When one thinks about countries that are hotbeds for medical technology innovation, Israel would not likely be at the top of anyone’s list. But people in the know will tell you that this small country, with a population of just a shade over 7.5 million people, has a reputation for being a tireless innovator in the field, with countries from all over the world flocking there to study their business model.

According to the Israeli Life Science Industry, an advocacy group, the med-tech industry is also young and growing. Of the currently operating 702 companies, 56% were founded during the last decade. A closer look reveals that a quarter (173 companies) of the industry was established in the last five years.  According to Israel Lifescience Industry, 56% (396) of the 702 companies were created within the last decade. Of those, 27% or 105 companies are revenue generating entities. The remaining 214 revenue generating companies are mature and were created prior to 2001. More impressive is the fact that 25 companies or 8% of all revenue producing companies were established within the last five years. Approximately 16% of the life science industry or 110 companies are at the seed stage, 11% or 74 companies are at the preclinical stage and 146 or 21% of the companies are at the clinical stage. The Israeli Life Science Industry is heavily biased towards the medical device sector, with 401 companies or 57% of the total. The largest sub sector in the medical device arena is the one containing therapeutic devices, both implantable and disposable. The latter comprises 41% of the total medical device body of companies, followed by medical equipment, diagnostic, imaging and monitoring companies contributing 18%, 13%, 11% and 6%, respectively.

“Israel is a treasure trove for the biomedical world community” Ruth Alon, Chair of the recent ILSI Biomed 2011 conference told Medical Device Daily.

At the Biomed meeting, Cedric Bisson MD, Managing Partner at iNovia Healthcare Ventures (Montreal, Quebec), told MDD Israel Editor Jonathan Goldstein that the Israeli technology community had nurtured itself on the need to export to survive, the lack of natural resources, and a strong and innovative entrepreneurial culture. In addition, government incentives and support, he felt, were key ingredients in the recipe. Examples included incubator programs, small company loans, binational collaborative grants, and other customized and well adapted programs. To go to the next level, he mentioned Israel’s need for an ecosystem containing adequately financed funds with a critical mass of local senior partners; he confirmed that Israel’s recent investment in Orbimed (New York)  appeared to be a significant step in this direction.

Goldstein also noted that the standard Israeli company is often not blessed with corporate or investment partners who have an innate understanding of the clinical and market environments. But it often has at its helm experienced managers, high-quality advisers (often from top U.S. centers) and energy and passion that takes the company far beyond what might be seen as normal elsewhere.