Impact of Government Organizational Reform to Scientific Research Legal System and Response Thereto (2) – For Example, The Finnish Innovation Fund (“SITRA”)

Impact of Government Organizational Reform to Scientific Research Legal System and Response Thereto (2) – For Example, The Finnish Innovation Fund (“SITRA”)

III. Comparison of Strength and Weakness of Sitra Projects

1. Sitra Venture Capital Investment Model

  In order to comprehend how to boost innovation business development to upgrade innovation ability, we analyze and compare the innovation systems applied in Sweden, France and Finland[1] .  We analyze and compare the characteristics, strength and weakness of innovation promotion models in terms of funding, networking and professional guidance.  Generally, the first difficulty which a start-up needs to deal with when it is founded initially is the funding.  Particularly, a technology company usually requires tremendous funding when it is founded initially.  Some potentially adequate investors, e.g., venture capitals, seldom invest in small-sized start-up (because such overhead as supervision and management fees will account for a high percentage of the investment due to the small total investment amount).  Networking means how a start-up integrates such human resources as the management, investors, technical advisors and IP professionals when it is founded initially.  Control over such human resources is critical to a new company’s survival and growth.  Professional guidance means how professional knowledge and human resource support the start-up’s operation.  In order to make its product required by the market, an enterprise usually needs to integrate special professional knowledge.  Notwithstanding, the professional knowledge and talents which are available from an open market theoretically often cannot be accessed, due to market failure[2].

  Assuming that Sitra’s funding is prioritized as Pre-seed-Initiation stage, Seed-Development stage and Follow-up – Growth stage, under Finland model, at the Pre-seed-Initiation stage, Sitra will provide the fund amounting to EUR20,000 when Tekes will also provide the equivalent fund, provided that the latter purely provides subsidy, while the fund provided by Sitra means a loan to be repaid (without interest) after some time (usually after commercialization), or a loan convertible to shares.  Then, the loan would be replaced by soft or convertible (to shares) investment and the source of funding would turn to be angel investors or local seed capital at the Seed-Development stage.  At this stage, the angel investors, local seed capital and Sitra will act as the source of funding jointly in Finland, while Tekes will not be involved at this stage.  At the Follow-up-Growth stage, like the Sweden model, Sitra will utilize its own investment fund to help mitigate the gap between local small-sized funding and large-sized international venture capital[3].

  How to recruit professional human resources is critical to a start-up’s success.  Many enterprises usually lack sufficient professional human resources or some expertise.  DIILI service network set up by Sitra is able to provide the relevant solutions.  DILLI is a network formed by product managers.  Its members actively participate in starts-up and seek innovation.  They also participate in investment of starts-up independently sometimes.  Therefore, they are different from angel investors, because they devote themselves to the starts-up on a full-time basis[4].  In other words, they manage the starts-up as if the starts-up were their own business.

2. Key to Public Sector’s Success in Boosting Development of Innovation Activity Business

  In terms of professional guidance, voluntary guidance means the direct supply of such professional resources as financing, human resource and technology to starts-up, while involuntary guidance means the supply of strategic planning in lieu of direct assistance to help the enterprises make routine decisions[5]. The fractured and incomplete professional service attendant market generates low marginal effect.  Therefore, it is impossible for the traditional consultation service to mitigate such gap and the investment at the pre-seed initiation stage will be excessive because of the acquisition of the professional services.  Meanwhile, professional advisors seldom are involved in consultation services at the pre-seed initiation stage of a start-up because of the low potential added value.  Therefore, at such stage, only involuntary professional guidance will be available usually.  Under Sitra model, such role is played by an angel investor.

  Upon analysis and comparison, we propose six suggested policies to boost innovation activities successfully as the reference when observing Sitra operation.  First of all, compared with the French model, Finland Sitra and Sweden model set more specific objectives to meet a start-up’s needs (but there is some defect, e.g., Sitra model lacks voluntary professional guidance).  Second, structural budget is a key to the successful model.  Sitra will receive the funds in the amount of EUR235,000,000 from the Finnish Government, but its operating expenditure is covered by its own operating revenue in whole.  Third, it is necessary to provide working fund in installments and provide fund at the pre-seed-initiation stage.  Under both of Finland model and Sweden model, funds will be provided at the pre-seed-initiation stage (Tekes is responsible for providing the fund in Finland).  Fourth, the difficulty in networking must be solved.  In Sitra, the large-sized talent network set up by it will be dedicated to recruiting human resources.  Fifth, the voluntary professional guidance is indispensable at the pre-seed-initiation stage, while the same is unavailable at such stage under Sitra model.  Instead, the Sweden model is held as the optimal one, as it has a dedicated unit responsible for solving the difficulty to seek profit. Sixth, soft loan[6] will be successfully only when the loan cannot be convertible to shares. At the pre-seed initiation stage or seed-development stage, a start-up is usually funded by traditional loan.  Assuming that the start-up is not expected to gain profit, whether the loan may be convertible to shares will also be taken into consideration when the granting of loan is considered (therefore, the fund provider will not be changed to the “capital” provider).  Besides, the government authorities mostly lack the relevant experience or knowledge, or are in no position to negotiate with international large-sized venture capital companies.  For example, under the French model, the government takes advantage of its power to restrict the venture capital investment and thereby renders adverse impact to starts-up which seek venture capital.  Finally, the supply of own fund to meet the enterprises’ needs at seed-development stage and follow-up-growth stage to mitigate the gap with large-sized venture capital[7] is also required by a successful funding model.

IV. Conclusion-Deliberation of Finnish Sitra Experience

  As the leading national industrial innovation ability promoter in Finland, Sitra appears to be very characteristic in its organizational framework or operating mechanism.  We hereby conclude six major characteristics of Sitra and propose the potential orientation toward deliberation of Taiwan’s industrial innovation policies and instruments.

1. Particularity of Organizational Standing

  In consideration of the particularity of Sitra organizational standing, it has two characteristics observable.  First, Sitra is under supervision of the Finnish Parliament directly, not subordinated to the administrative organizational system and, therefore, it possesses such strength as flexibility and compliance with the Parliament’s requirements.  Such organization design which acts independently of the administrative system but still aims to implement policies has been derived in various forms in the world, e.g., the agency model[8] in the United Kingdom, or the independent apparatus in the U.S.A. Nevertheless, to act independently of the administrative system, it has to deal with the deliberation of responsible political principles at first, which arouses the difficulty in taking care of flexibility at the same time.  In Taiwan, the intermediary organizations include independent agencies and administrative corporations, etc., while the former still involves the participation of the supreme administrative head in the right of personnel administration and is subordinated to the ministries/departments of the Executive Yuan and the latter aims to enforce the public missions in the capacity of “public welfare” organization.  Though such design as reporting to the Parliament directly is not against the responsible political principles, how the Parliament owns the authority to supervise is the point (otherwise, theoretically, the administrative authorities are all empowered by the parliament in the country which applies the cabinet system).  Additionally, why some special authorities are chosen to report to the parliament directly while other policy subjects are not is also disputable.  The existence of Sitra also refers to a circumstantial evidence substantiating that Finland includes the innovation policy as one of the important government policies, and also the objective fact that Finland’s innovation ability heads the first in the world.

