The Cabinet, at its weekly meeting today (Sunday, 6 September 2015), approved Prime Minister Benjamin Netanyahu’s plan to grant benefits to employers in the cyber field at the national cyber park in Be’er Sheva.
The benefit is designed to attract many leading companies and thousands of employees to the park in the coming years, with the intention of achieving 2, 500 employees in the next decade (approximately 50% of those currently employed in Israel).
The decision is also designed to encourage companies to begin operating at the park forthwith in order to advance the rapid development of the ecosystem at the site.
Attracting many leading multi-nationals to a new site, outside the heart of the existing high-tech industry in Israel, is a national challenge that requires commitment and encouragement by the government. The plan was formulated by a team led by Prime Minister’s Office Director General Eli Groner along with Finance Ministry Budget Director Amir Levy and Israel National Cyber Bureau head Dr. Eviatar Matania.
Prime Minister Netanyahu: “Moving forward on the developing cyber and high-tech park is a strategic change for Israel and creates new energy. This is my vision. We are taking a growth engine and government investment and are turning them into a global industry in the south. This is a government investment that we are leveraging for security alliances. I said that we would be among the five leading countries in the world in cyber and we are already in the top three. Aside from the goal of positioning Israel as a cyber power, we are pushing it so that Be’er Sheva becomes the cyber capital of the eastern hemisphere. This will have major positive implications for the entire Negev. This is of historic importance and we must push it forward with full force. There is a combination here of relying on the local market, the ability to translate it into national capabilities and integration with the developing market. This is what strengthens the economy so that it can grow forward.”
PMO Director General Groner: “The fact that we are currently among the leading countries of the world in the cyber sphere does not ensure that we will be in another decade. The State of Israel needs to ensure its position as a global cyber leader for both security and economic reasons, and our responsibility as the government I to make every effort to this end.”
Be’er Sheva Mayor Rubik Danilovitz: “Today’s government historic decision will turn Be’er Sheva into an international cyber center. This is a strategic move designed to combine research and development, knowledge-intensive industries, technology, academia and human capital. I am convinced that this decision will draw to Be’er Sheva cyber companies from around the world and, as a result, the Negev and Be’er Sheva, its capital, will enjoy economic growth and prosperity. I am full of appreciation for the government and Prime Minister Benjamin Netanyahu for the confidence, support and visionary leadership. The future is already here.”
INCB head Dr. Matania: “The cyber park in Be’er Sheva could – and needs to – become a global cyber center that spurs the entire Negev forward.
Israel’s cyber industry is on a major growth trend, while harnessing the country’s relative advantages into providing momentum for the growth of the global cyber market, which is expected to double in size in the coming years.
The CyberSpark has developed in recent years, since the government decided to establish it. It has been joined by the joint INCB-Ben Gurion University of the Negev research center (CERT-IL), which will start operations soon, as well as a number of multi-national companies that decided set up in cyber research and development activity. Its continued development as an international cyber center will assist in advancing Israel’s leadership in the field and will be at the vanguard of the development of high-tech industries in the Negev.
This decision creates a system of grants and is a significant tool in the government effort to turn Be’er Sheva into a global cyber center and strengthen the national cyber park that has already started to develop in the city. It also links two of the government’s main goals: Positioning Israel as a global cyber leader and developing the Negev. The move is expected to lead to thousands of new jobs in the Negev, both directly and indirectly.
The cyber companies that will locate in the park will receive grants as a proportion of the salaries paid to the cyber workers that they employ. The grant ceiling is expected to come down with the passage of time. The goal is to attract a significant number of companies to the park already in the next three years. The percentage of the grant for each cyber worker will be 20% in 2016-2018, 15% in 2019, 10% in 2021 and 5% in 2022.
Also, the government decision is expected to have a positive influence on the economy as a whole and not just in Be’er Sheva, since it provides additional benefits for companies that leave their intellectual property in Israel or bring it here from abroad. The percentage of the grant to such companies will be greater than 5%. Companies that bring their intellectual property to Israel will receive even larger grants of an additional 10%, so that it will be possible to reach up to 30% of cyber workers’ salaries.
Be’er Sheva has a unique – in both Israel and the world – ecosystem that will be a source of strength for all of its partners and a base for long-term global leadership and development. The national cyber park in Be’er Sheva will be a unique cluster that will provide impetus for the city’s unique combination of IDF tech units that will come to it, research and teaching infrastructures at Ben-Gurion University of the Negev and the elite industrial centers that are developing there.”
INCB head Dr. Matania pointed out that Israel is at an excellent jumping-off point vis-à-vis its cyber industry. Approximately 250 companies are currently active in the field, with approximately half of them being start-ups that have been established in the past five years. Over 25 multi-national firms have cyber activity based in Israel. Since the start of 2015, Israeli cyber companies have raised approximately $250 million, almost 20% of global investments in cyber. In the first half of 2015, 14 Israeli companies were acquired for an overall sum of $1.3 billion. The Israeli cyber industry has major growth potential that finds expression in the possibility of increasing the market by billions of shekels and creating thousands of new jobs.