Israeli Technology – A Good American Investment

Israel spends more on research and development than any other member nation in the Organisation for Economic Co-operation and Development (OECD). According to the Israeli government, most of the monies devoted to research and development go to joint-venture investments funds. This financial strategy has worked well. Israel has achieved the highest concentration of scientists and technical specialists in the world, at 145 per 10 thousand people.

Companies associated with computer, communication, and information technology have seen these industries grow at an annual rate of 8% in recent years. Compared to those of other developed nations, Israel’s computer security, video, networking and data management are at the top. In November of 2013, Gary Shapiro, CEO of the Consumer Electronics Association (CEA), wrote in Forbes magazine that the high tech synergy in Israel is “…groundbreaking innovation that is catapulting Israel to global tech prominence.”

American Investment in Israeli Technology

American investment in the Israeli tech sector is not particularly new. In recent years, however, the size of the investments have greatly increased. Lockheed Martin recently teamed up with public and private sector partners to develop new cyber security products to prevent hackers from attacking their information systems. One of Lockheed’s partnerships, with Bynet Data Communications, has produced a new communications center in Beersheva.

Other companies like Facebook, Google, and Amazon.com have also created start-ups in Israel, or acquired small companies that show promise. Google’s recent purchase of Waze, a mapping and navigation tool, for example, was heralded as a major development that further illustrates the partnerships between the two nations.

For the equities investor, Israeli stocks are also very inviting, outperforming most developed markets during the last 15 years. Some of the most well-known American companies like General Electric, and Proctor & Gamble have significantly invested in Israeli equity for decades.

America Benefits from Israeli Technology

Israeli technology, in addition to providing the United States many investment opportunities, also benefits the American citizen. These benefits intersect many areas of people’s lives – often in ways they are not aware of. Few know, for example, that Twitter was developed in Israel. Capsule endoscopy, or a camera-in-a-pill, is an Israeli invention that has improved healthcare, by allowing doctors to detect abnormalities without invasive procedures. Israel also first developed secure online connections to protect people’s financial transactions. And today, solar power in California is seeing increased efficiency due to technology developed by the Israeli company, Brightsource.

The Future of American Investment in Israeli technology

Israeli technology, and those that invest in it will continue to reap the benefits. The technology boom is going strong, with no foreseeable change on the horizon. Of course, U.S. corporations understand this, and will continue to see financial returns on their partnerships with Israeli. Improvements in America’s national security, healthcare, communications, and alternative energy development are additional arguments for the ongoing investment. Cooperation between the two countries is long standing, and it can only continue to be an asset.

Israeli tech companies which benefit from US Investment

Israeli technology companies have attracted investors from all over the world, including the United States right from the Silicon Valley. Companies such as 3M, Intel, IBM, GE, Google, Oracle, US Robotics, Motorola, Cisco Systems and Microsoft to name just a few, have greatly benefited from Israeli Hi-Tech companies. The Israeli Hi-Tech market is only second to Silicon Valley in California, a place known world-wide for innovation and cutting edge technology.
Israeli companies are comprised of usually small start-up companies that focus on R&D, innovation and being able to build and design components that are faster and better, like a better switch or a faster circuit. This is important to the giant companies as these companies often have little time for the constant upgrades necessary in being able to stay cutting edge, so they tend to outsource these areas of their technology.
The population ratio of engineers and scientists in Israel is number one in the world, whereas the United States is number two in this area. This gives Israel a rich source of qualified people to run and develop small start-up technological companies that play a critical role in today’s Hi-Tech marketplace. And Israeli technology is in every facet of Hi-Tech, such as; materials, medical, medical engineering, printing, software information, software retrieval, software technologies and tools, vehicle accessories, sport and safety, incubators, biotechnology, broadcasting, CAD/CAM, equipment, control testing and security technology, chemicals, pharmaceuticals, communications equipment and software, data collection, ecology, education, machinery, laser systems, food and cosmetics, optics, and semiconductors just to name a few.
Investment in Israeli start-up companies in these fields are often done by the global industry giants, and sometimes result in taking small fledgling entrepreneurs into the international mainstream. And Israeli company core people tend to remain with their companies once acquired. These investments are also completely independent of momentary regional unrest but are based instead on the entire global economy. For example, Intel’s billion dollar plus investment was totally unaffected by the Gulf War. Israel’s market is global, not domestic.
A further example of Israeli companies who work with some of the industry giants are the Israeli firm Elscint with General Electric Healthcare, PrimeSense with Apple, DCPC with Intel, CDP Medical with Phillips Electronics and YaData with Microsoft. Israeli companies are not usually set up for mass production but fill a critical need in improving the overall products of these large giant companies, as well as providing specialty products. Japanese cellular phone manufacturing use microchips developed by the Israeli company DSPC. Northern Telecom uses technology derived from Telrad, which is another small Israeli technology company.
Investing in the Israeli technology market has proven to be a smart investment because of Israel’s extremely rich pool of engineers and scientists that have started and successfully formed partnerships with some of the largest technological giants in the industry. And this trend will only continue, as Israeli technology is on the cutting edge of the Hi-Tech global marketplace of today.

