State of Israel
Media Release
info@cbs.gov.il www.cbs.gov.il
Fax: 02-6521340
_____________________________________________________________________________________________________________________
Jerusalem,
April 1, 2015
087/2015
Israel's Biotechnology Industry: 2010–2013
Biotechnology is the application of science and technology to living organisms (as well as parts, products
and models thereof) to alter living or non-living materials for the production of knowledge, goods and
services.1
 The data show increases in the indicators of activity in the biotechnology industry in Israel.
However, its share in Israel's total economic activity is still marginal.
 During 2010–2013, 276 biotechnology companies operated in Israel, 259 of which were still
active in 2013. Biotechnology is an "emerging technology", i.e., it is characterized by a large
number of small companies. During these years, 77% of the companies had fewer than 20
employee jobs.
 Another characteristic of an emerging technology is substantial growth rates. The number of
employee jobs in the companies increased by 17%, from 5,381 employee jobs in 2010 to
6,293 employee jobs in 2013. In comparison, during this period, there was a 10% increase in
the number of employee jobs in the business sector overall.
 Revenue in the biotechnology companies was NIS 2.9 billion in 2013, an increase of
approximately 10% compared to 2010. During 2010–2013, exports accounted for
approximately 80% of the companies' revenue.
 Many multi-national companies R&D establish centres in Israel in order to take advantage of
Israeli creativity and innovation for their production processes. Approximately 6% of
employee jobs in R&D companies in 2013 were in R&D centres, where the highest wages
were paid (NIS 240,000 per job).
1
OECD – A Framework for Biotechnology Statistics.
Written by Evyatar Kirschberg and Nissan Yehuda – Business-Economic Statistics
For explanations and clarifications, please contact the Media Relations Unit, at 02-652-7845
 Most of Israel's biotechnology activity was concentrated in "Human and veterinary health".
Approximately 72% of employee jobs and 80% of revenue were concentrated in companies
that developed and manufactured technologies and products in "Human and veterinary
health".
 Annual wages per job in the R&D centres (NIS 240,000) were 35% higher than in Israeli
companies.
 In 2013, the Chief Scientist's Office at the Ministry of Economy provided a total of NIS 101
million in R&D grants to the biotechnology companies. Small companies (up to 50 employee
jobs) received 74% of the grants.
 Of the biotechnology companies, 43% were located in the Central District (excluding the Tel
Aviv District), and 46% were located in the following cities: Jerusalem, Tel Aviv-Yafo, Nes
Ziyyona, and Rehovot.
 Israeli bodies accounted for approximately 1.5% of biotechnology patents issued worldwide.
This places Israel 14th among the OECD countries, similar to countries such as Denmark,
Australia, and Spain.
Tables (in English and Hebrew)
This release presents data for 2010–2013 on biotechnology companies in the business sector.
Biotechnology is a general name for technology that makes use of biological processes for the
manufacture various products in the areas of manufacturing, agriculture, and medicine. The significant
breakthroughs and scientific advances of the past decades promise a new era in many and varied fields of
biotechnology – such as the food industries, personalized medicine, and waste management – which hold
the potential for substantial growth in the economy. The population of biotechnology companies presented
here includes only those companies whose activity matched the OECD definition. The sources of
information for the companies' activity were mainly the 2010 Survey of Biotechnology Companies, the
CBS's Business Register, data from the IVC Research Center,2 and various sources and surveys of the
CBS and the Internet.
To this population were added various data from administrative sources that report to the National
Insurance Institute and the VAT authorities, such as data on revenue, gross wages, employee jobs,
geographic region, etc.
2
The IVC Research Center is a research centre that follows and analyses the Israeli high-tech industry.
Israel's Biotechnology Industry 2010–2013
2
Biotechnology Activity in Israel
The data show increases in the indicators of activity in the biotechnology industry in Israel. However, its
share in Israel's total economic activity is still marginal.
Revenue (subject to VAT)
In 2013, total revenue for the biotechnology companies was NIS 2.9 billion, an increase of approximately
10% compared to 2010. The largest total revenue was in 2012, approximately 6% higher than in 2013.
During 2010–2013, exports accounted for approximately 80% of the companies' revenue.3 In 2013,
companies with 150 or more employee jobs had a larger percentage of exports (88% of revenue). The
other companies also had high export rates (72%) compared to similar companies in the economy.
Approximately 80% of the revenue was concentrated in large companies (50 or more employee jobs). Yet,
during 2010–2013, the size groups' relative shares changed, largely as a result of the companies'
development and movement among size groups.
