascular products, 125 diagnostic companies, 73 digital health care companies, 62 imaging companies and 54 drug delivery companies to name some of the key subsegments. Nanotechnology is playing an important role in these drug-delivery companies.
As the Israelis classify this, 30 percent of the companies are at the seed stage (start-ups) with another 38 percent at the "R&D stage" (meaning they have raised a few million dollars). Another 32 percent have some kind of revenue. Given the great preponderance of medical device companies, this is a more likely scenario as these types of products get to the marketplace faster.
One area of high growth is digital health care where 95 percent of Israeli physicians use IT in their daily practice.
You may remember that the America-Israel Chamber of Commerce Chicago along with the Israeli Consul for Economic Affairs for the Midwest sponsored a digital health care conference in April 2009 at the University of Illinois at Chicago. It featured six Israeli companies, which wowed the American audience with creative approaches to health care software.
Many large international life sciences companies have taken note of the Israeli cutting-edge R&D. Companies like Medtronic, Merck, Abbott Labs, Sanofi-Aventis, Philips, Siemens,Bio-Rad, GlaxoSmithKline, Schering-Plough, Roche, Pfizer, Eli Lilly, Boston Scientific, GE Healthcare, Ferring, Genzyme and Johnson & Johnson all have operations in Israel.
The combined two meetings of BioMed and the stem cell conference attracted more than 8,000 people in 2008. While there are no official numbers yet on this year’s version, it appears well attended and not suffering from the worldwide slump affecting other regions of the world. There are attendees and delegations from China, France, Denmark, Hungary and Singapore as well as state delegations from Pennsylvania, Michigan, Texas, Maryland, Ohio, Missouri and Georgia.
Much can be learned from both Israeli culture on entrepreneurship and risk taking as well as scientific creativity and a push toward product development and commercialization. As the Israeli market itself is so small, Israel must learn to globalize early and think about their global development and commercialization strategies.
Though the U.S. has modified its policies regarding stem cell research in a positive way in 2009 (thereby stimulating renewed scientific interest in the U.S.), Israel is still far beyond the U.S.in applications and research of this promising technology. This is one of the reasons why so many people are attending this conference.
Coming to Israel always energizes me as its people are so high energy and creative. One gets exposed to more new ideas in a concentrated time period. Illinois, which is a state with more than 12 million people, along with some of our Midwest neighbors could learn a lot from Israel in technology creativity and commercialization. See you soon!
