With more start-up businesses than anywhere in the world except for the US (4000+ at any given time), Israel has become a regional technological powerhouse of interest to multi-nationals worldwide.
According to Steve Schoenfeld, Chief Investment Officer for BlueStar Indexes: “It’s a small country with a very large global footprint, and it bats well above its average in all of the metrics that define a successful economy.”
Even when much of the developed world was retrenching in 2008-2009, Israel was able to eke out modest growth. Since then, the nation’s economy has been growing at nearly twice the pace of the US economy. Its jobless rate is among the lowest in the developed world and it is a second home to virtually every big high-tech company in the world, including Apple, Google, Intel and Microsoft.
“Israel’s economy is doing well enough that the country can now be considered high-income,” according to Standard and Poor’s in its latest evaluation of Israel’s fiscal state. S&P said that with a per capita annual income of over $38,000, “we now view Israel as a high-income economy, with trend growth at the higher end of its peer income group.” Just five years ago, per capita income was about $28,000. This is due, S&P said, to Israel’s “prosperous and diverse economy,” with a good mix of manufacturing and high-tech, and also to the benefits the economy will realize as the country’s natural gas production comes online.
Recent foreign involvement in the country includes Google’s purchase of Waze for $1b; the US’ Palo Alto Networks acquisition of Israel’s (cyber security) Cyvera for $200m; Florida’s Opko Health’s acquisition of Israel’s Inspiro Medical, its 4th Israeli acquisition in recent years, for $10m; Russia’s Yandex’s acquisition of Israel’s KitLocate for $20m, to cite just a few examples.
On the trade side of the equation, the United States continues to be Israel’s largest trading partner, assisted by a free trade agreement which, when it was initialled in 1985, was the very first one that America signed with any foreign partner. Prime sectors include life sciences, biotech, aerospace, defense, agrotech, ICT, semiconductors and green tech. Israel is home, for example, to the world’s largest producer of generic pharmaceuticals (TEVA), as well as the world’s premier producer of desalination equipment (IDE Technologies).
But one significant contributing factor to that activity that is often overlooked in the US-Israel space are the many states and a number of regional economic development groups who have dedicated offices in Israel to encourage additional business activity between the two countries.
For example, ten US states presently operate offices in Israel including Delaware, Florida, Georgia, Illinois (*), Indiana, New Mexico (*), New York, Ohio (*), Oklahoma (*), and Pennsylvania (*). [n.b. The items indicated with an (*) are regional offices covering the entire Middle East as well.] In addition, Utah is about to open an Israel office and Missouri’s legislature has authorized funding for the state to reopen an office in Israel shortly as well.
Additional US groups active include Virginia (with a consultative operation functioning on a project-by-project basis), the Michigan-Israel Business Bridge, Fairfax County [Virginia] and Dayton [Ohio], all of whom operate here as well.
There is even an organization of state offices, the American State Offices Association (full disclosure: I chair that group) which runs joint programs for the states active. Next week, for example, in cooperation with the US Commercial Service and the Israel-America Chamber of Commerce (AMCHAM), ASOA will have a joint booth at the MIXiii Biomed/High Tech Exhibition and Conference in Tel Aviv.
And all of this, of course, is only in the US-Israel space. European and Asian entities are represented in Israel to promote their country’s business interests as well.
In a word, Israel has become such an attractive business opportunity that there seems to be no end to the level of interest and the desire to tap into the economy. EDI, of course, stands ready to assist any overseas group interested in tapping into these opportunities.