During 2013, revenue per employee job was NIS 458,000. Table A shows data for revenue per employee
job by size group (employee jobs). It can be seen that revenue per employee job increased as company
size increased, but the increase was not linear.
Table A.- Revenue per Employee Job, by Size
Group
NIS thousand
Total
854
Multi-year
average
(2010–2013)
874
1–19
20–49
50–249
250+
238
303
601
615
285
245
647
635
Size group
(employee jobs)
2013
Employee Jobs
In 2013, 259 companies were active in the biotechnology field, and they had 6,300 employee jobs
(according to National Insurance data). This was a 17% increase compared to 2010, when there were
5,400 employee jobs.
3
We used revenue exempt from VAT as an estimate of exports (see Definitions and Explanations).
Israel's Biotechnology Industry 2010–2013
3
Most of the companies in the biotechnology industry are small; over the years, approximately 77% of the
companies employed fewer than 20 employee jobs (Table 1). However, the small biotechnology companies
account for a larger percentage of employment in the biotechnology industry, compared to small
companies in other industries. For example, in 2013, biotechnology companies with up to 100 employee
jobs comprised approximately 50% of all employment in this type of company, compared to 25% in the
Manufacturing, mining, and quarrying industry (2011 Classification).
Expenditure on Wages and Wages per Employee Job
During 2010–2013, total expenditure on wages increased by approximately 27%, from NIS 980.4 million in
2010 to NIS 1,250.0 million in 2013 (Diagram 5). In the large biotechnology companies (150 employee jobs
and up), wages increased by 52% during 2010–2013, compared to only 13% in companies with fewer than
150 employee jobs.
The average wage per employee job increased due to an increase in wages larger than the increase in
number of employee jobs. Diagram 6 shows a moderate increase in wage per employee job (10%) during
the years 2010–2013. With the deduction of the consumer price index, real wages increased by only 3%
during this period.
Ownership (Israeli and Foreign) and Multi-National Companies' Research Centres
Foreign companies and investors identify potential in the Israeli economy, focusing on high-technology
companies. These foreign bodies establish and/or purchase Israeli companies, including R&D centres of
international companies that are advanced in R&D activity.
In 2013, 39 foreign-owned companies were active, 13 of which were R&D centres (Table B). In these
companies were concentrated 44% of the employee jobs and 59% of the revenue. Wages per employee
job in foreign companies were 26% higher than in Israeli companies.
Many multi-national companies R&D establish centres in Israel in order to take advantage of Israeli
creativity and innovation for their production processes. Approximately 6% of employee jobs in
biotechnology companies in 2013 were in R&D centres, where the highest wages were paid (NIS 240,000
per job). The presence of multi-national companies in the industry, especially the R&D centres, signifies
that the Israeli industry is well-supplied with persons having knowledge and abilities, which allows it to
develop and withstand the international competition.
Israel's Biotechnology Industry 2010–2013
4
Table B.- Selected Data for 2013, by Type of Ownership
Ownership
Number of
companies
Grant from
Chief
Scientist
Revenue
Employee jobs
259
220
39
2,884
1,189
1,695
101
61
40
199
178
224
Absolute
numbers
6,293
3,496
2,796
13
111
19
240
353
NIS million
Total
Israeli
Foreign
Thereof: R&D
centres
Wages per
employee job
NIS thousand
Biotechnological Applications
A biotechnological application is the intended use of the technology and the products developed or
manufactured by the companies. Most of the activity in the biotechnology companies in Israel was
concentrated in the area of "Human and veterinary health"; approximately 72% of the employee jobs and
80% of the revenue were concentrated in companies that developed and manufactured technologies and
products for application in "Human and veterinary health".4 Approximately 18% of the employee jobs were
concentrated in agricultural biotechnology, and the remaining employee jobs were concentrated in other
applications. The employee jobs were divided similarly for revenue (Table C).
Table C.- Selected Data for 2013, by Application
Application
259
2,884
101
Wages per
employee
job
NIS
thousand
199
210
2,333
96
207
4,558
28
196
2
179
1,151
14
7
35
320
1
2
139
214
296
288
Number of
companies
Revenue
Grant from
Chief
Scientist
NIS million
Total
Human and
veterinary health
Agricultural
biotechnology
Environment
Other
Employee
jobs
Absolute
numbers
6,293
Wages per employee job were not uniform across the areas. They varied among the types of ownership,
as can be seen in Table B. Table D shows the wages per employee job and revenue per employee job, by
application and ownership. The highest wages per employee job were in R&D centres engaged in
biotechnological R&D in "Human and veterinary health" (NIS 240,000). Revenue per employee job was
highest in Israeli-owned companies whose activity was intended for "Other" types of application (NIS 1,112
thousand).