  Second, Sitra is a self-sufficient independent fund, which aims to promote technical R&D and also seeks profit for itself, irrelevant with selection of adequate investment subjects or areas.  Instead, for this purpose, the various decisions made by it will deal with the utility and mitigate the gap between R&D and market. Such entity is responsible for public welfare or policy projects and also oriented toward gain from investment to feed the same back to the individuals in the organization.  In the administrative system, Sitra is not directed by the administrative system but reports to the Parliament directly.  Sitra aims to upgrade the national R&D innovation ability as its long-term goal mission and utilizes the promotion of innovation business and development of venture capital market.  The mission makes the profit-orientation compatible with the selection of investment subjects, as an enterprise unlikely to gain profit in the future usually is excluded from the national development view.  For example, such industries as green energy, which is not likely to gain profit in a short term, is still worth investing as long as it meets the national development trend and also feasible (in other words, selection of marketable green technology R&D, instead of comparison of the strength and weakness in investment value of green energy and other high-polluted energy).

2. Expressly Distinguished From Missions of Other Ministries/Departments

  For the time being, Sitra primarily invests in starts-up, including indirect investment and direct investment, because it relies on successful new technology R&D which may contribute to production and marketability.  Starts-up have always been one of the best options, as large-sized enterprises are able to do R&D on their own without the outsourcing needs.  Further, from the point of view of an inventor, if the new technology is marketable, it will be more favorable to him if he chooses to start business on his own or make investment in the form of partnership, instead of transfer or license of the ownership to large-sized enterprises (as large-sized enterprises are more capable of negotiation).  However, note that Sitra aims to boost innovation activities and only targets at start-up business development, instead of boosting and promoting the start-up per se.  Under the requirement that Sitra needs to seek profit for itself, only the business with positive development view will be targeted by Sitra.  Further, Sitra will not fund any business other than innovation R&D or some specific industries.  Apparently, Sitra only focuses on the connection between innovation activities and start-up, but does not act as the competent authority in charge of small-sized and medium-sized enterprises.

  Meanwhile, Sitra highlights that it will not fund academic research activities and, therefore, appears to be distinguished from the competent authority in charge of national scientific research.  Though scientific research and technology innovation business, to some extent, are distinguished from each other in quantity instead of quality, abstract and meaningless research is existent but only far away from the commercialization market.  Notwithstanding, a lot of countries tend to distinguish basic scientific research from industrial technology R&D in the administration organization's mission, or it has to be.  In term of the way in which Sitra carries out its mission, such distinguishing ability is proven directly.

3. Well-Founded Technology Foresight-Based Investment Business

  The corporate investments, fund investments and project funding launched by Sitra are all available to the pre-designated subjects only, e.g. ecological sustainable development, energy utilization efficiency, and social structural changes, etc.  Such way to promote policies as defining development area as the first priority and then promoting the investment innovation might have some strength and weakness at the same time.  First of all, the selection of development areas might meet the higher level national development orientation more therefor, free from objective environmental restrictions, e.g. technical level, leading national technology industries and properties of natural resources.  Notwithstanding, an enterprise’s orientation toward innovation R&D might miss the opportunity for other development because of the pre-defined framework.  Therefore, such way to promote policies as defining development areas or subjects as the first priority will be inevitably based on well-founded technology foresight-based projects[9], in order to take various subjective and objective conditions into consideration and to forecast the technology development orientation and impact to be faced by the home country’s national and social economies.  That is, said strength and weakness will be taken into consideration beforehand for foresight, while following R&D funding will be launched into the technology areas pre-designated after thorough analysis.

4. Self-Interested Investment with the Same High Efficiency as General Enterprises

  Sitra aims to gain profit generally, and its individual investment model, e.g., DIILI, also permits marketing managers to involve business operation.  The profit-sharing model enables Sitra to seek the same high efficiency as the general enterprises when purusing its innovation activity development.  The investment launched by Sitra highlights that it is not “funding” (which Tekes is responsible for in Finland) or the investment not requiring return.  Therefore, it has the system design to acquire corporate shares.  Sitra participates in a start-up by offering its advanced technology, just like a general market investor who will choose the potential investment subject that might benefit him most upon his personal professional evaluation.  After all, the ultimate profit will be retained by Sitra (or said DIILI manger, subject to the investment model).  Certainly, whether the industry which requires permanent support may benefit under such model still remains questionable.  However, except otherwise provided in laws expressly, said special organization standing might be a factor critical to Sitra profit-seeking model.  That is, Sitra is not subordinated to the administrative system but is under supervision of the parliament independently, and how its staff deal with the conflict of interest issues in the capacity other than the public sector’s/private sector’s staff is also one of the key factors to success of the system.

5. Investment Model to Deal With Policy Instruments of Other Authorities/Agencies

  Sitra decides to fund a start-up depending on whether it may gain profit as one of its priorities.  As aforesaid, we may preliminarily recognize that the same should be consistent with funding to starts-up logically and no “government failure” issue is involved.  For example, the funding at the pre-seed-initiation stage needs to tie in with Tekes’ R&D “funding” (and LIKSA service stated herein) and, therefore, may adjust the profit-seeking orientation, thereby causing deviation in promotion of policies.  The dispute over fairness of repeated subsidy/funding and rationality of resource allocation under the circumstance must be controlled by a separate evaluation management mechanism inevitably.

6. Affiliation with Enhancement of Regional Innovation Activities

  Regional policies cannot be separable from innovation policies, especially in a country where human resources and natural resources are not plentiful or even.  Therefore, balancing regional development policies and also integrating uneven resource distribution at the same time is indispensable to upgrading of the entire national social economic benefits. The Finnish experience indicated that innovation activities  ought to play an important role in the regional development, and in order to integrate enterprises, the parties primarily engaged in innovation activities, with the R&D ability of regional academic research institutions to upgrade the R&D ability effectively, the relevant national policies must be defined for adequately arranging and launching necessary resources.  Sitra's approaches to invest in starts-up, release shares after specific period, integrate the regional resources, upgrade the national innovation ability and boost the regional development might serve to be the reference for universities’ centers of innovative incubator or Taiwan’s local academic and scientific sectors[10] to improve their approaches.

  For the time being, the organization engaged in venture capital investment in the form of fund in Taiwan like Sitra of Finland is National Development Fund, Executive Yuan.  However, in terms of organizational framework, Sitra is under supervision of the Parliament directly, while National Development Fund is subordinated to the administrative system of Taiwan.  Though Sitra and National Development Fund are both engaged in venture capital investments primarily, Sitra carries out its missions for the purpose of “promoting innovative activities”, while the National Development Fund is committed to achieve such diversified goals as “promoting economic changes and national development[11]” and is required to be adapted to various ministries’/departments’ policies.  Despite the difference in the administrative systems of Taiwan and Finland, Sitra system is not necessarily applicable to Taiwan.  Notwithstanding, Sitra’s experience in promotion and thought about the system might provide a different direction for Taiwan to think when it is conceiving the means and instruments for industrial innovation promotion policies in the future.

[1] Bart Clarysse & Johan Bruneel, Nurturing and Growing Innovation Start-Ups: The Role of Policy As Integrator, R&D MANAGEMENT, 37(2), 139, 144-146 (2007). Clarysse & Bruneel analysis and comparison refers to Sweden Chalmers Innovation model, French Anvar/Banque de Developpement des PMEs model and Finland Sitra PreSeed Service model.

[2] id. at 141-143.

[3] id. at 141.

[4] id. at 145-146.

[5] id. at 143.

[6] The loan to be repaid is not a concern.  For example, the competent authority in Sweden only expects to recover one-fourths of the loan.

[7] Clarysse & Bruneel, super note 26, at 147-148.

