(Editor’s note – Kristen Rupert is executive director of the AIM International Business Council.)
I was pleased to represent AIM members last week on Governor Deval Patrick's trade mission to Israel. More than 100 Massachusetts business and government leaders joined the governor for three days of meetings to expand business ties between the commonwealth and Israel.
Here’s what you need to know about doing business with Israel:
- Israel is eager to do business with Massachusetts. Israeli business leaders have a strong appetite for risk-taking and a high tolerance for failure. They have plenty of energy to start and build companies and partnerships.
- There is a history of successful collaboration between Israel and Massachusetts. Many Massachusetts companies already have a presence in Israel and a growing number of Israeli companies are setting up shop in the Bay State. Two hundred Israeli companies representing more than 6,600 employees and 23,000 related jobs had operations in Massachusetts as of 2012, according to a recent report by Stax Inc. for the New England-Israel Business Council. Global companies with Massachusetts headquarters—EMC, Akamai, PTC, Covidien, Kraft Companies, Philips—have made significant investments in Israel in the areas of research and development and manufacturing.
- Common language. Most business people in Israel speak English in addition to Hebrew or Arabic.
- Strong economy, young workers. Israel’s economy is growing at a steady rate of 3-5 percent annually. Inflation and unemployment are low. Job creation is healthy, though more jobs are needed. Average age of the work force is 26.
- Ease of doing business. The US and Israel have a strong economic and political relationship. The Free Trade Agreement signed in 1985 eased or eliminated many barriers to trade. The US is Israel’s largest trading partner.
- Compatible cultures and education. Many cultural similarities exist between Massachusetts and Israel. Education is a priority. On the trade mission, the University of Massachusetts established a student exchange program with The Technion University in Haifa. At a cybersecurity seminar during the mission, I sat next to a recent Northeastern University graduate working at her second cybersecurity start-up in Israel. At the E-Health Summit organized in Tel Aviv by the Massachusetts Technology Collaborative, I met an American-born entrepreneur whose start-up was just accepted into Harvard’s I-Lab. The highest-ranking US diplomat in Israel, US Ambassador Daniel Shapiro, is a Brandeis University graduate, as is his wife. The Shapiros hosted an event during the trade mission.
- Well-matched key industry sectors. Israel is generally ranked number one or number two in the world in technology and innovation. In 2013, Israel produced 1,000 new start-ups—the same number started in all of Western Europe during the same period, according to a briefing by John Medved of Our Crowd, an investor in Israeli start-ups. Israel is strong in industries that match well with Massachusetts’ strengths: health care, life sciences, clean tech, cyber-security, medical devices, technology, semiconductor, robotics, and higher education.
- Upcoming visits by Israeli business leaders - Ten Israeli start-up companies, chosen from 1,600 total applications, were recently named MassChallenge finalists for 2014. The founders of those companies will be in residence in Boston for four months starting later this month. Representing industries as diverse as dentistry, agriculture, food, medicine, clothing and law, these companies are eager to grow their businesses and learn from Massachusetts mentors. In September, a group of cyber-security executives from Israel is visiting Boston, New York and Chicago.
- Connections established and shared. Massachusetts leaders used the trade mission to establish and strengthen ties with Israeli government leaders, business executives, higher education administrators, entrepreneurs and venture capitalists. Insights from the mission will be shared by participants at AIM’s upcoming “Doing Business in Israel” seminar in late June or early July. Contact me at email@example.com for introductions or information related to the trade mission.
- Baked beans + hummus=the right mix. This equation was shared in a presentation by an executive of Zerto, a data disaster recovery company co-located in Boston and Israel. Zerto founders expanded to Boston from Israel because “The Bay State has the right mix of talent, large corporate customers, loyal personnel and is in a preferred time zone.”