Israel withdraws from European R&D program

In the wake of the law passed by the Knesset last week abolishing the reasonableness standard in judicial review of ministerial and government decisions, international organizations have taken steps which will exact a price for Israel’s tech industry.

Globes has learned that for the first time in 15 years, Israel will not take part in the EUREKA network’s Eurostars program for international funding program for SMEs wishing to collaborate on R&D projects that create innovative products, processes or services.

EUREKA, which promotes R&D and innovation ventures, is one of the biggest R&D programs in Europe, which was founded in 1985. Israel has been a member since 2000 and today is one of 40 member countries along with the European Commission. In 2010-2011, the organization even had an Israeli president.

A source who has worked in the past for EUREKA told “Globes” that EUREKA generally and Eurostars in particular are very important programs for Israel’s tech industry, which produce strong results. The source also says that due to the unstable political situation, today it would not be possible to appoint an Israeli president to the program, as happened in the past.

Just last month Israel cut about NIS 100 million from the Innovation Authority’s budget, which raises the question about whether the cut will be reflected in international collaborations, in encouraging research and development cooperation and investments, areas that the Innovation Authority supports.

EUSP delegation to Israel canceled Also following the passing of the law abolishing the reasonableness standard the European Startup Prize (EUSP) has canceled the delegation that was due to visit Israel later this year as part of the European round of visits.

EUSP is an EU initiative together with private organizations in the global high-tech industry to promote collaborations with startups dealing with green transport in investment platforms. EUSP acts as a remote accelerator for selected companies to help them expand in Europe. Every year, EUSP receives applications from over 600 startups.

EUSP said, “We will visit major technology events only in countries where democratic values are respected and an independent judicial system is maintained.”

The statement adds, “EUSP will remain the ‘promised land’ for Israeli startups that want to expand their scope of activity in Europe, because sustainable innovation can only occur in a stable and democratic environment. Our award was founded on the basis of values that we cherish. These include tolerance, gender equality, and of course climate activity. We hope that the Israeli government will rethink its actions, which cause great concern for its economy as a whole and the high-tech sector in particular. EUSP will be happy to send the startups it works with and its partners to Israel as soon as the current judicial overhaul ends.”

Israel Innovation Authority said, “Israel is not participating in the current Eurostars call for proposals, although there is activity in other funding instruments in the Eureka network. The program is very cumbersome from an operational point of view, and there are parallel, more flexible tools that provide a good response to these needs.”

“Israel threatened by a brain drain and huge economic damage

The German Startups Association has published a declaration of support for Israeli startups and warned about the economic damage that will be caused by the judicial overhaul. The Association was founded in Germany in 2012 and represents the interests of startups in a range of areas: in the political, business and public arenas. The Association has over 1,000 members and works to make Europe as a whole and Germany in particular a fertile and rewarding arena for startups.

“The Israeli high-tech industry is one of the best in the world. However, in order to exist in the long term, innovation needs an open and pluralistic society and this is where an “axe” has been placed on Israel’s economic future,” says German Startups Association CEO Christian Miele, in a statement published by the organization. It adds that to succeed, startups need an environment that supports openness and diversity, and in light of the recent moves of the current government led by Benjamin Netanyahu, “Israel is threatened with a brain drain and huge economic damage.”

Smotrich: A recovery in high-tech investments

Last Tuesday the Knesset passed the “Angels Law”, which includes, tax exemption for foreign financial institutions extending loans to Israeli tech companies.

Minister of Finance Bezalel Smotrich said that the law aims to provide “an enormous boost to Israeli high-tech, through a law that actually promotes the continued establishment of Israel’s status as a startup nation.”

Smotrich added, “Due to the global crisis, we can already see a recovery in high-tech investments, and the Israeli government is taking an important and significant step to continue strengthening and developing Israeli high-tech.”

Published by Globes, Israel business news – en.globes.co.il – on July 30, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.