In honor of Jerusalem Day, join us for a 3-part series of interviews with a few of Jerusalem’s movers and shakers, who work year-round on promoting and growing the city’s startup ecosystem.
Since it was established the Jerusalem Development Authority has accumulated much experience in promoting public projects in the capital and it serves today as the leading body in the planning and development of the city. The Jerusalem Development Authority acts as the body which generates, encourages and promotes the development of the city to increase its beauty and strengthen its economy.
JLM Day Interview with the JDA’s Itzik Ozer
Looking back just four years ago, nobody considered Jerusalem to be a tech hub. What changed?
The Jerusalem tech success story is still a well kept secret. In fact, in the last four years we have seen an exponential increase in the number of companies established each year with only 25 new companies established in the city in 2012, and over 100 new companies established in 2015. The amount of venture capital being invested in the city has increased 500%, totaling $260M in 2015. There have been 8 new investment bodies established in Jerusalem since 2012. One of the most interesting data points, is the increase in tech events from 20 annually in 2012, to over 350 events, meetups, and international conferences in 2015. Jerusalem is now home to Mass Challenge, one of the leading accelerators in the world, and the largest accelerator in Israel.
The city has always had potential to be a tech powerhouse, due to a combination of factors: the leading academic institutions, such as the Hebrew University, ranked as one of the top universities in the world, and the best in Israel, plus Israel’s premier art school The Bezalel Academy of Art and Design; multinational R&D centers like Intel and Cisco; and leading investment bodies such as OurCrowd, JVP, and others. Only when these elements were combined, through the development of a tech ecosystem and social network, did the innovation in the city take off.
Essentially, we had all of the ingredients here all along, and mixing them together, through the combination of accelerators, community NGO’s like MadeinJLM, and government initiatives, have promoted the success of the city as the leading emerging tech hub in the world and one of the top 50 ecosystems globally, according to Startup Compass. Moreover, the city of Jerusalem has shown its deep and continuous commitment to the support and expansion of the high-tech and biotech sectors in Jerusalem.
Is there any advantage to investing in Jerusalem-based startups?
There is good reason for this city-wide increase in startups. In addition to the vibrant ecosystem, there are many local and national incentive programs in Jerusalem, which means that your investment goes further in the city. Cash flow companies can benefit from 9% corporate tax, and reduced taxation on dividends and companies can get up to $120,000 non diluting grants from the Jerusalem Development Authority through the Jnext or BioJerusalem programs. Additionally, the city hosts a plethora of government subsidized accelerators, including Mass Challenge, Siftech, Atobe, Yazam Balev, and HU Start. Unlike many other accelerators around the world, none of the aforementioned accelerators take equity in the companies. They are all either non-profits or academic affiliated programs. The JDA supports companies in the city through infrastructure development, sponsoring tech events, and even connecting companies with business delegations and potential partners.
In what fields is Jerusalem leading the Startup Nation?
We can see how this combination of the natural potential of Jerusalem, and the support of the Jerusalem Development Authority, has led not only to overall development, but also to specific areas which particularly underline the strengths of Jerusalem. The biotech, pharma, medical device, and digital health startups thrive in the city. With the majority of companies in this field choosing Jerusalem.
Additionally, fields that need a strong combination of tech and designers thrive in the city, since 50% of the design talent in Israel is trained in Jerusalem. Leading consumer facing startups, such as Lightricks, Glide, and Abe’s Market call Jerusalem home. While another exceptionally strong field is image processing. Leading the pack in this field is Mobileye, along with Orcam, Briefcam, and many others.
Today, on Jerusalem Day, you are approving the economic development plan of Jerusalem for the next 5 years. Can you give us a sneak peek on your plans for the high-tech and biomed ecosystem?
In the next five years, JDA aims to increase significantly the number of persons employed in high-tech and biomed and make Jerusalem an international center for multinational technology companies. We see the partnership with OurCrowd as a key for achieving these goals, and the continuing development of the city of Jerusalem as the center of technology in the world.
The Israel government has just approved a budget of 850M NIS designated towards economic development in Jerusalem — that’s double the budget of the last 5 years!