[8] 彭錦鵬,〈英國政署之組織設計與運作成效〉,《歐美研究》,第30卷第3期,頁89-141。

[9] Technology foresight must work with the innovation policy road mapping (IPRM) interactively, and consolidate the forecast and evaluation of technology policy development routes.  One study case about IPRM of the environmental sustainable development in the telecommunication industry in Finland, the IPRM may enhance the foresighted system and indicates the potential factors resulting in systematic failure.  Please see Toni Ahlqvist, Ville Valovirta & Torsti Loikkanen, Innovation policy road mapping as a systemic instrument for forward-looking policy design, Science and Public Policy 39, 178-190 (2012).

[10] 參見李昂杰,〈規範新訊:學界科專辦法及其法制配套之解析〉,《科技法律透析》,第23卷第8期,頁33(2011)。

※Impact of Government Organizational Reform to Scientific Research Legal System and Response Thereto (2) – For Example, The Finnish Innovation Fund (“SITRA”),STLI, https://stli.iii.org.tw/en/article-detail.aspx?no=55&tp=2&i=168&d=6981 (Date:2024/07/20)
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Impact of Government Organizational Reform to Research Legal System and Response Thereto (2) – Observation of the Swiss Research Innovation System

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The enterprises may propose their innovative ideas freely, and the CTI will decide whether the funds should be granted after assessing whether the ideas are innovative and potentially marketable[5].   CTI’s funding is conditioned on the industrial and academic cooperation. Therefore, the enterprises must work with at least one research institution (including a university, university of science and technology, or ETH) in the R&D. Considering that small-sized and medium-sized enterprises usually do not own enough working funds, technology and human resources to commercialize creative ideas, the CTI R&D Project is intended to resolve the problem about insufficient R&D energy and funds of small- and medium-sized enterprises by delivering the research institutions’ plentiful research energy and granting the private enterprises which work with research institutions (including university, university of science and technology, or ETH) the fund. 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Given this, the CTI is not only an entity dedicated to funding but also plays an intermediary role in the industrial and academic sectors. Enterprises may submit proposals before finding any academic research institution partner. Upon preliminary examination of the proposals, the CTI will introduce competent academic research institutions to work with the enterprises in R&D, subject to the enterprises' R&D needs. After the cooperative partner is confirmed, CTI will grant the fund amounting to no more than CHF3,500,000 per application[8], provided that the funding shall be no more than 50% of the R&D project expenditure.   The CTI R&D Project not only boosts innovation but also raises private enterprises’ willingness to participate in the academic and industrial cooperation, thereby narrowing the gap between the supply & demand of innovation R&D in the industrial and academic sectors. Notably, the Project has achieved remarkable effect in driving private enterprises’ investment in technology R&D. According to statistical data, in 2011, the CTI solicited additional investment of CHF1.3 from a private enterprise by investing each CHF1[9]. This is also one of the important reasons why the Swiss innovation system always acts vigorously. Table 1  2005-2011 Passing rate of application for R&D funding Year 2011 2010 2009 2008 2007 2006 2005 Quantity of applications 590 780 637 444 493 407 522 Quantity of funded applications 293 343 319 250 277 227 251 Pass rate 56% 44% 50% 56% 56% 56% 48% Data source: Prepared by the Study (2)Guiding high-tech start-up   Switzerland has learnt that high-tech start-ups are critical to the creation of high-quality employment and boosting of economic growth, and start-ups were able to commercialize the R&D results. Therefore, as of 2001, Switzerland successively launched the CTI Entrepreneurship and CTI Startup to promote entrepreneurship and cultivate high-tech start-ups. 1.CTI Entrepreneurship   The CTI Entrepreneurship was primarily implemented by the Venture Lab founded by CTI investment. The Venture Lab launched a series of entrepreneurship promotion and training courses, covering day workshops, five-day entrepreneurship intensive courses, and entrepreneurship courses available in universities. Each training course was reviewed by experts, and the experts would provide positive advice to attendants about innovative ideas and business models. Data source: Venture Lab Site Fig. 3  Venture Lab Startup Program 2.CTI Startup   The CTI is dedicated to driving the economy by virtue of innovation as its priority mission. 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The scope of examination included the technology, market, feasibility and management team’s competence. After that, at the stage of professional guidance, each team would be assigned a professional “entrepreneurship mentor”, who would help the team develop further and optimize the enterprise’s strategy, flow and business model in the process of business start, and provide guidance and advice on the concrete business issues encountered by the start-up. The stage of professional guidance was intended to guide start-ups to acquire the CTI Startup Label, as the CTI Startup Label was granted subject to very strict examination procedure. For example, in 2012, the CTI Startup project accepted 78 applications for entrepreneurship guidance, but finally the CTI Startup Label was granted to 27 applications only[12]. Since 1996, a total of 296 start-ups have acquired the CTI Startup Label, and more than 86% thereof are still operating now[13]. 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(3)Facilitating transfer of knowledge and technology between the academic sector and industrial sector   KTT Support (Knowledge & Technology Transfer (KTT Support) is identified as another policy instrument dedicated to boosting innovation by the CTI. It is intended to facilitate the exchange of knowledge and technology between academic research institutions and private enterprises, in order to transfer and expand the innovation energy.   