Economy Minister Bennett Eyes Replacing Chief Scientist’s Office
New agency would have broader powers, including the ability to raise capital, invest in companies.
Economy Minister Naftali Bennett plans to replace the Office of the Chief Scientist in his ministry with an independent, national authority for research and development and innovation, TheMarker has learned.
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The new agency would have the power to make investments, to allocate grants to businesses, to raise capital in Israel and abroad and to establish technology investment funds, according to sources who spoke on condition of anonymity. It would also be able to issue loans and guarantees to facilitate local investment. The aim, say the sources, is to create an agency that has a relatively high degree of administrative flexibility and would not have to seek additional changes to the law in order to initiate new programs.
Bennett is expected to present the cabinet with the necessary legislative changes needed for the shift within two weeks. The amendments will be submitted as part of the Economic Arrangements Bill, supplementary legislation to the state budget.
In a response, the Economy Ministry confirmed that it was working on the issue but added that “No decisions have yet been made and in any event no independent statutory authority for the Chief Scientist would be established.”
The OCS, a unit of the Economy Ministry whose origins date back to the 1960s, is widely considered inadequate and insufficiently flexible to meet the needs of Israel’s rapidly changing high-tech sector. It is believed that the OCS’s 1.2 billion shekel ($348 million) annual budget would be redirected to the new agency.
Israel lags behind other developed states in aiding the country’s high-tech sector, according to the Samuel Neaman Institute for National Policy Research. Only 10% of R&D investment comes from the government in Israel, compared to around 40% in France and 30% in the United States.
The envisioned new agency would have the authority to independently raise capital and to issue bonds. It would also be authorized to set up corporations and to acquire an interest in existing ones, all with the aim of creating a closer partnership between the public and private sectors.
The OCS’s existing investment program would be turned into a fund that would generate an actual return, which is now not an element of its R&D aid program. At present, the agency’s purpose is to address market failures and to help high-risk entrepreneurs to raise initial capital.
The reorganization would also reallocate cabinet responsibilities for the high-tech sector. The economy and finance ministers will be responsible for carrying out the law, but the chairman of the new authority is to be appointed by the economy minster alone. The chairman will be the official adviser to the cabinet on issues of research and development, innovation and technology.