US Venture Capitol Investment in Israeli High Technology

Venture capital companies are the life blood of new invention and innovation in the economy. They provide start up capital to fund prototyping and development of new technology. There are hundreds of venture capital firms in the United States which operate by attracting investment in risky new ventures and hope for high rates of return.

The Wikipedia list of American Venture Capitol firms includes 81 pages of companies, most of which have high technology portfolios.

Bloomberg LP, headed by former New York mayor, Michael Bloomberg is a well-known venture capitol organization that specializes in broadcasting, financial software and data management. Gates Capital Partners is another well-known firm headed by Microsoft founder, Bill Gates. Gates specializes in start up investment in high tech start-ups. Khosla Ventures is an example of a less well known company providing venture capitol to start-ups in bio-fuels, bio-plastics, and alternative energy. Shasta Investors is a venture capitol firm investing in consumer messaging software and consumer space technology. Greylock Partners invests in wireless networking technology and computer data centers.

Many such venture capitol firms make major investments in Israeli high technology. The high technology sector in Israel (nicknamed Silicon Wadi) is second only to the United States in terms of growth potential. Israel has the highest proportion of engineers and technicians per capita in the world. The Jewish state developed its high tech capacity when thousands of technically trained professionals immigrated out of the Soviet Union and Europe over the last 50 years.

Investment in Israeli high technology comes from stock market investment. Currently, 150 Israeli firms are listed on the New York Stock Exchange, 63 Israeli high technology companies are listed on the NASDAQ. Individual venture capitalists also make major investment in the Israeli high technology sector. Warren Buffett is typical of venture capital investors who often touts his investment in Israeli start-ups to the world. Bill Gates has made major investments in Israeli high technology. Canaan Partners have offices in Herzelia, Israel. Greylock Partners also has a branch in Israel. Major US high technology companies have offices and branches in Israel. These include Google, Apple, Intel, HP, Siemens, GE, Lucent Technologies, CISCO, and IBM among many others.

The Israeli government offers many tax incentives to venture capital investment in Israel. The State of Israel offers conditional grants of up to 24% of tangible fixed assets. Tax laws have allowed relief from taxes and tax reductions to increase foreign investment in high technology start-up companies through the recently passed “Law for the Encouragement of Capitol Investments.”

Inventions that come out of Silicon Wadi companies have been of great benefit to the world and advanced the fortunes of those American companies which have partnered with them. Currently, an Israeli high technology company is constructing one of the world’s largest desalinization facilities in California. Israeli companies have made major contributions to software and hardware development as well as high technology weapons development and agricultural technologies.

In addition, investment in Israeli high technology has paid high financial dividends, many companies have shown investment returns of 10% or higher in recent years.

Israel is one of the safest places in the world to make venture capitol investments according to Warren Buffet and others. Israel boasts a well-developed transportation system with modern international gateways, strong intellectual property protection for patents and trademarks, a transparent banking system, and an advanced legal system based on common and corporate law.

Technologies that investment firms prefer

Israel is a country that has contributed quite a bit to the world when it comes to science and technology. They have the highest amount of both people and funds in the world dedicated to discovering and using new technologies. Plus, they are fourth in the world when it comes to the number of scientific publications. Overall they have almost twice as many scientists, engineers and technicians than the US.

Israel and its scientists are heavily involved in advancing all sorts of technologies like agriculture, computer science, medical, electronics, alternative energies, genetics, optics, and more. That’s why there are many companies in the US and the world that are investing in Israeli technical companies.

Why invest in Israel?

There are several reasons why companies are investing in Israel tech companies. Some are investing billions of dollars. Reasons include:

Smart investors desire international exposure—they realize that Israel is a country that attracts many investors and earns great returns in several markets.

Investors know that Israel is strong economically – Compared to some other countries, Israel is good market to invest in. For one thing, it helps investors have a hedge against possible weakening of their own currencies.

It shows that Israel is important as a country – It helps show that you believe in Israel as a country and in its accomplishments.

Companies with investments in Israel

There are several US countries that have invested in Israel in the field of technical and scientific accomplishments. These include Contendo, a web services company that has been investing in Israel for several years. Contendo shows the success of high tech items in Israel because it works to make the Internet run faster.

GE also has invested in Israel in the area of water technology in the Emefcy Ltd company, a business that turns waste water into energy sources. This can benefit the US and other places because it created electricity and also changes waste water into a process that cuts down on carbon intensive processes and is a greener method. GE has also built a research and development center in Israel as part of its investment process.

Israeli has many benefits for the US

When it comes to partnerships between the US and Israel, they have given the US great contributions such as contributing to their national interests, as well as the fields of counter terrorism, intelligence and urban warfare. The military and homeland security owe a lot to Israeli technology.

