By Sid Good
What do Apple, Berkshire Hathaway, GE, eBay, Twitter, Dell, Oracle, P&G, Google, Facebook, IBM, AT&T, J&J, GM, Microsoft, HP, Intel, Citigroup, and more than 350 other U.S.-based and other multinational businesses have in common? They all have acquired Israeli startups, purchased or licensed Israeli technologies, or established Israel-based R&D facilities.
It is near to impossible to turn on a smart phone or computer, visit the hospital or pharmacy, watch TV, drive a car, or go to the grocery store and not be impacted by Israeli technology. It has become the secret sauce behind the innovation generating business growth of companies across a broad spectrum of industries.
As pressured as most companies are to constantly innovate and stay ahead of competition, there are few options available beyond the internal R&D resources that most companies use to sustain current in-house product lines and services. It is even more challenging to protect, process, and analyze the data that companies gather to optimize their operations. Therefore, Israeli technologies have been providing solutions to companies that seek innovative resources beyond their current capabilities.
Why Israel? Israel is the world leader in R&D spending per capita — two times the OECD (Organization for Economic Co-operation and Development) average. It is third in scientific publications per capita, first in Nobel Prizes per capita this decade, and maintains a very strong industry/academia relationship. With mandatory service in the Israel Defense Force, the population is screened for top talent to serve in technology focused units with intensive training in computer science, personal leadership, and managerial training that results in strong relationships and hundreds of tech startups for civilian use.
Otherwise, because of its relatively small size and limited local market, Israel is forced to seek global markets for collaborations and partnerships of its products and services. The people of Israel and the overall culture reflect a community of early adopters who are risk tolerant with no stigma attached to failure — other than the need to learn from it.
The reality is that if you walk into any technology company in Israel you would have a difficult time differentiating whether you are in Mountain View, CA, or Tel Aviv. Israel has more than 4000 startup companies, 20 technology incubators, 70 accelerator programs, and 15 tech transfer offices — all in an area the size of New Jersey.
The resulting benefits to U.S.-based businesses are the proprietary solutions and added value that generates extraordinary growth from technologies developed in Israel, now known as “Startup Nation.” From life sciences, biotech, computer software, cybersecurity, and nano-technology to big data analytics, IOT, sensor technology, specialty coatings, renewable energy, and food and beverage, Israel is leading the way in providing innovative solutions in a variety of industries.
The list of Israeli technology companies that have benefited US-based businesses is seemingly unending. Iscar was the first acquisition by Warren Buffett and Berkshire Hathaway of a business outside the US. Waze, the GPS navigation app was purchased by Google for $1.3 billion. Intel bought Mobileye for $15.3 billion to enhance its self-driving car technology. On a smaller scale, Avery Dennison acquired Hanita Coatings and invested in smart-glass startup Gauzy earlier in 2017. The list goes on for a wide variety of business categories, technologies, applications, and business relationships.
With so many companies already invested in the Israeli technology network, the key has been to leverage relationships to establish collaborations that will benefit all participants and generate business growth. Since U.S.-based companies have a clear understanding of the innovations that would be most impactful to their long-term success, they simply need to take advantage of the opportunity to find those solutions in Israel.