Get Support and Enter the International Market. How Does the Russian-Israeli Research and Development Support Program Works?
On July 15, 2020, the Ninth selection of projects for participation in the Russian-Israeli R&D support program in nanotechnology and high-tech sectors was launched. Based on the results, the grant of the RUSNANO’s Fund for Infrastructure and Educational Programs will be awarded to the projects selected. Inc. has figured out how this program works and what the applicants need to succeed.
Israel has a great experience as a joint research and development partner in creating a favorable climate for the development of innovative startups.
The program started with the signing of an agreement on cooperation in research and development by the governments of Russia and Israel in 2010. On the Russian side, the agreement was implemented by the RUSNANO state corporation, and on the Israeli side—by the office of the Chief Scientist at the Ministry of Economy of Israel. Subsequently, during the reorganization, RUSNANO was divided into JSC RUSNANO and the Fund for Infrastructure and Educational Programs (FIEP), which has taken over the implementation of the Russian-Israeli program. In 2016, changes also took place for the Israeli partner: the Innovation Agency of the State of Israel was created based on the Chief Scientist Office.
Israel has a great experience as a joint research and development partner in creating a favorable climate for the development of innovative startups. “Israel is called the ‘startup nation’ for a reason. It is an advanced R&D country, and consequently, Israeli partners are able to bring to the projects the developments in bringing the product to a state in which it is of interest to the end consumer. A very successful production duo is emerging, where the Russian partner provides a highly professional technological expertise, its competitive production capabilities, and the Israeli participant uses its customer acquisition experience, meeting their needs taking into account market trends, good knowledge of regulatory systems in the largest sectors of the global market,” says Alexey Kachay, FIEP Deputy Director General.
Also, the search for partners and interaction with them is simplified by the strong ties between Russia and Israel. “Up to 80% of our partners in Israel speak Russian and have obtained education or experience in the Soviet Union or Russia,” says Kachay.
A joint application for the project shall be submitted by Russian and Israeli participants to participate in the selection process.
The support for the project selected is represented by awarding to the Russian participant the grant that usually represents 30-40% of the budget of the Russian part of the project and in any case, may exceed 50%. The applicant provides the rest of the budget either independently from its own funds or through the third-party fundraising. The grant is gratuitous—the allocated funds may only be returned in case of misuse thereof. The Innovation Agency of the State of Israel provides similar support to the applicant’s Israeli partner.
A joint application for the project shall be submitted by Russian and Israeli participants to participate in the selection process. Alongside the application submission, the participants will also settle issues related to the development of cooperation during the project and the subsequent stage of commercialization, ownership of intellectual property created during the project, and financial and other issues for the project launch.
It should be noted that the program is designed for joint R&D and construction works. The partner applicants, where one party is engaged in the product creation and the other—only in commercialization thereof, will not be selected. If the Russian applicant does not have a partner in Israel yet, the FIEP and the Innovation Agency are ready to help in its search. Israeli participants can get the same support to find a partner in Russia.
“We do everything possible to help find suitable partners. We use the help of our program partners (FIEP), as well as Israeli representatives in the destination countries, such as Yakir Davidson (Head of the Trade and Economic Mission of the Israeli Embassy in Russia. — Inc. remark). We also recommend the startups to turn to potential partners on their own,” the representative of the Innovation Agency said.
According to him, Israeli companies are interested in the program. The more participants succeed and show the end result, the higher the value of participating therein will be. In any case, the agency sees great potential in cooperation between the two countries—Russia and Israel.
Meanwhile, there are cases where the program was initiated by the Israeli party. “Before the start of the grant, we had communicated with AquaMaof for more than two years, showed them our developments, discussed the prospective interest of the aquaculture market in our products, planned joint work on their experimental base taking into account their leading positions and experience in the aquaculture industrialization market. A month before the end of the selection, our Israeli partner said: 'Do you know about such a program? Let’s participate!' The decision was made instantly in a telephone conversation, and for two weeks we have been preparing the materials for submission in a round-the-clock mode,” says Olga Afanasyeva, Executive Director of Protein KormBioTech Issledovaniya. Her company together with its Israeli partner was selected, received the grant, and is now close to the launch of its product.
The opportunities the project participants get:
- grant support
- creating a high-tech product
- international cooperation
- bringing the product to the international market
- project development prospects in the innovation sector
- strengthening the project team
- followed by technology or product scaling.
It should be noted that during the project evaluation, the experts give their recommendations, after which the applicants have the opportunity to finalize the application.
In total, eight selections took place during the program, where more than 70 applications were considered. The first two selections of projects from Russia were carried out by the RUSNANO state corporation, and the FIEP was involved in the implementation and funding of the projects. During the selection process, each application undergoes scientific and technological expertise both with the FIEP and the Innovation Agency. For these purposes, the FIEP engages third-party industry experts with extensive experience in this field.
Experts assess the application on the following parameters: scientific validity and technical feasibility; innovativeness, the availability of the final product, prospects for commercialization thereof; cost reasonableness, the availability of the necessary infrastructure and, in general, the ability to do the job stated, as well as the involvement of both partners.
“Our task is not only to select the best project but also to help selected projects to become the ‘best version of themselves’, to take them to the next level. Of course, one of the important tasks of the program is to develop joint cooperation and prepare projects for commercial implementation. But the task of increasing the country’s research and engineering potential is equally important. Maybe our specialists will fail to bring the matter to commercial success now, but they will be able to apply the experience in new projects,” explains Kachay.
“The requirements for materials are above average. It is also necessary that a plan for joint research work is available. Fortunately, we had plans for such works, but our plans is one thing, and formalizing these data for research and development and to schedule all the works—is another,” Afanasyeva commented on the application preparation process.
