Financial and Policy Medical Innovations Lab
DescriptionCapping a tremendous year for the Israel Center, Milken Institute Chairman Mike Milken completed a visit to Israel in December 2007, meeting with Prime Minister Ehud Olmert, President Shimon Peres and Israel's top scientists to galvanize the country's human, social and financial capital around a nascent but promising biotech sector.
Widely covered by the media, the highlight of his visit was a Financial and Policy Medical Innovations Lab, held in Jerusalem and attended by more than 100 scientists, policy makers, entrepreneurs and business leaders to look at the challenges and opportunities of Israel's biotech sector, building on the strengths of its high-tech human capital. The Lab was designed by the Milken Institute at the request of President Shimon Peres.
Milken engaged the gathering at the Lab in a look at the potential of the nation's human capital - noting that Israel has more scientists per capita than any other developed country and, extrapolating from Nobel laureate Gary Becker's calculations, "the human capital of Israel is worth several multiples of the officially reported size of Israel's assets as published by the Bank of Israel."
However, Milken also warned that Israel's education system inadequacies needed to be swiftly and effectively addressed to avoid depreciation and further drain on the human capital assets.
"Israel must address the challenges within its educational infrastructure. Continuing and increased focus on the country's elementary and secondary education system for all citizens will better prepare the next generation to participate in the global knowledge industries of the future," he said.
He also noted improvements needed in the financial infrastructure and regulatory systems, "Barriers need to be reduced to allow for easier entry for entrepreneurs, the capital market needs to be expanded and the concentration of ownership in the banking system needs to be cut."
President Shimon Peres agreed with Milken, calling for more regulatory flexibility and financial support for entrepreneurs. He also stated that the need for medical services and products in developing regions, such as Asia and Africa, presents a key opportunity for both goodwill and sustainable business opportunities.
"We have to think differently, mobilize our talents to make ourselves a better people and show the world that goodwill may be the real force of our time," Peres said.
Prime Minister Ehud Olmert also attended, focusing his comments on his vision of dedicating 10 percent of Israel's GDP to research in development, which in turn would attract foreign investment. Thanking Milken for his tremendous contribution in drawing attention to the importance of the industry and to the Milken Institute for organizing the event, Olmert said, "This is one of the most important seminars, in terms of practical ramifications for the Israeli economy, which has been held in Israel in many years."
Other participants included Yarom Ariav, Finance Ministry director-general; Professor Shlomo Ben Haim, biotech entrepreneur and investor; Professor Raphael Walden, chair of medical programming for the Jerusalem Congress and Deputy Director of the Tel-Hashomer General Hospital; Dr. Ora Dar, Director of Life Sciences, Office of the Chief Scientist; Professor Shlomo Mor-Yosef, CEO of the Hadassah Medical Organization; and Dr. Orna Barry, a biotech and venture capitalist expert.
The Milken Institute brought to the Lab a set of conceptual tools that could leverage great success from the country's existing biotech industry resources. These concepts, which can be found throughout the work of the Milken Institute, the Milken Institute's FasterCures/The Center for Accelerating Medical Solutions and in another Milken organization, The Prostate Cancer Foundation, include using the capital markets as an agent of change to increase global prosperity, transferring successful financial technologies to new regions and industries, using philanthropy to leverage increased funding from public and private sources, and sharing research and medical data to accelerate the development of cures.
Through a mix of presentations and working group discussions, Lab participants were brought up to date on the latest information and ideas, and also had an active role in brainstorming new ideas to break up roadblocks and discover new routes to foster growth in Israel's biotech sector.
Those present noted that Israel faces challenges in the areas of under-investment in technology transfer, a lack of locally based financial services infrastructure and shortfalls in the training and retention of researchers.
"It is much harder today to bring a medical device to market than in the past. Regulation is stricter, there are changes in intellectual property laws, and the process for insurance reimbursement has become longer and more complicated. If I once was able to bring a new medical device to the sales stage for $20 million, today it could cost at least $100 million" said Professor Shlomo Ben-Haim.
In specially designed workshops, Lab members tackled these issues and developed several solution-generating ideas for both policy and financial innovation. These ideas included:
•Development of Israel as a global medical financial center, to include strengthening the graduate education systems in business and finance, developing Israeli-based financial services to provide a full spectrum of funding and financing services, and fostering acumen in the specifics of medical research and biotech financing
•Increasing information technology infrastructure for health records and clinical trials to accelerate medical solutions
•Creating global collaborations in curing infectious and chronic disease, with specific programs for Turkey, India, Kazakhstan, China and other rapidly developing regions.
The next steps are to compile a report on the content of the Lab, the creation of working groups to further develop the solution concepts and to bring the Israeli biotech community back together to work on implementation during the Jerusalem Congress in May 2008.
We also expect to present the findings and a current update on implementation during the 2008 Milken Institute Global Conference.
Media coverage of the Milken Institute Financial and Policy Innovations Lab can be found online at:
Additional articles at Globes Online available, if registered, by searching for "Milken" in the archives.
See related documents:
Financial and Policy Medical Innovations Lab Program (PDF)