When you say Israel-US relations, you immediately think of issues of security and diplomacy. These are undoubtedly important, but these relations have many other areas and layers. The economic-business relationship between the countries is of crucial importance to the daily lives of all Americans and Israelis.
So how does a Middle Eastern economy of 10 million people affect a rich economy of 340 million people?
Israel is a source of tremendous and groundbreaking innovation in a wide variety of fields. Sometimes the impact of a single technology is so great and widespread that it changes reality for the individual and the national economy at the same time.
If president-elect Donald Trump wants to create an impact, then immediately after the inauguration he must strengthen innovation ties between Israel and the US.
The main emphasis and effort should be focused on:
- Creating significant incentives for investors, such as “governmental relative add-on investment.” If the investment is successful, then the investor can “buy out” the government’s investment on preferential terms. If the investment fails, then the government loses more than the investor. Another possibility is tax incentives.
- Easing regulation – creating faster routes without renouncing safety, efficiency, ethics, etc. Some processes are delayed for no reason. Shortening them will contribute to a faster and cheaper penetration of new technologies into the American market.
- Encouraging joint investment – American and Israeli joint ventures have a greater chance of success. Venture capital funds and incubators involving investors from both countries can maximize the integration of Israeli R&D together with the principles of the American market.
- Landing pads – Technologies from Israel must pass many hurdles before penetrating the US. Establishing landing pads that include a business, legal, and regulatory framework in the US should be encouraged. Just as there are incubators for technology development, there must be incubators for US business development.
HOW WOULD all this affect the pockets of citizens in Pennsylvania?
Take, for example, a technology that improves the health of herds, or flocks of chickens, and improves mortality rates, or reduces the need for expensive medicines. Another development could guarantee a longer shelf life for fruits and vegetables and save depreciation and loss. Efficient technology for solar energy could lower electricity bills in every home. There are hundreds of other examples.
And what about the impact on the economy of the top deciles?
A review of 500 companies founded by non-American citizens that became unicorns in the US between 1997-2019 reveals an amazing statistic: India leads with 90 companies, and Israel is in second place with 52 unicorns. Canada, Great Britain, China, and Germany are far behind. If you take into account that India is 140 times larger than Israel, you understand that Israel is the leading producer of unicorns in the US.
And apart from economics, does it have other values?
If saving a life is a value, then yes. Hundreds of medical technologies invented and developed in Israel save patients in the US every day. Cyber protection is another example. There are dozens more.
There is a war going on; why invest in companies from Israel?
Because the Israeli innovation scene is alive and kicking. The entrepreneur goes to the battlefield and returns to the laboratory with another new idea. He is someone who knows how to take risks, be a team player, and improvise. He has courage and audacity that is not taught at Harvard or MIT.
The war will end and will be followed by prosperity. The new president will have a tremendous and wonderful opportunity to be responsible for one of the most special and powerful periods of the current century in the field of innovation.
The saying, “It’s the economy, stupid” is no longer true. From now on you have to say, “It’s the technology, you genius.”
The writer is CEO of a business development consulting company, a member of the life-sciences advisory board of the Israel Export Institute, and has served in senior positions in the Israeli health system and as a consultant for UNICEF in Ukraine.