As of 2013, the CTI has launched a brand new KTT Support project targeting at small-sized and medium-sized enterprises. The new KTT Support project consisted of three factors, including National Thematic Networks (NTNs), Innovation Mentors, and Physical and web-based platforms. Upon the CTI’s strict evaluation and consideration, a total of 8 cooperative innovation subjects were identified in 2012, namely, carbon fiber composite materials, design idea innovation, surface innovation, food study, Swiss biotechnology, wood innovation, photonics and logistics network, etc.[15] One NTN would be established per subject. The CTI would fund these NTNs to support the establishment of liaison channels and cooperative relations between academic research institutions and industries and provide small- and medium-sized enterprises in Switzerland with more rapid and easy channel to access technologies to promote the exchange of knowledge and technology between both parties. Innovation Mentors were professionals retained by the CTI, primarily responsible for evaluating the small-sized and medium-sized enterprises’ need and chance for innovation R&D and helping the enterprises solicit competent academic research partners to engage in the transfer of technology. The third factor of KTT Support, Physical and web-based platforms, is intended to help academic research institutions and private enterprises establish physical liaison channels through organization of activities and installation of network communication platforms, to enable the information about knowledge and technology transfer to be more transparent and communicable widely.   In conclusion, the CTI has been dedicated to enhancing the link between scientific research and the industries and urging the industrial sector to involve and boost the R&D projects with market potential. The CTI’s business lines are all equipped with corresponding policy instruments to achieve the industrial-academic cooperation target and mitigate the gap between the industry and academic sectors in the innovation chain. The various CTI policy instruments may be applied in the following manner as identified in the following figure. Data source: CTI Annual Report 2011 Fig. 5  Application of CTI Policy Instrument to Innovation Chain III. Swiss Technology R&D Budget Management and Allocation   The Swiss Federal Government has invested considerable expenditures in technology R&D. According to statistic data provided by Swiss Federal Statistical Office (FSO) and OECD, the Swiss research expenditures accounted for 2.37% of the Federal Government’s total expenditures, following the U.S.A. and South Korea (see Fig. 6). Meanwhile, the research expenditures of the Swiss Government grew from CHF2.777 billion in 2000 to CHF4.639 billion in 2010, an average yearly growth rate of 5.9% (see Fig. 7). It is clear that Switzerland highly values its technology R&D. Data source: FSO and OECD Fig. 6 Percentage of Research Expenditures in Various Country Governments’ Total Expenditures (2008) Data source: FSO and OECD Fig. 7  Swiss Government Research Expenditures 2000-2010 1.Management of Swiss Technology R&D Budget   Swiss research expenditures are primarily allocated to the education, R&D and innovation areas, and play an important role in the Swiss innovation system. Therefore, a large part of the Swiss research expenditures are allocated to institutions of higher education, including ETH, universities, and UASs. The Swiss research expenditures are utilized by three hierarchies[16] (see Fig. 8): Government R&D funding agencies: The Swiss research budget is primarily executed by three agencies, including SERI, Federal Department of Economic Affairs, Education and Research, and Swiss Agency for Development and Cooperation (SDC). Intermediary R&D funding agencies: Including SNSC and CTI. Funding of R&D performing institutions: Including private enterprises, institutions of higher education and private non-profit-making business, et al.   Therefore, the Swiss Government research expenditures may be utilized by the Federal Government directly, or assigned to intermediary agencies, which will allocate the same to the R&D performing institutions. SERI will allocate the research expenditures to institutions of higher education and also hand a lot of the expenditures over to SNSF for consolidated funding to the basic science of R&D. Data source: FSO Fig. 8  Swiss Research Fund Utilization Mechanism ~to be continued~ [1] ORGANIZATION FOR ECONNOMIC CO-OPERATION AND DEVELOPMENT [OECD], OECD Reviews of Innovation Policy: Switzerland 27 (2006). [2] As of January 1, 2013, the Federal Ministry of Economic Affairs was reorganized, and renamed into Federal Department of Economic Affairs, Education and Research (EAER). [3] The Commission for Technology and Innovation CTI, THE COMMISSION FOR TECHOLOGY AND INNOVATION CTI, http://www.kti.admin.ch/org/00079/index.html?lang=en (last visited Jun. 3, 2013). [4] Id. [5] CTI INVEST, Swiss Venture Guide 2012 (2012), at 44, http://www.cti-invest.ch/getattachment/7f901c03-0fe6-43b5-be47-6d05b6b84133/Full-Version.aspx (last visited Jun. 4, 2013). [6] CTI, CTI Activity Report 2012 14 (2013), available at http://www.kti.admin.ch/dokumentation/00077/index.html?lang=en&download=NHzLpZeg7t,lnp6I0NTU042l2Z6ln1ad1IZn4Z2qZpnO2Yuq2Z6gpJCDen16fmym162epYbg2c_JjKbNoKSn6A-- (last visited Jun. 3, 2013). [7] CTI Voucher, THE COMMISSION FOR TECHOLOGY AND INNOVATION CTI, http://www.kti.admin.ch/projektfoerderung/00025/00135/index.html?lang=en (last visited Jun. 3, 2013). [8] Id. [9] CTI, CTI Activity Report 2011 20 (2012), available at http://www.kti.admin.ch/dokumentation/00077/index.html?lang=en&download=NHzLpZeg7t,lnp6I0NTU042l2Z6ln1ad1IZn4Z2qZpnO2Yuq2Z6gpJCDeYR,gWym162epYbg2c_JjKbNoKSn6A--(last visited Jun. 3, 2013). [10] CTI Start-up Brings Science to Market, THE COMMISSION FOR TECHOLOGY AND INNOVATION CTI, http://www.ctistartup.ch/en/about/cti-start-/cti-start-up/ (last visited Jun. 5, 2013). [11] Id. [12] Supra note 8, at 45. [13] Id. [14] CTI Invest, http://www.cti-invest.ch/About/CTI-Invest.aspx (last visited Jun. 5, 2013). [15] KTT Support, CTI, http://www.kti.admin.ch/netzwerke/index.html?lang=en (last visited Jun.5, 2013). [16] Swiss Federal Statistics Office (SFO), Public Funding of Research in Switzerland 2000–2010 (2012), available at http://www.bfs.admin.ch/bfs/portal/en/index/themen/04/22/publ.Document.163273.pdf (last visited Jun. 20, 2013).

