Israel and the U.S. Share Technology & Innovation

February 23, 2012  

In 1985, the United States and Israel signed America’s first Free Trade Agreement. Trade between the two allies has since grown by 500 percent, and more than $78 million worth of goods and services are exchanged each day. U.S. and Israeli businesses, researchers and academics are finding new opportunities for investment and collaboration and many top American tech firms such as Intel, Microsoft and Google have opened headquarters in the Jewish state for research and development.

The United States and Israel share a culture of innovation. American heavyweights such as Intel, Motorola and Google have capitalized on Israel’s entrepreneurial spirit and worldclass talent pool, establishing major R&D centers throughout the country. With the most Ph.D.s and published scientific papers per capita in the world, Israel has become the preeminent foreign outpost for computer technology, telecommunications and software industries, with roughly 100 U.S. companies active in Israel. More Israeli companies are traded on the NASDAQ than any country outside the United States and China.

In 2006, esteemed investor Warren Buffet’s Berkshire Hathaway made its first-ever foreign acquisition, buying 80 percent of Iscar, an Israeli maker of precision blades and drills. When asked the reason for his interest in Israel—which, only weeks earlier, had fought a war with Hizballah in Lebanon—Buffet’s response pointed to the spirit that marks the economic drive of both the United States and Israel: “[Israel] had no advantages 50 years ago…. What they brought was brains and energy and look how it paid off…. They are the best that I’ve seen.”

Israeli Businesses Invest Heavily in U.S. Economy

Israeli companies have increasingly looked to opportunities in the United States, investing more than $50 billion between 2000 and 2009. Israel is among the top 20 suppliers of direct investment into the United States. In fact, Israelis invested more than $7 billion in 2009 alone. This sum marked an increase in U.S.-directed investment immediately following the global financial crisis, when many throughout the world were looking inward.

Trade delegations from Colorado, Ohio and Connecticut, among others, have visited Israel to strengthen ties. States such as Virginia and Maryland have established offices at home to help bring Israeli companies to their communities.

Twenty U.S. states maintain offices in Israel, and Ohio’s Department of Development Tel Aviv office provides a strong example of the benefits that such trade can yield. In 2007, the office helped bring 20 Israeli companies to the Cleveland suburbs, creating stable, highpaying jobs in the local economy.

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