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May 11, 2014 3:01 pm

Israel’s Chief Scientist Bringing Innovation Economy to Israeli Arabs With 200 Hours Start-Up Consulting, 85% R&D Funding (INTERVIEW)

avatar by Joshua Levitt

Israeli Chief Scientist Avi Hasson at the World Economic Forum. Photo: Screenshot / Flickr.

raeli Chief Scientist Avi Hasson at the World Economic Forum. Photo: Screenshot / Flickr.

The Israeli government is taking bold steps to integrate Israeli Arabs into the ‘Start-Up Nation’ by offering promising entrepreneurs and scientists 200 hours of free business consulting, plus research and development grants of up to 85 percent of the funding required to produce their new ideas in the lab.

In an interview with The Algemeiner, Israeli Chief Scientist Avi Hasson, a former U.S.-based portfolio manager, said the new initiatives are part of wide-ranging program “to engage the Arab population in innovation.”

The reason behind the push into the Arab and other populations is that “their participation in utilizing programs and the knowledge industry is limited. We want to change that.”

The Office of Israel’s Chief Scientist was first created in 1969 and has evolved with Israel’s economy to be fundamental to that transformation. Hasson, who assumed the role in 2011, explained the two main ways his role differs from similar offices in other countries.

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Rather than by sector, all industries fall under the purview of his department:

“R&D, science and technology, communications, life sciences, internet, plastics, agriculture, energy, all sectors, and all the stages of development,” Hasson said.

“The second part is policy making, which also differs from most countries, where that’s in different agencies.” In Israel, the idea was to create a “czar” to ensure that entrepreneurs could contact one ministerial office to get support for their ideas.

Two new programs are being introduced now to help guarantee that the right support is being provided in the earliest stages of a company’s development to help Israeli Arabs get a leg up.

“Sometimes these young companies are not in a stage to go out on their own. They need a consulting part,” Hasson said. “We sit down with them, analyze their business, understand what is the potential of the new technology, map out the road ahead, and all that could translate into a grant application. We need to do that kind of outreach to get to this important population.”

The consulting program offers up to 200 hours of advice from “dedicated experts” in nearly every field who can help the entrepreneurs get ahead, he said.

The second program is an aggressive plan offering 85% of funding for an R&D program for Arab entrepreneurs. He said the biggest difference from other funding plans is that if the technology seems viable, the Office of the Chief Scientist can agree to the funding commitment before any other investment, proving an important leg up when seeking out backers.

“As long as it has novel R&D, we’ll look at it,” he said.

The grant is conditional on the technology moving forward; if not, it’s considered a forgiven loan, the entrepreneur owes nothing.

The rationale behind his push into these communities is too bolster what Israel is best at.

“This is an opportunity we can’t afford to miss out on,” Hasson said. “The most important factor for Israel is human capital, that’s our strength. But we actually have a shortage of human capital, with multinationals here asking for more than we can provide.”

In the minority communities, “here we have an underutilized resource.”

Integrating these community deeper into the Israeli hi tech sector has become a priority.

“Forget the political, ethical, moral issues, this is a pure economic question,” Hasson said. “We want to raise the bar, to integrate them into the start-up nation, into the hi tech community.”

In what was a “first of its kind event,” Hasson said some 250 Arab, Bedouin and Circassian entrepreneurs gathered at the Nazareth Business Incubator last month to learn about the new programs being offered through the Office of the Chief Scientist.

The conference was sponsored by Israel’s Chief Scientist, the Israeli Industry Center for Research and Development (MATIMOP) and the Authority for the Economic Development of the Arab, Bedouin and Circassian Sectors at the Prime Minister’s Office. It was produced with the Nazareth Business Incubator Center and the MATI-Nazareth Business Development Center, two of the 20 innovation centers now open for business in Israel.

As well as Economy Minister Naftali Bennett, the attendees heard from Arab entrepreneurs Dr. Amal Ayoub, CEO of Metallo Therapy, and Ibrahim Bashir, CEO & Owner, Rushdi Food Industries, which has become a leading producer of tahini, a paste made with sesame seeds. Arab Israeli Professor Hossam Haik, of the Chemical Engineering Department and Nanotechnology Institute, at Israel’s Technion University, also spoke at the event.

The goal of the conference, in the words of the Economy Ministry, was to help minority entrepreneurs “get on board the high-tech innovation train.”

Hasson said, “We’re showing them role models via these conferences, bringing them into the eco-system, which has many players. The investors, the academics working with the companies, this includes a lot of people.”

The combinations being formed are multicultural.

“We’re seeing things like a Jewish investor, an Arab entrepreneur, a German professor; innovation loves diversification. It’s a very good thing, another benefit we can gain, and we’re doing the same thing to integrate the ultra-orthodox community.

One area Hasson notes that Israel could expand tremendously through this push is in “the Arab internet.”

“There’s hundreds of millions of people speaking this language, all of them coming online, and it’s growing very fast,” he said. Israeli Arabs could be “a great bridge to serving this market.”

“In my mind, we’re at an inflection point where this population could be very meaningful in high tech.”

Hasson described some of the high level alliances that are aiding their entry.

One of the entrepreneurs he highlighted was Imad Telhami, founder and CEO of Babcom Centers, a large call-center initiative in the Galilee whose purpose is to assist Arab men and women to integrate into the job market.

Hasson said Babcom already employs 1500 people in software services, an area where there can be tremendous growth. The business also provides an entrance for young Arab Israelis to gain computer skills that can later be brought to other companies.

He also described new venture funds, including one created in partnership with Pitango, one of Israel’s largest largest technology investors, to invest in companies being formed by Israeli Arabs or geared towards increasing their participation in the workforce.

Before entering public service Hasson was an international fund manager. For ten years, he invested on behalf of Gemini Israel Funds, where he was General Partner, managing investments in communications, storage and consumer electronics. He also led their Boston office. Previously, he spent a decade working for several leading telecommunications companies, including ECI Telecom, ECtel and Tadiran Systems. Hasson has a BA in Economics and Middle Eastern Studies and an MBA from Tel Aviv University.

Rather than on the initiative of the Israeli government to take the job, he said, “the decision preceded the proposal.”

“I thought that after 20 years, it was time to give back something on the serving side,” Hasson said.

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