This is a combination of three applications: Human health – large molecules, Human health – other therapeutics,
and Veterinary health. For definitions, see Definitions and Explanations.
4
Israel's Biotechnology Industry 2010–2013
5
Table D.- Revenue and Wages per Employee Job, by Biotechnological Application and Ownership, 2013
NIS thousand
Biotechnological application
Total
Ownership
Israeli
Foreign
R&D
centres
Revenue
per employee
job
340
648
Wages
per employee
job
178
222
314
240
Human and
veterinary health
Revenue
Wages
per emper employee
ployee
job
job
309
182
807
231
314
240
Agricultural
biotechnology
Revenue
Wages
per emper employee
ployee
job
job
195
163
147
194
-
-
Environment
Other
Revenue
per employee
job
117
-
Wages
per employee
job
139
-
Revenue
per employee
job
1,112
-
Wages
per employee
job
214
-
-
-
-
-
Most of the growth in biotechnological activity was in "Human and veterinary health". During 2010–2013,
revenue in this application increased by 20%. This contributed 150% to the growth in overall revenue,
whereas revenue decreased in the other applications (Diagram 7).
In contrast to revenue, the total number of employee jobs in the biotechnology companies increased in
every year during the period under discussion. Here, too, most of the jobs were added in the "Human and
veterinary health" application (71% of the total growth in jobs); 23% of the increase in jobs was in
"Agricultural biotechnology" (see Tables 1–4).
Public Financing for Biotechnology R&D Activity (Grants from the Chief Scientist at the
Economy Ministry)
The Chief Scientist at the Economy Ministry is the government's main operational arm for everything
concerning direct financing of commercial R&D in commercial companies. The data supplied by the Chief
Scientist can be used to describe the grants that were distributed during this period to biotechnology
companies for the purpose of carrying out commercial R&D.
In 2013, there was a decrease in the R&D grants received by biotechnology companies. In this year, the
companies received grants worth NIS 101 million. Diagram 8 shows how the grants were divided, by
company size, geographic location, and biotechnology application.
Israel's Biotechnology Industry 2010–2013
6
Demographics of Biotechnology Companies
Openings and Closings of Businesses
Table E shows numbers of companies by their opening year and their survival from 2010 to 2013. For
companies that opened before 2010, data were available only for those that were active during 2010.
There was no information on companies that opened and closed before 2010. During the years 2010–
2013, 48 new biotechnology companies opened and 17 companies closed.
Table E.- Companies by Opening Year
and Year of Activity, 2010–2013
Number of companies
Year of activity
Total
Opening year
Up to 2000
2001–2005
2006–2009
2010
2011
2012
2013
2010
252
2011
265
2012
254
2013
252
78
56
85
45
-
78
56
85
45
13
-
75
65
85
44
11
5
-
76
67
85
42
11
5
8
Geographic Distribution
Table F shows that 43% of the companies operated in the Central District and approximately 15% operated
in the Jerusalem District. In the Central, Tel Aviv, Haifa, and Jerusalem districts, more than 80% of the
companies' biotechnological applications were in the area of "Human and veterinary health". The cities of
Jerusalem, Tel-Aviv Yafo, Nes Ziyyona, and Rehovot accounted for 46% of the companies.
Table F. – Companies by Application and District, 2013
Biotechnology
application
Total
Human and
veterinary health
Agricultural
biotechnology
Environment and
Other
44
44
22
112
Tel
Aviv
42
33
45
15
53
34
14
3
5
1
13
4
6
4
6
3
5
6
-
Jerusalem
Israel's Biotechnology Industry 2010–2013
Northern
Haifa
Central
Southern
17
7
Biotechnology Activity by Industry
Diagram 9 shows that in 2013, 82% of the companies were concentrated in the R&D in the natural
sciences industry. In contrast, this industry was the source of only 19% of the revenue, and the
Pharmaceuticals industry was the source of 77% of the revenue. Revenue in companies in the R&D
industry was low because these companies engage in research that has not yet matured. In contrast to
these companies, the large companies are concentrated in the Pharmaceuticals industry. Most of the
employee jobs in biotechnology companies were in the R&D or Pharmaceuticals industries (42% of the
jobs in each of these industries).
