Israel's biotechnology industry is relatively new and an offspring of its American counterpart. Its creation in the late 1960s resulted from the establishment in Israel of subsidiaries of foreign pharmaceutical companies. The first of these was a subsidiary formed by Miles Laboratories with the Weizmann Institute of Technology, called Miles-Yeda. This was followed by the Hebrew University-Weizmann Institute subsidiary, Ames-Yissum. Over time, these firms became wholly Israeli-owned entities. Gradually, foreign venture capitalists began to initiate other independent biotechnology entities in Israel. As of the early 1980s, Israeli venture capitalists had begun creating their own science-based entities.

Many economists call biotechnology a "natural" Israeli industry. Its primary input has been data from research and university laboratories. The only other major ingredient has been American capital to support research and development activity. The main areas of research in the mid-1980s included genetic engineering, human and animal diagnostics, agricultural biofertilization, and aquatic biotechnology.

Data as of December 1988