In the middle of one of the toughest neighborhoods in the world, Israel has emerged as the world’s leader in start-ups and innovation.
As part of the US-Israel Business Initiative, an effort run by the US Chamber of Commerce, I was one of 15 state and regional chamber leaders who participated in the Initiative’s inaugural visit to Israel earlier this month, focused on strengthening commercial ties between Israel and the US. US Chamber Executive Vice President and Head of International Affairs Myron Brilliant oversees the program and serves as a sort secretary of state for the US private sector. Mr. Brilliant – along with the day-to-day management of Josh Kram – lived up to his name with this trip, which was first class in content. Myron and Josh’s goal is to host 200 major business groups from the 50 states over the next three years, and I am confident they’ll hit that mark.
I was proud to represent Arizona on the trip, which was covered by the Jerusalem Post, one of Israel’s major dailies. Our state has earned a level of notoriety and respect in Israel that not all states can match.
Governor Doug Ducey was the first sitting Arizona governor to visit Israel, giving a keynote at WATEC in 2015, one of the world’s most prominent water management conferences, and he participated in a US Chamber-sponsored water conference on US-Israel water technology. The governor also championed model anti-BDS legislation at a state level, which is now Arizona law. The BDS movement, which attempts to pressure institutions to boycott, divest from and sanction Israel, deserves to be soundly rejected. Our friends in Israel truly appreciate the governor and Legislature’s actions and show of solidarity.
The trip’s focus on entrepreneurism and innovation represented a pivot of sorts. Israel and the US have had a longstanding, deep relationship on military affairs that has grown under Republican and Democratic administrations alike. Now the bonds are strengthening in new market sectors.
The numbers around Israel’s success in tech are startling.
Israel on a per-capita basis is tops in research and development spending as a percentage of its economy, has more companies listed on the NASDAQ than any other foreign country and, not surprisingly, the start-up-nation is far and away the per-capita start-up leader.
Israel is also home to about 300 multinational R&D centers, of which about two-thirds are US based.
Members of our delegation met with the minister of the economy, a number of members of the Israeli Congress (Knesset), and the mayor of Or Akiva.
We also met with prominent business leaders in water, like irrigation innovator Netafim, pharmaceuticals manufacturer Teva, as well as the chair of the Israel-America Chamber of Commerce, Ofra Strauss. We also met with key officials of the Manufacturers Association of Israel, the country’s most powerful industry trade group.
For the US-Israel relationship, the name of the game now is to develop the innovation economy. There’s a reliable structure in place to make that happen.
The first free trade agreement the US ever signed was with Israel back in 1985. Both countries have won under the agreement, with buyers and sellers now linked in tariff-free transactions that have led to binational economic prosperity. As the US, Canada, and Mexico set to begin talks on a modernization of the North American Free Trade Agreement, it would be wise to remember that countries don’t typically pursue free trade agreements with their enemies. Trade has a way of strengthening diplomatic ties, solidifying common values like the representative democracy and the rule of law.
An absolute must read for anyone interested in Israel’s path to prosperity is Start-up Nation: The Story of Israel’s Economic Miracle. Now translated into 30 languages, it’s one of the most important books written in a generation, examining how a small, young country with no natural resources has turned into an innovation powerhouse.
Our group heard from the book’s co-author, Saul Singer, on the trip and discussed the core ingredients of Israel’s success: its military, which offers a sort of vocational educational on steroids; immigration, which welcomes Russians and others; a culture of risk that makes it okay to fail; and a higher education system that puts an emphasis on science, technology, engineering and mathematics.
We also met with innovative venture capitalist, Jon Medved, and the leader of The Bridge, a creative platform for start-ups spearheaded by Coca Cola that provides valuable mentoring services to businesses poised for growth.
We also visited one of the top graduate institutions in the world, the Weizmann Institute of Science.
The key takeaway from the trip is that Arizona and other states have much to gain by bolstering trading ties with Israel. There may also be policies to copy. Credit Gov. Ducey who recognized the potential benefits of a strong Arizona-Israel relationship early in his tenure.
For Arizona, water stewardship, cyber and military technology will be fertile areas for years to come. We don’t have to reinvent the wheel, though. Israel has made major strides in all of these areas, and it’s willing to teach others. Arizona has a thing or two to teach, too. We’re natural partners, and it will be exciting to watch where this relationship goes and grows.