International Comparisons
The international comparison data are based on the OECD's Key Biotechnology Indicators.5 The indicators
are updated annually by the member countries, mostly by means of biotechnology surveys. Israel's
biotechnology industry ranked mid-range among the OECD countries and was similar to that in Ireland,
Denmark, Belgium, and Finland.
Diagram 10 indicates the number of companies in each country in 2012 (or the latest relevant year), and
the percentage of dedicated biotechnology companies.6 Israel had the largest percentage of dedicated
biotechnology companies, due to its large percentage of small start-up companies.
Another comparison indicator is a country's percentage of the patents registered under the Patent
Cooperation Treaty. Patents registered by Israeli bodies comprised 1.5% of all biotechnology patents
issued worldwide. This placed Israel together with countries such as Denmark, Belgium, and Sweden.
Procedures
Much data from the 2002 and 2010 biotechnology surveys was obtained and processed. The survey
questionnaire included a variety of topics, such as fields of biotechnological activity, barriers to activity,
sources of financing for R&D, expenditure on R&D, patents, and employment structure. The information in
this publication was limited because it came from administrative data that included only a partial
breakdown. Therefore, it was necessary to classify and characterize the companies based on data from
various sources.
5
6
The latest data for Israel are for 2010.
I.e., 75% or more of the company's R&D expenditure is for biotechnology R&D.
Israel's Biotechnology Industry 2010–2013
8
In the first stage, a population of 276 companies that were active during 2010–2013, and which matched
the OECD definition,7 was defined. (The population included both companies that were active during all the
years, and companies that were only active during part of the time period.) Descriptions of companies and
their activity found in the various sources were used to determine whether a company belonged to the
population.
The following sources were used to define the population:
1. The 2010 biotechnology survey included 218 companies that had data on all the relevant
characteristics. This group comprised most of the companies in this publication.
2. The following sources yielded 58 companies: IVC data, the Business Register, the Chief Scientist at
the Economy Ministry, and the Internet.
In the second stage, after the companies were chosen and the relevant data were collected, each company
was given three different classifications:
1. Main biotechnology application of the company's activity
2. Main biotechnological field of the company's activity
3. Whether the company's main activity was R&D (i.e., 75% or more of the company's R&D
expenditure was for biotechnology R&D)
The companies were classified into 7 biotechnology fields, as was done in the 2010 biotechnology
survey. These included: DNA/RNA, proteins and other molecules, cell and tissue culture engineering,
process biotechnology techniques, bioinformatics, gene and RNA vectors, and nano-biotechnology (for
definitions, see the questionnaire of CBS Publication No. 15378).
The number of biotechnology applications decreased from 9 that appeared in the survey to 4 presented
in this publication: the human health and veterinary health applications were combined, and the agricultural
biotechnology applications were combined. The other applications remained unchanged (for definitions,
see the questionnaire).
A company whose main activity is R&D is one in which 75% or more of the company's R&D expenditure
is for biotechnology R&D. Exact numbers for R&D expenditure could be obtained in the 2010 biotechnology
survey, but for this publication, we did not approach the companies using a survey. Therefore, this was
determined for each company based on the information from the above sources and the company's
economic classification at the CBS.
7
Biotechnology is the application of science and technology to living organisms, as well as parts, products and
models thereof, to alter living or non-living materials for the production of knowledge, goods and services (OECD
definition).
8
CBS. (2014). Survey of Biotechnology Companies in Israel, 2010. Publication No. 1537. Jerusalem: Author.
Israel's Biotechnology Industry 2010–2013
9
There was a discrepancy between the number of biotechnology companies in 2010 based on the survey
(233) and the number of companies found for this publication (251). This occurred because the framework
of the biotechnology survey was selected from tens of thousands of companies operating in the Israeli
economy, due to the fact that there was no previous organized information on this population. As a result of
this situation, some very small companies for which no information was obtained in 2011 were not included
in the survey, but were identifiable in 2014 after several years of activity, and were therefore included in the
population. It should be noted that these were very small companies (a single-digit number of employee
jobs; see Table G).
Table G.- Companies Participating in the 2010 Biotechnology Survey,
by Size Group, 2010–2013
Year
2010
Participated in 2010
Biotechnology survey?
Size Group
No
Yes
Total
48
214
1–5
28
91
6–10
2
36
11–15
2
18
16–19
.
17
20–49
2
33
50–149
.
16
150–249
.
3
250+
.
4
It is reasonable to assume that among companies active in 2013, there were very small companies that
were not included in the basis for this publication, and will be identified in the future.
