The Israeli government approved a NIS 650 million (USD 180 million) stimulus package on Wednesday to support Israel’s high tech industry through the coronavirus crisis.
The Finance Ministry will transfer the money immediately to the Israel Innovation Authority (IIA), the Israeli government’s funding arm for R&D and innovation, to give out to companies that have submitted applications to the Authority since the beginning of the year.
The IIA will provide NIS 50 million (USD 14 million) to programs dedicated to fighting the coronavirus. The remaining NIS 600 million (USD 166 million) will be for the companies that applied for grants since the start of 2020. The IIA said it has received 1,161 applications since the beginning of the year.
“It is well understood even by the Finance Ministry that the high tech industry in Israel holds the key to pulling us out of the economic crisis following the [coronavirus] pandemic. The high tech industry is mainly based on private capital. Past experience shows that this funding source dwindles in times of crisis,” said Aharon Aharon, CEO of the Israel Innovation Authority.
There is also a significant decrease in sales revenue, due to the global nature of the crisis, he said. Companies with physical products experience additional challenges with supply chains, subcontractors, manufacturing, and distribution capabilities.
Earlier this month, the Israel Innovation Authority teamed up with the Health Ministry and the National Digital Israel Initiative at the Ministry of Social Equality to call for Israeli startups to submit proposals to develop, test, and implement technological solutions designed to deal with the challenges of COVID-19, the disease caused by the novel coronavirus.
The fund is set to back companies that have outstanding potential in the field of health or on the health system in Israel, or those poised for tech breakthroughs in the industry, with an initial sum of NIS 50 million (USD 13 million). The authority said it has received over 400 submissions for grants so far.
The coronavirus pandemic has sent over one million Israelis into unemployment, an unprecedented number in the state’s history. In the current situation, 24.1% of the Israeli workforce is unemployed.
Over 840,000 people registered for unemployment last month, with some 160,000 already unemployed.
“It is the government’s role, via the Israel Innovation Authority, to increase project funding at this time and allow good companies to successfully weather this crisis. We maintain constant communication with the companies, official representatives, and other relevant entities such as the Finance Ministry and the tax authority, in order to help mitigate this crisis. Understanding the challenges, they are all open to help with immediate measures to prevent further damage to the companies,” Aharon said.
This article first appeared in NoCamels, which covers innovations from Israel for a global audience.