According to BioJerusalem executive director Chen Levin, Jerusalem aims to be number one in Israel's biomed sector by overtaking Rehovot. The city's biomed industry is already impressive. 43% of biotech research in Israel is conducted in Jerusalem with 3,250 people employed in the life science sector. Jerusalem laboratories have developed two drugs with annual sales of $1.6 billion.
BioJerusalem was set up by the Jerusalem Development Authority to help fuel the city's economic development and to attract a strong middle class population by leveraging the biomed resources available in the capital.
Levin lists four factors that combine to make Jerusalem an especially attractive location for biomed companies.
Firstly, the city has a strong academic base. She said, "The Hebrew University is number 12 in the world in biomed patents and there is a large number of people with Ph Ds in the biology, medicine, pharmacology and chemistry sectors."
The second factor is the human resources infrastructure. She said, "12% of employees in Jerusalem are involved in the biomed and health sector if we include academia." In this context, Levin mentions the student program "New Spirit" which encourages students near the end of their studies to integrate into the city's industry.
The third factor is research and development. She said, "The Bioline incubator in Jerusalem is the only one in the country dedicated to biotechnology and it is awarded $1.5 million per project by the Chief Scientist compared with $600,000 per project in regular incubators."
Levin, who used to be the financial director of an incubator, added, "There is also the Val Leer Incubator, which is not dedicated to biomed but has a high concentration of medical devices companies. In addition, the School of Pharmacy at the Hebrew University is undergoing reorganization and will now be more oriented towards developing pharmaceuticals. At the same time, Hadassah Hospital will set up a center for clinical trials."
The fourth and final factor is the existing biomedical industrial sector in Jerusalem. Levin said, "In Jerusalem there are already companies like Teva, Medinol and Brainsway and there are large companies alongside start-ups. In total there are 130 companies in the sector in Jerusalem, which is 35% of all companies in the sector in Israel. This is the second largest concentration of companies after Rehovot."
This last sentence embodies the reason why despite all Jerusalem's achievements in the biomed sector, BioJerusalem was set up. Levin said, "We are still not number one and the aim is to take the sector and leverage it to bring economic growth because biomed has been identified as a sector in which Jerusalem has a competitive advantage. The municipality, ministry of finance, and prime minister's office have all mobilized for this cause and approved a growth plan for Jerusalem in 2006 with a five year budget of NIS 305 million. A growth plan for 2011-15 is currently being discussed as a successor to the 2006 plan and Levin expects even higher sums to be allocated to this.
Speaking about the success of the current growth plan she said, "In the past three years the number of companies has grown by 27% and the number of employment places by 40%. The forecast is a further 2,000 places of employment."
She added, "We have two types of incentives. Firstly Jerusalem is a Development Zone A that gives income tax reductions. This status was in doubt but recently extended. In addition, companies can receive considerable grants of between NIS 600,000 NIS 2,500,000."
Levin continued, "Over the past year we have seen initiatives by Beer Sheva and Haifa. But I think we are unique because we have a commitment from the government. Also our mayor Nir Barkat, who himself came from high tech is personally very committed and involved on this subject."
BioJerusalem receives many enquiries and questions and strives to be an information center for the industry. These enquiries are on a range of topics from doctors abroad who want to immigrate to Israel and are looking for work to companies who are looking for production employees. BioJerusalem used to give pilot business plans but today prefers disbursing a grant and letting companies hire their own private consultants.
One of BioJerusalem's main functions is to attract new companies to the city including brand new companies or those already operating elsewhere. One such success was Omrix, which moved from Tel Hashomer to Jerusalem and was acquired by Johnson and Johnson. An additional aim, en route to enabling Jerusalem to become Israel's top biomed city is to foster the activities of large international companies including both collaborations and establishing R&D installations.
Levin does not see companies boycotting Jerusalem for political reasons. She said, "Politics is for the headlines but is not a consideration. If companies like Intel, for example, cannot be profitable in Jerusalem then they simply would not be here. Economics prevails over politics."
She sums up BioJerusalem's main aims as preserving the city's quality work force, upgrading infrastructures and making them more accessible and marketing. She said, "We want to create awareness that there is a strong industry here and that people will not think automatically about Rehovot when they think of biomed."
Published by Globes [online], Israel business news - www.globes-online.com - on July 13, 2010
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