Edny Raz, Economic & Trade Officer at the Israeli Embassy in Washington, shared his views about the business opportunities for U.S. companies in Israel, and some facts U.S. companies should know about Israel before heading to VITTS 2002 in June:
 
VIAB: What are some of the unique advantages Israel holds for U.S. technology companies, especially in the areas of new business opportunities and attracting Israeli investment capital?
 
Raz:  The real advantage of Israel is its vast entrepreneurial capabilities combined with its technological know-how.  Israel has more scientists and engineers per capita than any other country in the world, and one of the highest concentrations of registered patents.    Within this context, high tech and life sciences are Israel's genetic code for success, fostering everything we stand for, including our tremendous creativity and innovation.  At the same time, we lack the natural resources, friendly neighbors and open markets that the U.S. is known for.  It's a perfect match in so many ways.
 
With that said, Israeli companies are seeking to partner with U.S. companies that can take advantage of our incredible R&D capabilities.  In return, we are seeking from U.S. companies not only their scientific and financial resources, but also their incredible capabilities in manufacturing production and marketing, as well as their ability to bring new products into the marketplace.  A good example of this technology transfer was AOL, a U.S. company that acquired ICQ, an Israeli company which created the "Instant Messenger" technology.   AOL in Virginia benefited a great deal through the successful commercialization of an Israeli technological development.
 
I cannot emphasize enough the tremendous potential benefits there are for Israeli companies to work with U.S. companies, especially in the area of obtaining assistance to commercialize their products and services in the U.S. marketplace.   This can take the form of joint ventures, licensing agreements or establishing international marketing headquarters.
 
Turning to capital investments, in the year 2000, Israel had the largest number of startups, second only to the U.S.  In fact, while the U.S. is well known for its Silicon Valley, Israel is well known for its "Silicon Wady."   In 1991, Israel had one investment fund.  In 2000, Israel established more than a hundred funds.  The total amount of foreign investment in 2000 was approximately $11.4 billion, including money spent by the venture community.   In 2000, the breakout in venture funding went to a number of sectors, including approximately 30 percent for Internet startups, 39 percent for telecom-related technologies, 16 percent for software companies, and 8 percent for funding new companies in the life sciences sector.    In 2001, the life sciences industry continued to grow even more.
 
In addition to the venture market, the U.S. and Israeli governments have established a number of  bi-national funds, including the BIRD Foundation, started in 1978, for joint R&D projects, as well as a special fund for joint science and technology efforts.  For example, the BIRD Foundation helps facilitate joint ventures between American and Israeli companies that are trying to develop marketable products, providing up to $1 million in funding for R&D, and up to 50 percent of the development cost. 
 
VIAB:   What about international trade beyond Israel.   What can Israeli companies offer Virginia companies in this area?
 
Raz:  Israel is currently one of the largest gateways for trade with Eastern Europe, and with the former Soviet republics.   Israel is one of only a few countries that have multi-country, free-trade agreements with the U.S. as well as the EEC (European Economic Community), Mexico and Canada.  Israel has strongly invested in bringing new products and services to countries like Russia, Hungary, Poland and the Czech Republic.  Beyond Eastern Europe, Israel can be a vital partner for opening up trade with Arab countries.  As peace becomes a reality, and it may come sooner than people expect, Israel can be a springboard for opening up several key markets, including Jordan, North Africa and the Gulf countries.  In short, a Virginia company can expand its worldwide activities by partnering with the right Israeli companies.