One week after a new study reported that Israeli founded companies in Massachusetts boosted the state’s economy with $9.3 billion in revenue, a delegation from the administration of Gov. Charlie Baker is traveling to Israel, along with others from the private sector to focus on cybersecurity as well as digital health.
Baker spoke about the delegation at a June 8 event where the report by the New England-Israel Business Council was released. Hundreds of business, academic, government and Jewish community leaders filled a hall at MIT’s Sloan School of Management for the event. Other speakers included U.S. Senator Mo Cowan (retired), Yehuda Yaakov, consul general of Israel to New England, David Goodtree, the report’s author, and Lior Liv, the CEO of Cybereason, an Israeli-founded cybersecurity firm now based in Boston.
When factoring in the impact of spending on goods and services, such as office space, marketing and other business needs, the revenue figure nearly doubled to $18.1 billion, according to the NEIBC white paper. “We’re here to celebrate the enormous ties of Massachusetts and the State of Israel. We’re two small geographies, but together, we have created a powerful partnership,” Cowan said, kicking off the event. Cowan, now chief operating officer at ML Strategies, has traveled to Israel twice, once during his public life and a second time as a private citizen, he said.
At the MIT event, Baker recounted his own personal discovery of the important economic partnership between Israel and Massachusetts during his years as an executive at General Catalyst, a private venture capital firm.
“I’m excited about this trip,” he said, even though he isn’t traveling to Israel, he pointed out.
The relationship between the “big brains” of Massachusetts and Israel in the field of cybersecurity is important not only from the economic development and technological point of view, Baker told the group. “I also think it’s important from a safety and security point of view.”
Baker, a former executive in health care, said he’s especially interested in the delegation’s findings regarding digital health, a field he predicts will help find solutions to health monitoring problems that can lead to improved quality of life for those with chronic conditions, he said.
Some 200 companies employ nearly 9,000 people in Massachusetts, up from some 6,600 three years ago, when the NEIBC released a similar study. Both were written by Goodtree for Stax Inc., a strategic management consulting firm, with support from the Combined Jewish Philanthropies of Greater Boston.
In that time, the revenue from the Israeli-founded companies grew twice as fast as the Massachusetts economy overall and now represents nearly 4 percent of the state’s entire economy.
The news is gloat worthy, proclaimed Yehuda Yaakov, consul general of Israel to New England.
“It’s an amazing source of pride,” he said at the MIT event.
“Israeli-founded companies are a major driver of the [Massachusetts] economy and are bigger than before,” Goodtree told the Journal in a phone conversation.
For Yaakov, there’s more to the numbers than economic success. The overwhelming majority of the companies are not just looking to better the economy but are working towards the betterment of the world, he said, pointing to Desalitech, a globally award-winning water purification company and ReWalk, which creates wearable robotic exoskeleton devices to enable people with spinal cord injuries to walk.
But Goodtree cautioned that competition from other states is fierce. Since 2010, governors from 30 states have brought trade delegations to Israel, the report noted. The chief competitors are New York and Silicon Valley in northern California.
Goodtree said the advantages for Massachusetts are in its stronger talent pool and lower cost of doing business, but this is not known widely enough in Israel. The launch one year ago of El-Al’s non-stop flight between Tel Aviv and Boston has cut down considerably on the travel time, another important factor.
Strong academic connections between Israel and Massachusetts are also fueling the success of this relationship. Each year, nearly 300 Israelis study or do research here, with most at Harvard, MIT, Brandeis, Berklee College of Music and Boston University, according to the report.
Israeli alumni started 30 percent of the Israeli founded companies in the state, Goodtree found.
“The Israel-Massachusetts business relationship started over half a century ago and has grown ever since,” said Dan Trajman, president and CEO of the New England-Israel Business Counci. “Looking towards the future, we can see in the next several years the addition of one hundred Israeli founded companies contributing to the local economy with the support of the innovative ecosystems on both sides of the pond.”