Israel sets out new program to fast-track smart-transit projects

NIS 30 million per year will fund new technologies and help startups run pilots of their products by speeding up regulation

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

Traffic on a Tel Aviv highway. (Craig Johnson)
Traffic on a Tel Aviv highway. (Craig Johnson)

The Transportation Ministry and the Innovation Authority said on Wednesday they were starting a new NIS 30 million ($8.4 million) a year pilot program to boost innovation in transportation and make Israel a hub for new technologies in the sector.

The goal, said the organizers, is promote and grow companies that have innovative ideas in the fields of transit, traffic and transportation, in order to make Israel’s transportation more efficient and promote smart transportation around the world.

The program will seek to boost companies operating in a variety of fields including autonomous vehicles, electric vehicles, connected vehicles, ridesharing and carpooling models, monitoring technologies and processing of traffic data, new ways of operating transportation services, reducing traffic congestion and accidents, minimizing the use of oil and encouraging use of public transportation.

“Creating pilot programs in an environment simulating real-world transportation conditions will allow Israeli startups to develop rapidly and penetrate markets more quickly,” said Transportation Minister Israel Katz in a statement announcing the initiative. “Technology is progressing by leaps and bounds, and it is our governmental duty to guide these advances from a regulatory standpoint so that they can be implemented as soon as possible.”

On the Ayalon Highway, workers lay out smart studs developed by Israeli startup Valerann (Courtesy)

The idea, he said is to transform Israel into a “hub of innovation for the future of transportation and smart technology.”

The program is intended for Israeli tech companies in the field of transportation. They will receive financial support of 20%-50% for approved R&D expenses – with additional support of up to 75% of R&D expenses for projects that can demonstrate significant potential to streamline and improve transportation within Israel.

The program will help offset the risks involved in R&D, without taking a stake in future profits. Companies will return their grants to the Israel Innovation Authority via royalties from sales only if an initiative has been commercialized.

It will be the first time that the Israel Innovation Authority will be funding such pilot programs as part of its strategy to support the growth of technology companies in Israel.

For its part, the Transportation Ministry will help companies get the regulatory permits they need to carry out their pilots. A dedicated internal team will help fast-track requests for regulatory approvals to support the technologies. This regulatory shakeup could also pave the way to new and updated regulations, so as to allow for swifter adaptation of technological change.

Minister of Economy and Industry Eli Cohen said that while Israel’s innovation ecosystem “has become a global role model,” its transportation system still needs to catch up.

“By launching this pilot program, we are enabling the industry to open new avenues, and startup companies in the transportation sector to grow and mature,” he said.

Companies selected for the program will have to prove their level of technological innovation, the uniqueness of their project, and management’s ability to lead the program to a commercial success. They will also have to show the overall effect their project can have on improving transportation in Israel and making it more efficient – in particular, reducing traffic congestion and collisions, reducing oil dependence and encouraging a transition to public transportation

Aharon Aharon, CEO of the Israel Innovation Authority (Courtesy)

“Operating programs and pilots in real-time environments with adapted regulation will allow Israeli technology companies to offer proof of concept and quickly penetrate markets,” said Aharon Aharon, CEO of the Israel Innovation Authority.

“The claim is often made that regulation and not technology is what prevents our world from transforming in the way many technology leaders are predicting. For this purpose, the Israel Innovation Authority is joining together with the transportation industry to spur the type of innovation which has advanced beyond the laboratory towards trial environments by focusing on such pilots.”

The goal of the program is to provide tech companies with funding for the advanced stages of development, necessary for commercializing their products, said Ami Appelbaum, the chairman of the Israel Innovation Authority.

The program aims to provide the selected companies access to infrastructure, data and sites over which the government has access and regulatory oversight. This will open the “door for tech companies to undertake tests that were not possible in the past, and we create an opportunity to forge innovative regulations for the entire Israeli economy for the future.”

The project was set up together with the Fuel Choices and Smart Mobility Initiative.

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