Israeli gov't to support startups' pilot programs

Aharon Aharon

The startups will be given money and access to government companies in order to try out their products.

As "Globes" reported last month, government ministries and government companies are embarking upon a pilot program in which they will provide financial and regulatory assistance to startups seeking to try out the technology they have developed under field conditions in order to help the startups complete the development of their products. In the project, the startups will be able to either operate a pilot in a government company or obtain access to data possessed by the government company. The amount of government support will reach NIS 100 million a year over five years.

The Government Companies Authority and the Israel Innovation Authority today announced one segment of the program - promotion of technological innovation through support for pilots on the premises of government companies. The NIS 10 million allotted for this segment is less than other segments of the program.

The startups will receive financial support amounting to 20-50% of their approved research and development expenses. Support is likely to reach 60% in cases in which the pilot has potential to make the government company unusually more efficient. The government's participation includes the business risks incurred in development, while the government is asking only for the return of the financing provided in the event of commercial success, not a share of the startup's future profits.

The full government program, parts of which have not yet been published, will enable startups to obtain regulatory permits from various government ministries for pilots that currently cannot be carried out because of legal restrictions or regulations, in addition to providing substantial financial support.

The Ministry of Finance is still formulating its "regulatory sandbox" aimed at encouraging the Israeli fintech industry. The Ministry of Transport, Ministry of National Infrastructure, Energy, and Water Resources, Ministry of Health, Ministry of Environmental Protection, and Ministry of Economy and Industry will conduct four tracks for assisting companies in smart transportation, drones, digital health, clean-tech, etc.

Minister of Finance Moshe Kahlon said today, "The plan gives another incentive for government companies to join the digital age. Together with the innovation setups being established in these companies the program will propel the companies to the next level, thereby improving their performance, making them accessible to the public, and upgrading their level of service."

Minister of Economy and Industry Eli Cohen said, "This measure fits in with the government's decision to emphasize development of innovation in government companies and their investment in innovative technologies in their core activities, and to take action to remove barriers obstructing the government companies in adopting innovative technologies."

Innovation Authority CEO Aharon Aharon added, "We believe that through the plan, we will be able to achieve two goals: technological companies will be given access to the largest pilot sites of their kind in Israel and government companies will be given an opportunity to upgrade their systems and consequently their performances thanks to access to the most advanced technologies in the world in their field. We are creating an opening for technology companies to conduct trials that were formerly impossible and creating an opportunity to formulate innovative and leading regulation in the future for the entire Israeli economy."

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Aharon Aharon
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