Introduction to Taiwan’s Guidelines for Implementing Decentralized Elements in Medicinal Product Clinical Trials

Introduction to Taiwan’s Guidelines for Implementing Decentralized Elements in Medicinal Product Clinical Trials 2023/12/15 The development of digital tools such as the internet, apps, and wearable devices have meant major breakthroughs for clinical trials. These advances have the potential to reduce the frequency of trial subject visits, accelerate research timelines, and lower the costs of drug development. The COVID-19 pandemic has further accelerated the use of digital tools, prompting many countries to adopt decentralized measures that enable trial subjects to participate in clinical trials regardless of their physical location. In step with the transition into the post-pandemic era, the Taiwan Food and Drug Administration (TFDA) issued the Guidelines for Implementing Decentralized Elements in Medicinal Product Clinical Trials in June, 2023[1]. The Guidelines are intended to cover a wide array of decentralized measures; they aim to increase trial subjects’ willingness to participate in trials, reduce the need for in-person visits to clinical trial sites, enhance real-time data acquisition during trials, and enable clinic sponsors and contract research organizations to process data remotely. I. Key Points of Taiwan’s Guidelines for Implementing Decentralized Elements in Medicinal Product Clinical Trials The Guidelines cover primarily the following matters: General considerations for implementing decentralized measures; trial subject recruitment and electronic informed consent; delivery and provision of investigational medicinal products; remote monitoring of trial subject safety; trial subject reporting of adverse events; remote data monitoring; and information systems and electronic data collection/processing/storage. 1. General Considerations for Implementing Decentralized Measures (1) During clinical trial execution, a reduction in trial subject in-person visits may present challenges to medical observation. It is recommended that home visits for any given trial subject be conducted by the principal investigator, sub-investigator, or a single, consistent delegated study nurse. (2) Sponsors must carefully evaluate all of the trial design’s decentralization measures to ensure data integrity. (3) Sponsors must conduct risk assessments for each individual trial, and must confirm the rationality of choosing decentralized measures. These decentralized measures must also be incorporated into the protocol. (4) When electronically collecting data, sponsors must ensure information system reliability and data security. Artificial intelligence may be considered for use in decentralized clinical trials; sponsors must carefully evaluate such systems, especially when they touch on determinations for critical data or strategies. (5) As the design of decentralized clinical trials is to ensure equal access to healthcare services, it must provide patients with a variety of ways to participate in clinical trials. (6) When implementing any decentralized measures, it is essential to ensure that the principal investigator and sponsor adhere to the Regulations for Good Clinical Practice and bear their respective responsibilities for the trial. (7) The use of decentralized measures must be stated in the regulatory application, and the Checklist of Decentralized Elements in Medicinal Product Clinical Trials must be included in the submission. 2. Subject Recruitment and Electronic Informed Consent (1) Trial subject recruitment through social media or established databases may only be implemented after the Institutional Review Board reviews and approves of the recruitment methods and content. (2) Must comply with the Principles for Recruiting Clinical Trial Subjects in medicinal product trials, the Personal Data Protection Act, and other regulations. (3) Regarding clinical trial subject informed consent done through digital software or devices, if it complies with Article 4, Paragraph 2 of the Electronic Signatures Act, that is, if the content can be displayed in its entirety and continues to be accessible for subsequent reference, then so long as the trial subject agrees to do so, the signature may be done via a tablet or other electronic device. The storage of signed electronic Informed Consent Forms (eICF) must align with the aforementioned Principles and meet the competent authority’s access requirements. 3. Delivery and Provision of Investigational Medicinal Products (1) The method of delivering and providing investigational medicinal products and whether trial subjects can use them on their own at home depends to a high degree on the investigational medicinal product’s administration route and safety profile. (2) When investigational medicinal products are delivered and provided through decentralized measures to trial subjects, this must be documented in the protocol. The process of delivering and providing said products must also be clearly stated in the informed consent form; only after being explained to a trial subject by the trial team, and after the trial subject’s consent is obtained, may such decentralized measures be used. (3) Investigational products prescribed by the principal investigator/sub-investigator must be reviewed by a delegated pharmacist to confirm that the investigational products’ specific items, dosage, duration, total quantity, and labeling align with the trial design. The pharmacist must also review each trial subject’s medication history, to ensure there are no medication-related issues; only then, and only in a manner that ensures the investigational product’s quality and the subject’s privacy, may delegated and specifically-trained trial personnel provide the investigational product to the subject. (4) Compliance with relevant regulations such as the Pharmaceutical Affairs Act, Pharmacists Act, Regulations on Good Practices for Drug Dispensation, and Regulations for Good Clinical Practice is required. 4. Remote Monitoring of Subject Safety (1) Decentralized trial designs involve trial subjects performing relatively large numbers of trial-related procedures at home. The principal investigator must delegate trained, qualified personnel to perform tasks such as collecting blood samples, administering investigational products, conducting safety monitoring, doing adverse event tracking, etc. (2) If trial subjects receive protocol-prescribed testing at nearby medical facilities or laboratories rather than at the original trial site, these locations must be authorized by the trial sponsor and must have relevant laboratory certification; only then may they collect or analyze samples. Such locations must provide detailed records to the principal investigator, to be archived in the trial master file. (3) The trial protocol and schedule must clearly specify which visits must be conducted at the trial site; which can be conducted via phone calls, video calls, or home visits; which tests must be performed at nearby laboratories; and whether trial subjects have multiple or single options at each visit. 