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Israel earmarks $12 million a year to bring tech to production lines

Funds will help tech firms get their developments to market by setting up local manufacturing plants, upgrading existing plants with cutting edge tech

Shoshanna Solomon is The Times of Israel's Startups and Business reporter

Illustrative image of IoT, smart factory , industry 4.0 tech, robot arm (Ekkasit919; iStock by Getty Images)
Illustrative image of IoT, smart factory , industry 4.0 tech, robot arm (Ekkasit919; iStock by Getty Images)

The Israel Innovation Authority, in charge of setting out the nation’s tech-related policies, has launched a NIS 40 million ($12 million) a year program to bring advanced manufacturing capabilities to Israeli industry and increase the number of tech firms that make their products in Israel, the authority said in a statement.

“The manufacturing sector in Israel is an engine for economic activity and for increased employment,” Aharon Aharon, the CEO of the authority, said in a statement. “In this time of crisis, we are expanding government support in order to allow companies to transition from R&D to manufacturing by allowing them to establish new factories and develop advanced manufacturing processes at existing ones.”

Aharon, who has led the authority for the past four years, said Monday he plans to step down from the post to seek new challenges.

The new program aims to bolster Israel’s advanced manufacturing industry — which is already competitive in the global market — while providing added value to the economy, Aharon said. “One of the Israel Innovation Authority’s key objectives is to promote growth of high-tech companies with operations entirely in Israel. If companies are to keep their entire operations in Israel, development of local manufacturing capabilities is crucial. The objective of this program is to increase the number of high-tech companies which manufacture products in Israel.”

The new program will help the local tech industry make the transition from development to manufacturing by setting up new factories. But it also aims to foster innovation in manufacturing processes at existing plants, by getting them to implement cutting edge technologies.

The program targets Israeli manufacturers that produce physical products with annual revenues of up to $70 million and companies with plans to establish a manufacturing line in Israel.

Eligible applicants will get support and advice about how to transition from development to scaled manufacturing, as well as help with removing bureaucratic obstacles in the establishment of new factories in Israel.

The program will also offer grants of 30%-60% of total approved development expenses, and other benefits for companies setting up in preferential investment areas.

To compete in international markets, manufacturers must integrate innovation into their production lines, the authority said.

The new program is in addition to two other programs run by the authority, which are both designed to help factories that lack experience in R&D processes. These programs offer tailored guidance and training for manufacturers seeking to implement innovative technologies.

“Currently, advances in high-tech do not in large part reach local manufacturing,” said Economy Minister Amir Peretz in the statement. “My goal is to encourage technology companies to keep their manufacturing in Israel, and this particular program is an example of how this policy is being implemented.”

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