The Israeli Cleantech
By
Israel Drori, Shmuel Ellis, Mali Nevo
Faculty of management Tel Aviv University
1
Basic data
• There are currently 419 cleantech companies operating in
Israel.
• These companies comprise just over 10% of the total of Israeli
High-tech companies (approximately 4,015 companies in total).
• The Israeli cleantech sector produced in 2008 an estimated total
of products and services worth between 2 and 2.5 Billion US $,
which constitute between 0.8% and 1% of the total global
cleantech market.
2
Five key aspects of the Israeli cleantech sector
1. Overall growth
2.
Sub-sectors within the cleantech industry
3.
Evolutionary stages of Israeli cleantech companies
4.
Company size
5. Ownership, Capital raised and Annual revenues
3
1. Overall growth
4
Cleantech companies in Israel by year of establishment
5
Cleantech companies in Israel by year of establishment
6
2 Sub-sectors within the cleantech
industry
7
Sub-sectors within the cleantech
industry
cleantech companies in Israel by sub-sector
materials
9%
enviornment
11%
agriculture
technology
19%
8
energy
36%
water
technology
25%
35
30
25
20
15
10
5
energy
materials
9
agriculture tecnology
water technology
enviornment
20
08
20
06
20
04
20
02
20
00
19
98
19
96
19
94
19
92
0
19
90
number of new companies
cleantech companies in Israel by sub-sector and
year of establishment (1990-2008)
3. Evolutionary Stages of Israeli
cleantech companies
10
Evolutionary stages
Seed stage
Research and Development (R&D) stage
Initial Revenue stage
Revenue Growth
11
Cleantech companies in Israel by stage of
development
Revenue
Growth
10%
Initial Revenue
38%
12
Seed
21%
R&D
31%
Cleantech companies in Israel by sub-sector and
development stage
60
nu. of companies
50
40
30
20
10
0
agriculture
tecnology
Seed
13
energy
R&D
enviornment
Initial Revenue
materials
water
technology
Revenue Growth
4. Company size
14
Company size
Average number of employees per company
av. number of employess
250
196.9
200
150
100
50
29.3
4.1
9.7
Seed
R&D
0
15
Initial Revenue
Revenue
Growth
number of employess by cleantech sub-sector
energy
28%
agriculture
tecnology
17%
enviornment
8%
16
water
technology
41%
materials
6%
5. Ownership, Capital raised and
Annual revenues
17
Average capital raised by cleantech companies by subsector (in millions of US$), 2007-2008
18
Average revenue in 2008 of cleantech companies by
sub-sector (in millions of US $)
19
The Israeli Cleantech Study
• To propose a complementary, genealogical approach to the
traditional clusters approach of industrial sectors’ evolution
• To explore genesis events and environmental characteristics
that shape the entrepreneurial culture and strategy of the
cleantech industry along time?
• To investigate how and why cleantech firms in the different
sub sectors (energy, water, agriculture, environment, material)
evolve?
• To study the origin of different founding models of the Israeli
cleantech firms, and their relations with existing clusters
Genealogy
1. Genealogy is a record of descent or linage of a group
from its ancestors to the recent generation.
2. Each genealogy is originated from founding parents
which started the entire genealogy.
3. The progenies’ birth origin is diverse.
4. It reflects the degree of association and proximity
within a network of relationships along time,
characterized by path dependent relationships among
firms along a lineage system.
5. The evolutionary trajectory of organizational
genealogy is influenced by its member affinity, mainly
parent-progenies relations (Phillips, 2000; 2005).
21
Example of Genealogy, ITC sector ( RAD- Founded: 1981)
The Israeli Cleantech sample
121
companies from
419
174
entrepreneurs from 721
28.87%
24.13 %
Average entrepreneurs par company
1.43
Max number of entrepreneurs
5
Min number of entrepreneurs
1
s.t
0.8
Networks of cleantech sub-sectors
Energy
Agriculture
Water
Environment
Materials
24
50
45
40
35
30
25
20
15
10
5
0
Origins of founders
IDF
Cleantech
Energy Industry
Biotech
Hi tech
Academy
26
Origins of founders
Hi tech
Materials
Academy
Agriculture
Environment
Water
27
Energy
Sector
Hi tech
Academy
Biotech
Energy Industry
IDF
Cleantech
Agriculture
Israeli defense industries
Vanture Capital
Engineering
Banking
Medical devices
percentage
Entrepreneurs
27.01%
47
26.44%
6.90%
46
12
6.32%
11
5.17%
9
4.60%
8
2.87%
5
2.87%
5
2.87%
5
2.30%
4
1.72%
3
1.72%
3
Sector
percentage
Entrepreneurs
Counselling
1.15%
2
Environmental Services
industry
Government
Investment
1.15%
1.15%
2
2
1.15%
2
Architecture & Planning
industry
Food industry
0.57%
1
0.57%
1
Law
0.57%
1
Low tech
0.57%
1
media
0.57%
1
Municipal
0.57%
1
Outsourcing industry
0.57%
1
Shipping
0.57%
1
100%
174
sum