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The Israeli Cleantech

ByIsrael Drori, Shmuel Ellis, Mali Nevo

Faculty of management Tel Aviv University

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.

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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

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11 . .Overall growthOverall growth

4

5

Cleantech companies in Israel by year of establishment

6

Cleantech companies in Israel by year of establishment

2 Sub-sectors within the cleantech 2 Sub-sectors within the cleantech industry industry

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Sub-sectors within the cleantech industry

cleantech companies in Israel by sub-sector

energy36%

water technology

25%

agriculture technology

19%

enviornment11%

materials9%

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cleantech companies in Israel by sub-sector and year of establishment (1990-2008)

0

5

10

15

20

25

30

35

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

nu

mb

er

of

ne

w c

om

pa

nie

s

energy agriculture tecnology enviornment

materials water technology

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33 . .Evolutionary Stages Evolutionary Stages of Israeli of Israeli cleantech companiescleantech companies

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Evolutionary stages

Seed stage

Research and Development (R&D) stage

Initial Revenue stage

Revenue Growth

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Cleantech companies in Israel by stage of development

Seed21%

R & D31%

Initial Revenue38%

Revenue Growth

10%

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Cleantech companies in Israel by sub-sector and development stage

0

10

20

30

40

50

60

agriculturetecnology

energy enviornment materials watertechnology

nu

. of

co

mp

an

ies

Seed R & D Initial Revenue Revenue Growth

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4. Company size 4. Company size

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Average number of employees per company

4.1 9.729.3

196.9

0

50

100

150

200

250

Seed R & D Initial Revenue RevenueGrowth

av

. n

um

be

r o

f e

mp

loy

es

s

Company size

15

number of employess by cleantech sub-sector

materials6%

enviornment8%

agriculture tecnology

17%

energy28% water

technology41%

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5. Ownership, Capital raised and 5. Ownership, Capital raised and Annual revenuesAnnual revenues

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18

Average capital raised by cleantech companies by sub-sector (in millions of US$), 2007-2008

Average revenue in 2008 of cleantech companies by sub-sector (in millions of US $)

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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

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Genealogyenealogy

1. Genealogy is a record of descent or linage of a group enealogy is a record of descent or linage of a group from its ancestors to the recent generation.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).

Example of Genealogy, ITC sector (enealogy, ITC sector ( RAD- Founded: 1981)

The Israeli Cleantech sampleThe Israeli Cleantech sample121 companies from 419 28.87%

174 entrepreneurs from 721 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

Environment

Agriculture

Materials

Water

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Origins of founders

Hi tech

Academy

Biotech

Cleantech

Energy Industry

IDF

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Origins of founders

EnergyWater

Agriculture

Environment

Materials

Hi tech

Academy

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SectorSectorpercentagepercentageEntrepreneursEntrepreneurs

Hi tech27.01%47Academy26.44%46Biotech6.90%12Energy Industry6.32%11IDF5.17%9Cleantech4.60%8Agriculture2.87%5Israeli defense industries2.87%5Vanture Capital2.87%5Engineering2.30%4Banking1.72%3Medical devices1.72%3

SectorSectorpercentagepercentageEntrepreneursEntrepreneursCounselling1.15%2Environmental Services industry1.15%2Government1.15%2Investment1.15%2Architecture & Planning industry0.57%1Food industry0.57%1Law0.57%1Low tech0.57%1media0.57%1Municipal0.57%1Outsourcing industry0.57%1Shipping0.57%1sum100%174