5. Subject Reporting of Adverse Events (1) If the trial uses a digital platform to enhance adverse event reporting, trial subjects must be able to report adverse events through the digital platform, such as via a mobile phone app; that is, the principal investigator must be able to immediately access such adverse event information. (2) The principal investigator must handle such reports using risk-based assessment methods. The principal investigator must validate the adverse event reporting platform’s effectiveness, and must develop procedures to identify potential duplicate reports. 6. Remote Data Monitoring (1) If a sponsor chooses to implement remote monitoring, it must perform a reasonability assessment to confirm the appropriateness of such monitoring and establish a remote monitoring plan. (2) The monitoring plan must include monitoring strategies, monitoring personnel responsibilities, monitoring methods, rationale for such implementation, and critical data and processes that must be monitored. It must also generate comprehensive monitoring reports for audit purposes. (3) The sponsor is responsible for ensuring the implementation of remote monitoring, and must conduct risk assessments regarding the implementation process’ data protection and information confidentiality. 7. Information Systems and Electronic Data Collection, Processing, and Storage (1) In accordance with the Regulations for Good Clinical Practice, data recorded in clinical trials must be trustworthy, reliable, and verifiable. (2) It must be ensured that all organizations participating in the clinical trial have a full picture of the data flow. It is recommended that the trial protocol and trial-related documents include data flow diagrams and additional explanations. (3) Define the types and scopes of subject personal data that will be collected, and ensure that every step in the process properly protects their data in accordance with the Personal Data Protection Act. II. A Comparison with Decentralized Trial Regulations in Other Countries Denmark became the first country in the world to release regulatory measures on decentralized trials, issuing the “Danish Medicines Agency’s Guidance on the Implementation of Decentralized Elements in Clinical Trials with Medicinal Products” in September 2021[2]. In December 2022, the European Union as a whole released its “Recommendation Paper on Decentralized Elements in Clinical Trials”[3]. The United States issued the draft “Decentralized Clinical Trials for Drugs, Biological Products, and Devices” document in May 2023[4]. The comparison in Table 1 shows that Taiwan’s guidelines a relatively similar in structure to those of Denmark and the EU; the US guidelines also cover medical device clinical trials. Table 1: Summary of Decentralized Clinical Trial Guidelines in Taiwan, Denmark, the European Union as a whole, and the United States Taiwan Denmark European Union as a whole United States What do the guidelines apply to? Medicinal products Medicinal products Medicinal products Medicinal products and medical devices Trial subject recruitment and electronic informed consent Covers informed consent process; informed consent interview; digital information sheet; trial subject consent form signing; etc. Covers informed consent process; informed consent interview; trial subject consent form signing; etc. Covers informed consent process; informed consent interview; digital information sheet; trial subject consent form signing; etc. Covers informed consent process; informed consent interview; etc. Delivery and provision of investigational medicinal products Delegated, specifically-trained trial personnel deliver and provide investigational medicinal products. The investigator or delegated personnel deliver and provide investigational medicinal products. The investigator, delegated personnel, or a third-party, Good Distribution Practice-compliant logistics provider deliver and provide investigational medicinal products. The principal investigator, delegated personnel, or a distributor deliver and provide investigational products. Remote monitoring of trial subject safety Trial subjects may do return visits at trial sites, via phone calls, via video calls, or via home visits, and may undergo testing at nearby laboratories. Trial subjects may do return visits at trial sites, via phone calls, via video calls, or via home visits, and may undergo testing at nearby laboratories. Trial subjects may do return visits at trial sites, via phone calls, via video calls, or via home visits. Trial subjects may do return visits at trial sites, via phone calls, via video calls, or via home visits, and may undergo testing at nearby laboratories. Trial subject reporting of adverse events Trial subjects may self-report adverse events through a digital platform. Trial subjects may self-report adverse events through a digital platform. Trial subjects may self-report adverse events through a digital platform. Trial subjects may self-report adverse events through a digital platform. Remote data monitoring The sponsor may conduct remote data monitoring. The sponsor may conduct remote data monitoring. The sponsor may conduct remote data monitoring (not permitted in some countries). The sponsor may conduct remote data monitoring. Information systems and electronic data collection, processing, and storage The recorded data must be credible, reliable, and verifiable. Requires an information system that is validated, secure, and user-friendly. The recorded data must be credible, reliable, and verifiable. Must ensure data reliability, security, privacy, and confidentiality. III. Conclusion The implementation of decentralized clinical trials must be approached with careful assessment of risks and rationality, with trial subject safety, rights, and well-being as top priorities. Since Taiwan’s Guidelines for Implementing Decentralized Elements in Medicinal Product Clinical Trials were just announced in June of this year, the status of decentralized clinical trial implementation is still pending industry feedback to confirm feasibility. The overall goal is to enhance and optimize the clinical trial environment in Taiwan. [1] 衛生福利部食品藥物管理署,〈藥品臨床試驗執行分散式措施指引〉,2023/6/12,https://www.fda.gov.tw/TC/siteListContent.aspx?sid=9354&id=43548(最後瀏覽日:2023/11/2)。 [2] [DMA] DANISH MEDICINES AGENCY, The Danish Medicines Agency’s guidance on the Implementation of decentralised elements in clinical trials with medicinal products (2021),https://laegemiddelstyrelsen.dk/en/news/2021/guidance-on-the-implementation-of-decentralised-elements-in-clinical-trials-with-medicinal-products-is-now-available/ (last visited Nov. 2, 2023). [3] [HMA] HEADS OF MEDICINES AGENCIES, [EC] EUROPEAN COMMISSION & [EMA] EUROPEAN MEDICINES AGENCY, Recommendation paper on decentralised elements in clinical trials (2022),https://health.ec.europa.eu/latest-updates/recommendation-paper-decentralised-elements-clinical-trials-2022-12-14_en (last visited Nov. 2, 2023). [4] [US FDA] US FOOD AND DRUG ADMINISTRATION, Decentralized Clinical Trials for Drugs, Biological Products, and Devices (draft, 2023),https://www.fda.gov/regulatory-information/search-fda-guidance-documents/decentralized-clinical-trials-drugs-biological-products-and-devices (last visited Nov. 2, 2023).

