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.