Research and Development (R&D) investment, while recognized as a leading growth engine for modern world economies, is nonetheless considered fairly risky. This makes R&D investment by the private sector scarce, which is a serious obstacle to the goal of maintaining Israel’s lasting competitive edge: Applied Innovation. The Government’s willingness to share the risk, greatly aids in reducing it and in ensuring the process’ successful fruition
The Office of the Chief Scientist (OCS) in the Ministry of Industry, Trade and Labor (MOITAL), oversees all Government sponsored support of R&D in the Israeli industry. It operates through the R&D Fund, as well as a gamut of domestic and international programs, agreements and collaborations. The OCS annually supports hundreds of projects, from incipient concepts within a pre-seed framework, followed by support of incubator and start-up companies, through autonomous industrial R&D enterprises.
The R&D Fund gives grants to “Approved R&D Programs”, which are programs lasting one or more years, resulting in the development of a new product or in a significant improvement to an existing product. The purpose of the aid is to promote the technological project to a phase where it could raise significant private funding for further development and commercialization.
The developers can use the aid for proving technological and business feasibility of the idea and for protection of intellectual property. In other words, for building a prototype, file for patent, perform market research, draft a business plan and for the initial business development.
The grant provided under the Tnufa program is up to 85% of the approved budget to the grant limit of $51,000 US.
A company is obligated to pay royalties when a government-assisted R&D project results in a commercially successful product. Normally, royalty payments are a specified percentage of the total annual revenues derived from the sale of a developed product. Total royalty payments may not exceed the amount of the grant