Israel's start-ups are considered one of the country's competitive advantages in the global high-tech and life sciences industries. However, a new report by PricewaterhouseCoopers LLP (PwC) says that emerging economies are breathing down Israel's neck and may have already passed it.
PwC says in its "Race for Global Leadership: Medical Technology Innovation Scorecard" that start-up activity in Israel's medical devices sector is less than in countries such as India, China, and Brazil. PwC measures level of activity according to the following variables: the number of new companies; the amount of money raised in the companies' early stages; the number of collaborations with universities and corporations; and the extent to which companies in each country adopt the companies' innovations.
Israel remains the leader in one key variable: venture capital investment as a percentage of GDP with 1.2%, compared with 0.3% for second place Brazil, and 0.2% for the US.
pwc Israel partner and life sciences leader Claudio Yarza said, "While this figure is ostensibly encouraging, there is little financing. Although 2010 was in the end not a bad year, 2011 is shaping up to be worse. 2011 will be a critical year for the future for Israel's venture capital industry, and only when it's over will the picture be clarified."
PwC examined nine countries, which lead innovation in the medical devices industry, and compared their competitiveness with each other. The review was by categories, including financial incentives, sources of innovation, a supportive regulatory structure, and a supporting investing community.
Yarza said, "Israel's inclusion in the report is very flattering in itself. When examining Israel's achievements on a per capita basis, there is no question that it's the leader. When we examine ourselves on an absolute scale, obviously we cannot compete with the other countries in the report because of their size."
In the category of medical innovation in general, PwC ranks Israel 6th in the world, behind the US, Germany, the UK, France, and Japan. Israel is still ahead of emerging economies, but PwC warns that, by 2020, China will likely surpass the European countries, and pass Israel.
Yarza said that Israel leads in relative variables, such as the number of researchers and R&D investment per capita, but that in the absolute variables, such as the number of patents and researchers, Israel slides to toward the bottom to join Brazil and India.
Published by Globes [online], Israel business news - www.globes-online.com - on January 26, 2011
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