Local News
May 2, 2008
Close Ties
As Israel hits 60, commercial relations with Maryland keep growing.
Maayan Jaffe
Staff Reporter
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Israel and the United States are on different sides of the world. The people speak different languages. They make their purchases with different currencies.
However, Israel and the United States have something other than democracy to bring them together — business, information technology, biotechnology and homeland security, to be specific.
“Those are the areas that are strong in both markets,” said Barry Bogage, executive director of the Maryland/ Israel Development Center. “In these markets, it’s easy to make connections.”
Since 1992, that is what MIDC has been doing, and with soaring success. Currently, according to Mr. Bogage, there are around 30 Israeli businesses working in Maryland. In the 1990s, leading up to the bursting of the tech bubble, there were as many as 40 companies, most of them a product of the work of the MIDC.
The organization — funded largely by the Associated: Jewish Community Federation of Baltimore, with help from the Maryland Department of Business and Economic Development and the Israel Ministry of Industry and Trade — offers a variety of programs ranging from market research and matchmaking to the Maryland/Israel incubator partnership. With the latter, selected Maryland and Israeli incubators agree to provide up to six months free rent to businesses from each other’s communities. In Baltimore, the companies are housed in the downtown Emerging Technology Center.
MIDC’s flagship program, said Mr. Bogage, is MarketReach America, a business development program to advance the U.S. market entry activities of Israeli technology-based companies. The program includes a U.S.-based strategic partnering and investing conference and American market strategy development.
“Israeli companies [that participate in MarketReach] know they will be able to meet with the leading companies they are trying to see, people that would want to license their products, sell them, possibly invest in their companies,” said Mr. Bogage. “Last year, we had about a dozen companies here with fantastic success. About half of the companies got some kind of deal out of participating in the program, an unheard-of success rate.”
Bringing Israeli business to the area is good for the local economy, he explained, for successful companies create jobs. New companies hire staff, set up bank accounts, recruit lawyers and accountants. They use plumbers and other tradespeople.
“From soup to nuts, it is new business opportunities,” said Mr. Bogage.
The Israeli companies get benefits in return. Maryland, said Mr. Bogage, is ranked as the most highly educated and most affluent state in the U.S. He explained the two key things companies look for when deciding whether to enter a new market are employees and customers.
“They need scientific talent, engineers, M.B.A. [master’s of business administration] sales people. Maryland has an abundance of those!” Mr. Bogage said. “If they’re selling high-tech products, biomedical, homeland security, those customers are right here, not the least of which is the federal government and all the local corporations that sell to the federal government.”
Maryland has three major airports, offering access to the entire United States. In addition, it’s socially welcoming, with a large Israeli population and an active Jewish community.
The MIDC Web site boasts 260 local professionals and companies that have gotten involved with the organization.
Mr. Bogage said there’s a reason for that. MIDC is a superb business model, but it also allows a connection to Israel most local Jews don’t generally tap into.
“The business and economic aspect of Israel is an aspect you don’t come across very much in Jewish community activities, which is a shame. I have said to people, ‘What do you do when you wake up in the morning?’ You go to work,” said Mr. Bogage. “That is real life and that is the aspect of Israeli society we deal with. That is where we promote the bond.” n
Israel’s Economy Booming
Israel may only be 60 years old, but its economy, according to Barry Bogage, is ranked in the top 20 worldwide.
“Israel has been recognized globally as a technology innovator and they keep it going through boring times and through crises,” he said.
Since 2003, Israel’s gross domestic product has grown by about 5 percent annually, according to the Central Intelligence Agency World Fact Book. In 2007, the unemployment rate reached 7.6 percent.
“And the trend is in the right direction,” Mr. Bogage said.
The only flaw he sees in the way Israelis do business is their inability to assess the market’s need for the products they are developing.
“I think more often a scientist tinkers with his technology, is enamored with the innovations he has come up with,” said Mr. Bogage, “but has not done a reality check — ‘Is someone willing to pay for this? Is there a market there?’” n
Return Business
While Israelis are busy coming to the United States, Americans are often attempting to get to Israel.
One program, Business IL, is trying to help them. A subsidiary of the Ministry of Absorption, according to business adviser Beni Nativ, it offers loans, land and, most importantly, information to new immigrants and returning Israelis, people who have been out of the country for at least three years.
“The best advice for any business person is to check very carefully the economic atmosphere and make sure there is a need for the service or product he/she wants to offer,” said Mr. Nativ. “We can help because we know the field.”
The process begins through an Internet consultation at tobeinisrael.org . The entrepreneur is then contacted by someone from the center, which is headquartered at the Center for the Advancement of Entrepreneurship in Rishon LeTzion. Ultimately, the business person travels to Israel and sets up shop. This process, however, could take from months to years, Mr. Nativ said.
Business IL, said business consultant Iris Houminer, both improves the economic success rate of new immigrants and bolsters Israel’s economy. She explained American business ethics and models could improve Israeli industries, which with a similar business sense to Americans, are thirsty for expansion.
Moreover, “All the research shows that if you succeed economically then Aliyah is more successful,” she said. “You need to start the business before you get there, so it will already be thriving.”
More than 500 businesses have been opened through the program since it started in 2004.