This support also includes things like new techniques of airport screening, tactical radar systems, unmanned drones, short range rockets, and robotics. All of these types of technology have been shared with the US from Israel sources.

All in all, science and technology are both very important fields and they can bring many advantages to both investors and the people that benefit from their innovative and new forms of processes and ways to save energy, etc. This means that the US and other places will continue to invest in Israeli technology for years to come.

Best Companies that Invest in Tech

Over the years, there has been much speculation about investing in technology and the existence of mobile, social, and computer data that will change the future of the world. Many well known as well as new enterprises are investing in technology for the sake of increasing revenue of their businesses. What this means is that many companies are compiling money together or getting ready to go viral with what ventures they have going on. This new movement made by many of the top companies is a good idea, but all capitalist are not the same and regardless of the popularity that is being gained of technology investors that specialize in technology are pretty hard to come by.
Starting with one of the leading most popular companies, Google in 2008 joined alongside its corporate development team which is designed to handle mergers and questions to invest in companies like Clear Story Data, Duo Security, and Puppet Labs too. Google has hired a professional in place and he has worked at Intel as product manager for the Pentium processor. Peter Fenton known for help in backing up Twitter and Yelp has helped orchestrate Wily Technology and IBM’s Core Metrics. The world’s largest IPO ever for an internet company valued at $104 billion, Facebook is far ahead of the competition. Most ventures such as Marc Andreessen, Peter Thiel, and many others provide awesome returns to their partners such as Google and IBM.
Many big name companies are now starting to invest in Israeli technology and spending billions of dollars on large deals and shaping the country’s level of success. There has been a whopping $4 billion spent on Israeli technology firms since the last two years. This number is definitely over $10 billion because this only represents the public deals not the private ones. Some of the companies that are investing in Israeli tech include, Facebook, Apple, and Microsoft. Google as well as IBM has also ventured on public investments in Israel. It has been said that the Middle East nation has a big role in developing a country of risk-taking business. The secret in Israeli’s success in targeting these top brand technology companies is that most people in that country are required to join the army or military after high school which exposes them to the most advanced technology and high tech communication. In the early 90′s it developed millions of dollars in order to properly invest in Israeli startup businesses with America and Europe. he the government offers tax breaks, it usually helps the country with private investors and their exposure with United States investors. The relationship between the U.S. and Israel should continue because they share common strategic interests and the two have never publicly discuss details of their security relationship. This type of relationship makes it easier for spectators not to think of Israel as an asset.

How Israeli tech companies differ from US companies

While it might surprise some, Tel Aviv in Israel is the second largest city in the world (second to Silicon Valley) i terms of the number of technical companies starting up. There are many different reasons behind this, and while the companies are still in their early stages, many of these companies have become desirable investments by larger firms in the United States and Europe. All of this is pointing towards a valuable investment opportunity and is a trend that is likely to continue.

In the early 1990s, the Israeli government provided funding of over $220 million for investing in startup companies throughout the region. This allowed individuals who were fresh out of tech colleges, many of which are based in Israel, the ability to start building their own companies and software. Additionally, American and European firms started to invest in these smaller companies, allowing them to develop their ideas. In fact, Microsoft has spent about $14 billion in the region on improving the startups over the last two years alone.

One of the reasons that Tel Aviv has been able to develop such a large number of tech start ups (outside of the financial offering provided by the government) is the outstanding public educational system and higher college offerings in the nation. The colleges found in Tel Aviv and around Israel are some of the best in the entire region, allowing individuals who are looking towards tech to obtain upper level degrees. In order to retain these professionals and keep them working inside of Israel, instead of them leaving for Europe, Asia or North America, the government set forth that investment.

In terms of the difference between Israeli and US companies, there are some slight variations, but ultimately, there isn’t all that much different between the two nations. The vast majority of tech companies in Tel Aviv are on the smaller side and are considered startups, which might mean they only have a handful of employees (but are still able to output quality hardware and software). In the United States, there also are a large number of startup companies, but the majority of the focus in the states goes to the larger companies such as IBM, Apple and Microsoft.

Microsoft is the largest player in the region and has gone on to purchase many of these startups for its own use. In this way, the Israeli companies have benefited the American based firms as they provide the means of new ideas that have not yet been completely rendered yet, or upgrades to current technology in order to make it better.

It is important for tech investors to continue to invest in Israeli tech companies. As of right now, it is a hot bed of talent, as the majority of tech graduates remain in the area. While this could possible change in the future, depending how the technology changes (the world of tech is always evolving, so there might be other regions of the world that decided to do what Israel did and invest large amounts of money to keep graduates in the area), as of right now and for the foreseeable future, Tel Aviv is going to remain an important player in the development and customization of new programs and software, making it vital for the larger companies to remain looking at these small businesses and continue to invest in the products at hand.