Germany seeks Israeli technology

Israeli companies and startups are now being invited to partake in the economic boom in North Rhine-Westphalia.

February 27, 2017 10:47
2 minute read.

Dusseldorf. (photo credit: GREGOR CIECOR/WIKIMEDIA COMMONS)


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The North Rhine-Westphalia Economic Development Agency (NRW) will visit Israel next month looking for new technologies.

North Rhine-Westphalia's GDP totaled €645 billion in 2015, more than the GDP of entire countries like Switzerland, Saudi Arabia, and Argentina, and making it the wealthiest state in Germany. Many companies from all over the world have recognized the opportunity, and are doing business there. Foreign investment in Westphalia totaled €190 billion in 2015, more than in any other German state. 18,000 international companies are already operating there, and the number is projected to grow in the coming years. Israeli companies and startups are now also being invited to partake of this huge bonanza.

The North Rhine-Westphalia Economic Development Agency (NRW) will visit Israel next month in order to take part in the annual Axis Tel Aviv conference, where investors, funds, and leading global companies can meet directly with Israeli startups and entrepreneurs. The NRW representatives' goal is obvious: to encourage Israeli entrepreneurs to add Dusseldorf, Cologne, Dortmund, and Essen to their list of markets.

"The opportunity to meet with the economic leadership of one of the world's leading business regions is sometimes all that is needed, especially when they want and are ready to break through," explains Axis Innovation CEO Ed Frank, whom many entrepreneurs rely on to point to the world's next hot markets. After China, South Korea, and even Russia and Poland, Israeli startups are aiming at regions that are hungry for foreign technologies where competition is less intense. "Although Berlin and Munich are probably the first cities that come to Israelis' minds when they think of Germany, economically speaking, the strongest state is North-Rhine Westphalia, considered the most industrialized, populous, and wealthiest region in West Germany, from which its importance is derived," says Frank.

It is logical for an Israeli entrepreneur seeking a foothold in Germany to turn to major companies with which he is familiar, such as SAP, Siemens, and Adidas. He should know, however, that one of the secrets of German industrial growth, and that of North-Rhine Westphalia in particular is its foundation of small and medium-sized companies. 3.5 million companies in Germany, 99.7% of all companies there, are categorized as "mittelstand" (small and medium-sized businesses), and more than 80% of them have at most 10 employees. The top tier of these companies employs 500 employees each, and their annual revenues is at most €50 million, far below the billions of the giant corporation.

"In all probability, you have never heard the names of these companies, but they constitute the backbone and economic engine of Europe's strongest country. The wide range of products they produce are used and integrated in many industries in innumerable products, tools, and projects sold in Germany, Europe, and throughout the world," Frank points out. "As entrepreneurs, we frequently tend to dream about getting an investment or strategic cooperation with huge multinational companies, mostly from the US, but the chances of this are low, and the competition is fierce. Thanks to the bustling economic activity in the region, many companies are able to fit in with the economic activity and business of small and medium-sized German companies seeking to keep themselves up-to-date, innovative, and leaders in their field, even though they do not grow to the huge dimensions of the world's best-known super brands, such as Google or Apple, most of which grew in the US."

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