Analyzing the Framwork of the Regulation「Act For The Development of Biotech And New Pharmaceuticals Industry」in Taiwan

Taiwan Government passed The「Act for the Development of Biotech and New Pharmaceuticals Industry」for supporting the biopharmaceutical industry. The purpose of the Act is solely for biopharmaceutical industry, and building the leading economic force in Taiwan. To fulfill this goal, the Act has enacted regulations concerning funding, taxation and recruitment especially for the biopharmaceutical industry. The Act has been seen as the recent important law in the arena of upgrading industry regulation on the island. It is also a rare case where single legislation took place for particular industry. After the Act came into force, the government has promulgated further regulations to supplement the Act, including Guidance for MOEA-Approved Biotech and New Pharmaceuticals Company Issuing Stock Certificate, Deductions on Investments in R&D and Personnel Training of Biotech and New Pharmaceuticals Company, Guidance for Deduction Applicable to Shareholders of Profit-Seeking Enterprises -Biotech and New Pharmaceuticals Company etc. The following discussions are going to introduce the Act along with related incentive measures from an integrated standpoint. 1 、 Scope of Application According to Article 3 of the Act, 「Biotech and New Pharmaceuticals Industry」 refers to the industry that deals in New Rugs and High-risk Medical devices used by human beings, animals, and plants; 「Biotech and New Pharmaceuticals Company」 refers to a company in the Biotech and New Pharmaceuticals Industry that is organized and incorporated in accordance with the Company Act and engages in the research, development, and manufacture of new drugs and high-risk medical devices. Thus, the Act applies to company that conducts research and manufacture product in new drug or high-risk medical devices for human and animal use. Furthermore, to become a Biotech and New Pharmaceuticals Company stipulated in the Act, the Company must receive letter of approval to establish as a Biotech and New Pharmaceuticals Company valid for five years. Consequently, company must submit application to the authority for approval by meeting the following requirements: (1) Companies that conduct any R&D activities or clinical trials must receive permission, product registration, or proof of manufacture for such activities from a competent authority. However, for those conducted these activities outside the country will not apply. (2) When applied for funding for the previous year or in the same year, the expense on R&D in the previous year exceeds 5% of the total net revenue within the same year; or the expenses exceeds 10% of the total capital of the company. (3) Hired at least five R&D personnel majored in biotechnology. For New Drug and High-Risk Medical Device are confined in specific areas. New Drug provided in the Act refers to a drug that has a new ingredient, a new therapeutic effect or a new administration method as verified by the central competent authorities. And High-Risk Medical Device refers to a type of Class III medical devices implanted into human bodies as verified by the central competent authorities. Therefore, generic drug, raw materials, unimplanted medical device, and medical device are not qualified as type III, are all not within the scope of the Act and are not the subject matter the Act intends to reward. 2 、 Tax Benefits Article 5, 6 and 7 provided in the Act has followed the footsteps of Article 6 and 8 stipulated of the Statute, amending the rules tailored to the biopharmaceutical industry, and provided tax benefits to various entities as 「Biotech and New Pharmaceuticals Company」, 「Investors of Biotech and New Pharmaceuticals Industry」, 「Professionals and Technology Investors」. (1) Biotech and New Pharmaceuticals Company In an effort to advance the biopharmaceutical industry, alleviate financial burden of the companies and strengthen their R&D capacity. The Act has provided favorable incentive measures in the sector of R&D and personnel training. According to Article 5: 「For the purpose of promoting the Biotech and New Pharmaceuticals Industry, a Biotech and New Pharmaceuticals Company may, for a period of five years from the time it is subject to profit-seeking enterprise income tax payable, enjoy a reduction in its corporate income tax payable, for up to 35% of the total funds invested in research and development (R&D) and personnel training each year.」 Consequently, company could benefit through tax deduction and relieve from the stress of business operation. Moreover, in supporting Biotech and New Pharmaceutical Company to proceed in R&D and personnel training activities, the Act has set out rewards for those participate in ongoing R&D and training activities. As Article 5 provided that」 If the R&D expenditure of a particular year exceeds the average R&D expenditure of the previous two years, or if the personnel training expenditure of a particular year exceeds the average personnel training expenditure of the pervious two years, 50% of the exceed amount in excess of the average may be used to credit against the amount of profit-seeking enterprise income tax payable. 「However, the total amount of investment credited against by the payable corporate income tax in each year shall not exceed 50% of the amount of profit-seeking enterprise income tax payable by a Biotech and New Pharmaceuticals Company in a year, yet this restriction shall not apply to the amount to be offset in the last year of the aforementioned five-year period. Lastly, Article 5 of the Act shall not apply to Biotech and New Pharmaceutical Company that set up headquarters or branches outside of Taiwan. Therefore, to be qualified for tax deduction on R&D and personnel training, the headquarters or branches of the company must be located in Taiwan. (2) Investors of Biotech and New Pharmaceuticals Company To raise funding, expand business development, and attract investor continuing making investments, Article 6 of the Act has stated that 「In order to encourage the establishment or expansion of Biotech and New Pharmaceuticals Companies, a profit-seeking enterprise that subscribes for the stock issued by a Biotech and New Pharmaceuticals Company at the time of the latter's establishment or subsequent expansion; and has been a registered shareholder of the Biotech and New Pharmaceuticals Company for a period of 3 years or more, may, for a period of five years from the time it is subject to corporate income tax, enjoy a reduction in its profit-seeking enterprise income tax payable for up to 20% of the total amount of the price paid for the subscription of shares in such Biotech and New Pharmaceuticals Company.」 Yet 「If the afore-mentioned profit-seeking enterprise is a venture capital company (「VC」), such VC corporate shareholders may, for a period of five years from the fourth anniversary year of the date on which the VC becomes a registered shareholder of the subject Biotech and New Pharmaceuticals Company, enjoy a reduction in their profit-seeking enterprise income tax payable based on the total deductible amount enjoyed by the VC under Paragraph 1 hereof and the shareholders' respective shareholdings in the VC.」 The government enacted this regulation to encourage corporations and VC to invest in biotech and new pharmaceutical company, and thus provide corporate shareholders with 20% of profit-seeking enterprise income tax payable deduction, and provide VC corporate shareholders tax deduction that proportion to its shareholdings in the VC. (3) Top Executives and Technology Investors Top Executives refer to those with biotechnology background, and has experience in serving as officer of chief executive (CEO) or manager; Technology Investors refer to those acquire shares through exchange of technology. As biopharmaceutical industry possesses a unique business model that demands intensive technology, whether top executives and technology investors are willing to participate in a high risk business and satisfy the needs of industry becomes a critical issue. Consequently, Article 7 of the Act stated that 「In order to encourage top executives and technology investors to participate in the operation of Biotech and New Pharmaceuticals Companies and R&D activities, and to share their achievements, new shares issued by a Biotech and New Pharmaceuticals Company to top executives and technology investors (in return of their knowledge and technology) shall be excluded from the amount of their consolidated income or corporate income of the then current year for taxation purposes; provided, however, that if the title to the aforesaid shares is transferred with or without consideration, or distributed as estate, the total purchase price or the market value of the shares at the time of transfer as a gift or distribution as estate shall be deemed income generated in that tax year and such income less the acquisition cost shall be reported in the relevant income tax return.」 Additionally, 「For the title transfer of shares under the preceding paragraph, the Biotech and New Pharmaceuticals Company concerned shall file a report with the local tax authorities within thirty 30 days from the following day of the title transfer.」 Purpose of this regulation is to attract top executives and technology personnel for the company in long-term through defer taxation. Moreover, the Biotech and New Pharmaceutical Company usually caught in a prolong period of losses, and has trouble financing through issuing new shares, as stipulated par value of each share cannot be less than NTD $10.Thus, in order to offer top executive and technology investors incentives and benefits under such circumstances, Article 8 has further provided that」Biotech and New Pharmaceutical Companies may issue subscription warrants to its top executives and technology investors, provided that the proposal for the issuance of the aforesaid subscription warrants shall pass resolution adopted by a majority votes of directors attended by at least two-thirds (2/3) of all the directors of the company; and be approved by the competent authorities. Holders of the subscription warrants may subscribe a specific number of shares at the stipulated price. The amount of stipulated price shall not be subject to the minimum requirement, i.e. par value of the shares, as prescribed under Article 140 of the Company Act. Subscription of the shares by exercising the subscription warrant shall be subject to income tax in accordance with Article 7 hereof. if a Biotech and New Pharmaceutical Company issue new shares pursuant to Article 7 hereof, Article 267 of the Company Act shall not apply. The top executives and technology investors shall not transfer the subscription warrant acquired to pursuant to this Article.」 These three types of tax benefits are detailed incentive measures tailor to the biopharmaceutical industry. However, what is noteworthy is the start date of the benefits provided in the Act. Different from the Statue, the Act allows company to enjoy these benefits when it begins to generate profits, while the Statute provides company tax benefits once the authority approved its application in the current year. Thus, Biotech and New Pharmaceuticals Company enjoys tax benefits as the company starts to make profit. Such approach reflects the actual business operation of the industry, and resolves the issue of tax benefits provided in the Statue is inapplicable to the biopharmaceutical industry. 3 、 Technical Assistance and Capital Investment Due to the R&D capacity and research personnel largely remains in the academic circle, in order to encourage these researchers to convert R&D efforts into commercial practice, the government intends to enhance the collaboration among industrial players, public institutions, and the research and academic sectors, to bolster the development of Biotech and New Pharmaceuticals Company. However, Article 13 of Civil Servants Service Act prohibits officials from engaging in business operation, the Act lifts the restriction on civil servants. According to Article 10 of the Act provided that」For a newly established Biotech and New Pharmaceuticals Company, if the person providing a major technology is a research member of the government research organization, such person may, with the consent of the government research organization, acquired 10% or more of the shares in the Biotech and New Pharmaceuticals Company at the time of its establishment, and act as founder, director, or technical adviser thereof. In such case, Article 13 of the Civil Servants Service Act shall not apply. And the research organization and research member referred to thereof shall be defined and identified by the Executive Yuan, in consultation with the Examination Yuan.」 This regulation was enacted because of the Civil Servants Services Act provided that public officials are not allowed to be corporate shareholders. However, under certain regulations, civil servants are allowed to be corporate shareholders in the sector of agriculture, mining, transportation or publication, as value of the shares cannot exceed 10% of the total value of the company, and the civil servant does not served in the institution. In Taiwan, official and unofficial research institution encompasses most of the biotechnology R&D capacity and research personnel. If a researcher is working for a government research institution, he would be qualified as a public servant and shall be governed by the Civil Servants Service Act. As a result of such restriction, the Act has lifted the restriction and encouraged these researchers to infuse new technologies into the industry. At last, for advancing the development of the industry, Article 11 also provided that 」R&D personnel of the academic and research sectors may, subject to the consent of their employers, served as advisors or consultants for a Biotech and New Pharmaceuticals Company.」 4 、 Other Regulations For introducing and transferring advanced technology in support of the biopharmaceutical industry, Article 9 stated that 「Organization formed with government funds to provide technical assistance shall provide appropriate technical assistance as may be necessary.」 Besides technical assistance, government streamlines the review process taken by various regulatory authorities, in order to achieve an improved product launch process result in faster time-to-market and time-to profit. As Article 12 provided that 「the review and approval of field test, clinical trials, product registration, and others, the central competent authorities shall establish an open and transparent procedure that unifies the review system.」

