US municipalities vie for Israeli business

Interest in bringing Israeli technology companies to the US is as strong as evidenced by the number of representatives from American cities in the country this week looking to grab a piece of the pie.

By AVI KRAWITZ
November 8, 2006 07:28
4 minute read.

 
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Interest in bringing Israeli technology companies to the US is as strong as evidenced by the number of representatives from American cities in the country this week looking to grab a piece of the pie. "The Israeli economy has matured and reached a global scale where politics is not significant anymore," Tom Sudow, executive director of the city of Beachwood Chamber of Commerce, and head of a five-person delegation from the state of Ohio told The Jerusalem Post. "It [Israeli technology] has a life of its own now, and we saw that during the war where Israeli companies' growth continued uninterrupted." Sharing that sentiment, Edward Best, a Chicago-based lawyer with Mayer Brown Rowe & Maw and member of a 20-member Chicago delegation currently in the country, said that the large presence of Israeli companies on US stock markets and their stable performance through the month-long war in Lebanon was a major contributing factor to the high level of interest being demonstrated by investors and potential partners in the US. Best added that Warren Buffet's purchase of Iscar Corporation and his visit here shortly after the war received huge play in the US and further boosted interest in the country. "Another factor has been the leadership role Israeli companies were playing in the homeland securities market, which has become a big issue in the US," Best added. While Israel is renowned for being strong in technology but weak in marketing, the numerous delegations in the country for various conferences on circuit this week, feel their respective regions have the suitable facilities and networks to fill that gap and are competing to help local concerns ride the wave of interest to move on to their next level of growth. One such delegation, from Sudow's Beachwood community already has attracted approximately 20 Israeli companies to set up office in the city and is combing its participation in the Prime Minister's Export conference this week with meetings aimed at building on that number. "We are not looking to have Israeli companies relocate, but rather to co-locate - to keep their R&D or headquarters in Israel and expose them to the US market," Sudow said. While shying away from the more traditional model offering tax incentives or grants to companies to set up office in a region, Sudow said that Beachwood has developed a unique model focusing on support and accessibility to its network of specified sectors to lure companies. In so doing, the Beachwood chamber of commerce, with a budget of around $1.1 million funded by the municipality and contributions from the business and academic communities, help suitable Israeli companies develop their business plans and provide them with services ranging from office facilities with full logistical services upon arrival at its business development center, contacts with relevant partners in the area, to social support for their families' integration. It also conducts research to see whether a company would be suited to the region and if it is ready to make the move. In a number of cases, Sudow explained, they have referred a company elsewhere or told them they weren't ready yet, while offering what needs to be done to prepare for the eventual move. The Beachwood delegation will be looking for companies in areas in which the city is strong during the visit and already this week has signed agreements with the GreenTech and Yozmot incubators to exclusively provide strategic services in the US. The group's focus is on the non-hardware based hi-tech, bioscience, non-pharmacology, advanced energy and aerospace sectors - areas where Beachwood is strong in activity. It also has provided opportunities for companies in the plastics and food industries in the past and the chamber has assisted Bank Mizrahi establish banking services in the area and has been involved in other deals. "It was not accidental that Maccabi Tel Aviv played the Cleveland Cavaliers in basketball last month or that the Bat Sheva Dance Company performed in the city the night before," Sudow noted. While the Beachwood delegation, which included Ohio State Representatives, focused on selling their region through the visit, other groups took a somewhat different approach. Chicago's Best explained that the 20 members of the Chicago delegation include company representatives looking for Israeli business partners, venture capitalists seeking attractive investment opportunities and lawyers who offer specialized services to Israeli concerns abroad. He added that Chicago has become an increasingly attractive location for Israeli companies with its strong transportation links, infrastructure and high level business presence. Best said the delegation would be looking most particularly at local homeland security companies and that, in addition to participating as a co-sponsor of the Israel Venture Association conference next week, the group would be meeting with incubator programs at the Haifa Technion and Hebrew University. In its first official delegation to Israel since Delta Airlines started non-stop flights to Israel in March, Tom Glaser president of the American-Israel Chamber of Commerce South East region, said the Atlanta delegation was intentionally spending most of its time in the North. Their visit has a particular focus on the life sciences market here as members seek joint partnerships and investment opportunities in the region.

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