Terms, Definitions, and Explanations
Active businesses
A business unit is defined as active during the calendar year of activity if positive activity was recorded for it
during at least one month of that year. Positive activity can be recorded as positive revenue, positive
inputs, or employee jobs.
Employee jobs
The number of jobs of workers (permanent and temporary) who worked for at least one day during the
calendar year (or were on paid leave due to illness, vacation, army reserve duty, etc.), and are on the
payroll of establishments or institutions.
Israel's Biotechnology Industry 2010–2013
10
If a person worked as an employee in several workplaces, the number of employee jobs is the same as the
number of workplaces in which he worked.
Revenue
The source of the revenue data in this publication is the VAT authorities. The data include 3 possible types
of revenue:
Revenue subject to VAT – Revenue from the sale of goods and provision of services in Israel (except for
revenue at 0% tax rate), as well as from the sale of fixed assets of the company. The revenue includes all
indirect taxes due on products and services, but not the VAT itself.
Revenue at 0% VAT Rate – Mainly from export of goods and services, sale of fresh fruit and vegetables,
and provision of services to tourists from abroad (which is, in effect, export of services); the VAT rate on
this is 0%.
VAT-exempt revenue – Revenue from transactions for which the dealer is not entitled to a return of VAT
on inputs: For example: sale of diamonds within the Trade industry, rental of residential property, and sale
of goods and provision of services for consumption in Elat (except for sale of vehicles and durable goods).
Average annual wages per employee job
Gross payments paid for all employee jobs during the year of activity, including basic wages, cost-of-living
allowances, seniority payments, back-pay, advance payments, overtime, premiums, benefits, grants and
various supplements (current or non-recurring), such as on-call, shifts, 13th-month salary, transportation,
convalescence, education and proficiency allowances, and car allowance. Gross wages do not include
additional work expenditures or payments made by the employer to funds (such as pension or insurance
for employees), payroll tax, etc. The annual gross wages are divided by each employer's annual average
number of employee jobs.
Openings and closings of businesses
The opening of a business is defined during the year of activity in which the date of registration of the
opening of the business with VAT occurs. Similarly, the closing of a business is defined during the year of
activity in which the date of registration of the ending of the business's activity with VAT occurs, i.e., when
the company stops reporting activity (wages, revenue, jobs, etc.).
Israel's Biotechnology Industry 2010–2013
11
Emerging technology
An emerging technology is, in essence, a new technology whose applications are not yet fully matured, or
whose applications are not widely used or have not reached the technology's full potential. However, in
certain cases, when a widely-used technology develops very quickly, its new applications can be defined
as emerging technology. Sometimes an emerging technology is defined according to the goal it is intended
to achieve (e.g., the search for new clean energy sources) rather than as the characteristics of a particular
scientific/technological area.
Industry
The main activity engaged in by the business. The industries are presented in the publication according to
the Standard Industrial Classification of All Economic Activities 2011.9
Foreign ownership
An Israeli company, more than 50% of whose capital stock is held by a foreign resident (companies or
individuals).
9
Central Bureau of Statistics. (2011). Standard Industrial Classification of All Economic Activities 2011. Technical
Publication No. 80. Jerusalem: Author.
Israel's Biotechnology Industry 2010–2013
12
Biotechnology applications
Biotechnology application
Description
Human health – large molecule
therapeutics and monoclonal antibodies
produced using rDNA technology.
Human and veterinary health
Human health – other therapeutics,
artificial substrates, diagnostics and drug
delivery technology etc.
Veterinary health – all health
applications for animals.
GM agricultural biotechnology – new
varieties of genetically modified (GM)
plants, animals and micro-organisms for
use in agriculture, aquaculture, and
silviculture.
Agricultural biotechnology
Environment
Non-GM agricultural biotechnology –
New varieties of non-GM plants, animals,
and micro-organisms for use in
agriculture, aquaculture, silviculture, bio
pest control and diagnostics developed
using biotechnology techniques (DNA
markers, tissue culture, etc.)
Environment – diagnostics, soil
bioremediation, treatment of water, air,
and industrial effluents using microorganisms, clean production processes.
Natural resource extraction –
applications for mining, petroleum/energy
extraction, etc.
Other
Industrial processing – bioreactors to
produce new products (chemicals, food,
ethanol, plastics, etc.), biotechnologies to
transform inputs (bioleaching, biopulping,
etc.)
Non-specific applications – research
tools etc.
Israel's Biotechnology Industry 2010–2013
13