It should be noted that during the project evaluation, the experts give their recommendations, whereafter the applicants have the opportunity to finalize the application. In addition, during the examination, a kind of «second chance” is given, where the additional materials are requested from the partner applicants. After a thorough analysis of the application by the Russian and Israeli parties, a final decision is taken. The application gains support under the so-called “two-key” principle, i.e., only if approved by both the FIEP and the Israel Innovation Agency.
Russian-Israeli Program in Figures
- 70 applications have been reviewed for the duration of the program
- 5 years the expected commercialization of the technology
- 9 projects have been selected and supported
- 3–4 months to make a decision on the project (taking finalization into account)
The Key to Success
In total, nine projects have been selected over the years. Two of them have already been implemented, one is nearing completion, and the other six are in different implementation stages.
Preference is given to projects that promote the development of new productions and tools. Another factor that increases the chances of success is the availability of a clear commercialization program in both global and local markets. The most common mistake is that the application is not filled out in sufficient detail, which is why experts are unable to give a comprehensive assessment of the project.
In total, nine projects have been selected over the years. Two of them have already been implemented, one is nearing completion, and the other six are in different implementation stages. The first project from the completed ones is the device for crushing stones in the body (litotriptor) created by the Tomsk Advanced Powder Technologies and the Israeli Lithotech Medical. After the completion of the project, the device successfully went through the Russian and European certification, and its sales and deliveries to medical facilities were started. The second is the piezosensor developed by Moscow NIIGrafit from Moscow and Israeli I. A. Research. The piezosensor acts as a hydrophone, a vibration sensor, and an acoustic vibrations component. At the moment, all research and development on the project have been completed, and the team is working to expand the piezosensor application range.
The project of Protom from the Moscow-based Protvino science city and the Israeli P-Cure is also nearing its completion. The partners have developed the proton therapeutic complex that would make proton therapy more accessible in the treatment of cancer. Proton therapy allows the tumor to be destroyed by a radiation particles beam with minimal impact on the surrounding vital organs.
The proton unit consists of two parts. Protom was responsible for the proton accelerator, and P-Cure—for the medical and hardware part, which shows the location of the tumor in real time. Now the unit, created by the partners, is FDA-certified. It differs from its counterparts in fundamentally smaller sizes and weights, more affordable price, reduced operating costs, high accuracy of treatment, and mobility.
According to Mikhail Marash, founder and CEO of P-Cure, he has extensive experience applying for various support programs, since it is a common practice in Israel. The advantage of their application was the established partnership with the Protom team. Together, they considered various options for participating in startup support programs and decided that the Russian-Israeli program would be the best option for them. Among its strengths, Marash noted the openness to dialogue and minimum bureaucracy.
Olga Afanasyeva, Executive Director of Protein KormBioTech Issledovaniya, agrees with him. Her company is working with Israel’s AquaMaof to develop astaxanthin, the natural antioxidant being one of the most expensive ingredients in aquaculture feed.
The interaction with the Israeli partner allowed Protein KormBioTech Issledovaniya to enter the international market and start preparations for production in Russia. Currently, the partners have completed the development of the unit technology for production, and experimental batches are being tested in Israel.
“This program is the best we know in Russia. For us, and most likely for many other areas, the interaction with the Israeli partner is the Elon Musk’s ‘trampoline’ to enter international markets,” Afanasyeva believes. “In any case, after the demonstration of the feed reports of Maof Hanegev Ltd (a subsidiary research division of AquaMaof, with which we conduct R&D), the top three world aquaculture feed companies began negotiations with us; in parallel with this, Russian manufacturers started to treat our developments seriously.”
From the very beginning, the Russian-Israeli program set quite high standards for the quality of application, so not everyone copes with them from the first time. Even with this outcome, having received the assessment of highly qualified experts involved in the analysis of applications, participants have the opportunity to improve the level of development of the project and come with it again in the following years.
In 2020, the selection of applications will last until November 25. Priority is given to the technological areas on which the FIEP focuses, namely quality of life, new materials and coatings, energy efficiency, nanoelectronics, optoelectronics, photonics, neurotechnology, and artificial intelligence.
Ultimately, for startups, participation in the Russian-Israeli program of the RUSNANO’s Fund for Infrastructure and Educational Programs and the State of Israel Innovation Agency offers several opportunities at once. Firstly, it provides cooperation with a foreign partner and joint structuring of a project. Secondly, it provides invaluable experience in planning and systematizing work for a long period. Thirdly, it is the possibility of entering the international markets with a product. Fourthly, the grant funds themselves will help to significantly promote R&Ds. All this brings practical benefits for participants at any stage of the project.
The Russian-Israeli program is implemented as part of the Agreement on Cooperation in Industrial R&D concluded between the Government of the Russian Federation and the Government of the State of Israel. The support is provided for projects for industrial R&D in the nanotechnology and related high-tech sectors in order to develop new industries, mechanisms, and tools. The expected period of the technology commercialization is approximately 3—5 years. The project should have significant volumes of potential markets in the Russian Federation, Israel, and on a global scale. The Fund provides funding as grants in an amount not exceeding 50% of the budget of the Russian part of the project.
As part of the program, the Fund supported projects in medicine and biotechnology, power engineering, and microelectronics. Earlier, NIIgrafit received a competitive grant for research and development of hybrid composite piezoelectric sensors. The projects for the creation of a compact automated proton therapy complex for the treatment of oncological diseases by PROTOM and for the development of the least invasive equipment for the treatment of urolithiasis and cholelithiasis by the Advanced Powder Technologies were supported.