High-tech Sector Concerned by Gov’t Plans to Scale-down R&D Office

Office of the Chief Scientist would be halved in size, with new panel introduced to oversee funds, investments to industry.

Ofer Vaknin

Officials in Israel’s high-tech sector are concerned over planned changes to the status of the Office of the Chief Scientist, the division of the Economy Ministry that is responsible for implementing the government’s research and development policy.

Of the office’s current 32 employees, only 15 will remain, with the rest appointed to other positions at the Economy Ministry. The plan that’s taking shape calls for a new entity to be set up that will report to the ministry and the Office of the Chief Scientist, which will remain responsible for planning and policy development.

The new agency will implement policy and have its own board, on which the chief scientist will represent the ministry. The board will also have representation from the economy and finance ministries and representatives of the public, including the high-tech sector. The new agency will also run the chief scientist’s financial assistance program.

The Economy Ministry said the plan was developed based on know-how within the ministry, as well as a comprehensive study by an international consulting firm that specializes in high-tech. “What’s behind the change is the desire to use tools that are currently not available to the chief scientist,” one government source said yesterday, noting that if the new agency board approves the plan, it could include a fund that would in turn put money into investment funds. “It could also make joint investments with the private sector, guarantee loans to high-tech companies and invest in equities, if the council approves.”

The director general of the Manufacturers’ Association, Amir Hayek, cautioned on Monday that a mistake in restructuring the department could have critical consequences.

Some of the concerns in the high-tech sector seem to be because the government is not informing the industry about the changes and has not consulted with it in making the decision. Industry and government sources have said that the first briefing on the plan is scheduled for this week, but the plan is already on the cabinet agenda this month and is expected to be included in the next Economic Arrangements Bill, which supplements the state budget legislation.

Industry representatives are asking that the plan be considered separately from the Economic Arrangements Bill, and only after thorough public discussion. Staff members at the Office of the Chief Scientist are also organizing their own lobbying efforts with Knesset members, in a bid to head off the changes until they are thoroughly considered.

The financial details of the new plan have engendered concern in high-tech. “If the chief scientist issues bonds, it will begin to act out of profit motives,since it will need to repay the money – and that’s not its purpose,” one high-tech executive said. “It will distort decisions regarding where its support for industry goes and the risks it takes. It is not meant to compete with investment funds or other investors in the private sector.”

The Economy Ministry denied that the plan would inject a profit motive into the Office of the Chief Scientist and said the issuance of bonds are not relevant to the restructuring plan.