Israel – Fertile Ground for International High Tech Companies

Jerusalem Boardroom #148, December 25, 2010

1.  Eric Schmidt, Google's CEO, Joe Lonsdale, founder of Palo Alto's Palantir and Blumberg Capital invested in Israel's any.Do. Schmidt's investment fund, Innovation Endeavors made six investments so far, two of them in Israel (Globes business daily, Nov. 29, 2010).  The $23BN Broadcom acquired its 7th Israeli company, Sightic Vista (Nov. 26). 

2.  Knowledge@Wharton, the online business journal of the Wharton School (http://knowledge.wharton.upenn.edu/):

"Israel is becoming fertile ground for the likes of Google, [Swiss pharmaceutical multinational] Roche and other companies looking to acquire innovative businesses to add to their portfolios…
Innovation, together with engineering excellence and very quick-to-market production of high-quality products, makes Israel shine...The Israel site has become one of Microsoft's three strategic global development centers since opening in 2006, responsible for much of the new technology which the firm is now known for, such as its free anti-virus software…

Israel has the second largest number of start-ups in the world, after the U.S., and the largest number of Nasdaq-listed companies outside North America…Gideon Argov, president and CEO of Entegris, a Massachusetts-based technology manufacturing company, listed six values he learned while serving in Israel's military that have been crucial to his success in business: clear thinking, resourcefulness, stamina, an ability to improvise, teamwork and leading by doing. 'These are not values you learn at [business schools] and they do not happen through an academic environment. They relate to entrepreneurial success and should be implanted in business,..'

Hundreds of U.S. and Israeli companies have formed partnerships in the last several years, and more are forming every day…These partnerships are mutually beneficial…American companies provide the marketing expertise, while the Israelis handle product development and manufacturing at a lower cost for the Americans…[increasing] jobs in both countries… Access to innovation is the reason that many U.S. companies seek out Israeli partners…Innovation is simply ingrained in the Israeli culture…The innovative impulse comes from Israel's small size and location, which foster a need to be self-reliant…Israel offers high-quality innovativeness in terms of both scientific and technological areas…

In 2006, Akron became the first American city to invest directly in a technology business incubator in Israel. Since Akron's initial $1.5 million investment, 15 Israeli businesses have emerged from the Targetech incubator. Under the terms of the investment, the new businesses have to open offices in Akron while also building an Israeli presence -- and some have already done so. In exchange for its investment, Akron not only gets jobs, but it also receives dividends from the new companies as a part owner…"

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