Israel’s Technological Innovation System

I.Introduction Recently, many countries have attracted by Israel’s technology innovation, and wonder how Israel, resource-deficiency and enemies-around, has the capacity to enrich the environment for innovative startups, innovative R&D and other innovative activities. At the same time, several cross-border enterprises hungers to establish research centers in Israel, and positively recruits Israel high-tech engineers to make more innovative products or researches. However, there is no doubt that Israel is under the spotlight in the era of innovation because of its well-shaped national technology system framework, innovative policies of development and a high level of R&D expenditure, and there must be something to learn from. Also, Taiwanese government has already commenced re-organization lately, how to tightly connect related public technology sectors, and make the cooperation more closely and smoothly, is a critical issue for Taiwanese government to focus on. Consequently, by the observation of Israel’s national technology system framework and technology regulations, Israel’s experience shall be a valuable reference for Taiwanese government to build a better model for public technology sectors for future cooperation. Following harsh international competition, each country around the world is trying to find out the way to improve its ability to upgrade international competitiveness and to put in more power to promote technology innovation skills. Though, while governments are wondering how to strengthen their countries’ superiority, because of the differences on culture and economy, those will influence governments’ points of view to form an appropriate national innovative system, and will come with a different outcome. Israel, as a result of the fact that its short natural resources, recently, its stunning performance on technology innovation system makes others think about whether Israel has any characteristics or advantages to learn from. According to Israeli Central Bureau of Statistics records, Israel’s national expenditures on civilian R&D in 2013 amounted to NIS 44.2 billion, and shared 4.2% of the GDP. Compared to 2012 and 2011, the national expenditure on civilian R&D in 2013, at Israel’s constant price, increased by 1.3%, following an increase of 4.5% in 2012 and of 4.1% in 2011. Owing to a high level of national expenditure poured in, those, directly and indirectly, makes the outputs of Israel’s intellectual property and technology transfer have an eye-catching development and performance. Based on Israeli Central Bureau of Statistics records, in 2012-2013, approximately 1,438 IP invention disclosure reports were submitted by the researchers of various universities and R&D institutions for examination by the commercialization companies. About 1,019 of the reports were by companies at the universities, an increase of 2.2% compared to 2010-2011, and a 1% increase in 2010-2011 compared to 2008-2009. The dominant fields of the original patent applicants were medicines (24%), bio-technology (17%), and medical equipment (13%). The revenues from sales of intellectual property and gross royalties amounted to NIS 1,881 million in 2012, compared to NIS 1,680 million in 2011, and increase of 11.9%. The dominant field of the received revenues was medicines (94%). The revenues from sales of intellectual property and gross royalties in university in 2012 amounted to NIS 1,853 million in 2012, compared to NIS 1,658 million in 2011, an increase of 11.8%. Therefore, by the observation of these records, even though Israel only has 7 million population, compared to other large economies in the world, it is still hard to ignore Israel’s high quality of population and the energy of technical innovation within enterprises. II.The Recent Situation of Israel’s Technology Innovation System A.The Determination of Israel’s Technology Policy The direction and the decision of national technology policy get involved in a country’s economy growth and future technology development. As for a government sector deciding technology policy, it would be different because of each country’s government and administrative system. Compared to other democratic countries, Israel is a cabinet government; the president is the head of the country, but he/she does not have real political power, and is elected by the parliament members in every five years. At the same time, the parliament is re-elected in every four years, and the Israeli prime minister, taking charge of national policies, is elected from the parliament members by the citizens. The decision of Israel’s technology policy is primarily made by the Israeli Ministers Committee for Science and Technology and the Ministry of Science and Technology. The chairman of the Israeli Ministry Committee for Science and Technology is the Minister of Science and Technology, and takes charge of making the guideline of Israel’s national technology development policy and is responsible for coordinating R&D activities in Ministries. The primary function of the Ministry of Science and Technology is to make Israel’s national technology policies and to plan the guideline of national technology development; the scope includes academic research and applied scientific research. In addition, since Israel’s technology R&D was quite dispersed, it means that the Ministries only took responsibilities for their R&D, this phenomenon caused the waste of resources and inefficiency; therefore, Israel government gave a new role and responsibility for the Chief Scientists Forum under the Ministry of Science and Technology in 2000, and wished it can take the responsibility for coordinating R&D between the government’s sectors and non-government enterprises. The determination of technology policy, however, tends to rely on counseling units to provide helpful suggestions to make technology policies more intact. In the system of Israel government, the units playing a role for counseling include National Council for Research and Development (NCRD), the Steering Committee for Scientific Infrastructure, the National Council for Civil Research and Development (MOLMOP), and the Chief Scientists Forums in Ministries. Among the aforementioned units, NCRD and the Steering Committee for Scientific Infrastructure not only provide policy counseling, but also play a role in coordinating R&D among Ministries. NCRD is composed by the Chief Scientists Forums in Ministries, the chairman of Planning and Budgeting Committee, the financial officers, entrepreneurs, senior scientists and the Dean of Israel Academy of Sciences and Humanities. NCRD’s duties include providing suggestions regarding the setup of R&D organizations and related legal system, and advices concerning how to distribute budgets more effectively; making yearly and long-term guidelines for Israel’s R&D activities; suggesting the priority area of R&D; suggesting the formation of necessary basic infrastructures and executing the priority R&D plans; recommending the candidates of the Offices of Chief Scientists in Ministries and government research institutes. As for the Steering Committee for Scientific Infrastructure, the role it plays includes providing advices concerning budgets and the development framework of technology basic infrastructures; providing counsel for Ministries; setting up the priority scientific plans and items, and coordinating activities of R&D between academic institutes and national research committee. At last, as for MOLMOP, it was founded by the Israeli parliament in 2002, and its primary role is be a counseling unit regarding technology R&D issues for Israel government and related technology Ministries. As for MOLMOP’s responsibilities, which include providing advices regarding the government’s yearly and long-term national technology R&D policies, providing the priority development suggestion, and providing the suggestions for the execution of R&D basic infrastructure and research plans. B.The Management and Subsidy of Israel’s Technology plans Regarding the institute for the management and the subsidy of Israel’s technology plans, it will be different because of grantee. Israel Science Foundation (ISF) takes responsibility for the subsidy and the management of fundamental research plans in colleges, and its grantees are mainly focused on Israel’s colleges, high education institutes, medical centers and research institutes or researchers whose areas are in science and technical, life science and medicine, and humanity and social science. As for the budget of ISF, it mainly comes from the Planning and Budgeting Committee (PBC) in Israel Council for Higher Education. In addition, the units, taking charge of the management and the subsidy of technology plans in the government, are the Offices of the Chief Scientist in Ministries. Israel individually forms the Office of the Chief Scientist in the Ministry of Agriculture and Rural Development, the Ministry of Communications, the Ministry of Defense, the Ministry of National Infrastructures, Energy and Water Resources, the Ministry of Health and the Ministry of Economy. The function of the Office of the Chief Scientist not only promotes and inspires R&D innovation in high technology industries that the Office the Chief Scientist takes charge, but also executes Israel’s national plans and takes a responsibility for industrial R&D. Also, the Office of the Chief Scientist has to provide aid supports for those industries or researches, which can assist Israel’s R&D to upgrade; besides, the Office of the Chief Scientists has to provide the guide and training for enterprises to assist them in developing new technology applications or broadening an aspect of innovation for industries. Further, the Office of the Chief Scientists takes charge of cross-country R&D collaboration, and wishes to upgrade Israel’s technical ability and potential in the area of technology R&D and industry innovation by knowledge-sharing and collaboration. III.The Recent Situation of the Management and the Distribution of Israel’s Technology Budget A.The Distribution of Israel’s Technology R&D Budgets By observing Israel’s national expenditures on civilian R&D occupied high share of GDP, Israel’s government wants to promote the ability of innovation in enterprises, research institutes or universities by providing national resources and supports, and directly or indirectly helps the growth of industry development and enhances international competitiveness. However, how to distribute budgets appropriately to different Ministries, and make budgets can match national policies, it is a key point for Israel government to think about. Following the Israeli Central Bureau of Statistics records, Israel’s technology R&D budgets are mainly distributed to some Ministries, including the Ministry of Science and Technology, the Ministry of Economy, the Ministry of Agriculture and Rural Development, the Ministry of National Infrastructures, Energy and Water Resources, the Israel Council for Higher Education and other Ministries. As for the share of R&D budgets, the Ministry of Science and Technology occupies the share of 1.7%, the Ministry of Economy is 35%, the Israel Council for Higher Education is 45.5%, the Ministry of Agriculture and Rural Development is 8.15%, the Ministry of National Infrastructures, Energy and Water Resources is 1.1%, and other Ministries are 7.8% From observing that Israel R&D budgets mainly distributed to several specific Ministries, Israel government not only pours in lot of budgets to encourage civilian technology R&D, to attract more foreign capitals to invest Israel’s industries, and to promote the cooperation between international and domestic technology R&D, but also plans to provide higher education institutes with more R&D budgets to promote their abilities of creativity and innovation in different industries. In addition, by putting R&D budgets into higher education institutes, it also can indirectly inspire students’ potential innovation thinking in technology, develop their abilities to observe the trend of international technology R&D and the need of Israel’s domestic industries, and further appropriately enhance students in higher education institutes to transfer their knowledge into the society. B.The Management of Israel’s Technology R&D Budgets Since Israel is a cabinet government, the cabinet takes responsibility for making all national technology R&D policies. The Ministers Committee for Science and Technology not only has a duty to coordinate Ministries’ technology policies, but also has a responsibility for making a guideline of Israel’s national technology development. The determination of Israel’s national technology development guideline is made by the cabinet conference lead by the Prime Minister, other Ministries does not have any authority to make national technology development guideline. Aforementioned, Israel’s national technology R&D budgets are mainly distributed to several specific Ministries, including the Ministry of Science and Technology, the Ministry of Economy, the Ministry of Agriculture and Rural Development, the Ministry of National Infrastructures, Energy and Water Resources, the Israel Council for Higher Education, and etc. As for the plan management units and plan execution units in Ministries, the Office of the Chief Scientist is the plan management unit in the Ministry of Science and Technology, and Regional Research and Development Centers is the plan execution unit; the Office of the Chief Scientist is the plan management unit in the Ministry of Economy, and its plan execution unit is different industries; the ISF is the plan management units in the Israel Council for Higher Education; also, the Office of the Chief Scientist is the plan management unit in the Ministry of Agriculture, and its plan execution units include the Institute of Field and Garden Corps, the Institute of Horticulture, the Institute of Animal, the Institute of Plan Protection, the Institute of Soil, Water & Environmental Sciences, the Institute for Technology and Storage of Agriculture Products, the Institute of Agricultural Engineering and Research Center; the Office of the Chief Scientist is the plan management unit in the Ministry of National Infrastructures, Energy and Water Resources, and its plan execution units are the Geological Survey of Israel, Israel Oceanographic and Limnological Research and the Institute of Earth and Physical. As for other Ministries, the Offices of the Chief Scientist are the plan management units for Ministries, and the plan execution unit can take Israel National Institute for Health Policy Research or medical centers for example.

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