Treasury Pushes Reform to Revive University Startup Commercialization

Israel’s Finance Ministry is promoting a broad reform to revive a decline in academic commercialization, after fewer startups have been emerging from universities and fewer patents have been filed. The initiative was developed with the Israel Innovation Authority, the Planning and Budgeting Committee, and the Council of University Heads, following the success of earlier academic spinouts such as Mobileye from the Hebrew University and Copaxone from the Weizmann Institute.

A new report covering 2023 and 2024 shows the slowdown clearly. In 2024, the number of startups founded with the involvement of knowledge commercialization companies fell 13% to 81, patent applications dropped 14% to 562, and total revenues for those companies declined 2.5% to 992 million shekels, below the 1 billion shekel mark. At their peak in 2012, during Copaxone’s best sales year at Teva, these companies brought in nearly 2 billion shekels.

The Treasury says the disconnect between research and commercialization has widened since 2021, even though Israel remains strong in applied research and attracts many research grants. Of Israel’s 10 universities, 8 have commercialization companies, but officials say the system has become too cumbersome. Researchers involved in drafting the reform pointed to long contract-signing processes, small teams that must cover many technology fields, low institutional funding, and major regulatory and tax barriers.

Under the memorandum published by the ministry, universities will prepare seven standardized contract types to give entrepreneurs more certainty, while each institution will still publish its own versions. The plan also allows startups to work with external commercialization firms with specialized expertise, adds several tens of millions of shekels in new Innovation Authority funding, and creates a dedicated team to examine tax and regulatory barriers. The only major university not to sign the agreement is the Weizmann Institute, whose technology transfer company, Yeda, is considered one of Israel’s strongest.