Israel Innovation 2.0

A recent study by Stax Inc, an independent global strategy consulting firm, has found that deals between Massachusetts and Israeli companies bring in $2.4 billion. The study looked at the contribution of close to 100 companies in Massachusetts that are founded by Israelis or offer products based on Israeli technology.

Some highlights of the study are:

• In total, the direct and indirect revenue impact on the Massachusetts economy was $7.8 billion.
• From an employment perspective, these businesses directly generated 5,920 jobs in Massachusetts.
• 50% of these businesses focus on information technology, 29% are in life sciences, and the remainder in other industries.
• Israeli entrepreneurs chose Massachusetts over other U.S. destinations to launch or grow their enterprises due to the deep talent pool of educated workers, the opportunity to be part of an industry cluster, world class universities and outstanding business infrastructure.

According to Ted Carr, Executive Director of the Massachusetts Office of International Trade and Investment, “The Commonwealth is a natural destination for Israeli innovators and entrepreneurs, due to our common focus on the life sciences, technology, and clean tech industries, as well as our shared commitment to outstanding universities and highly-skilled workforces. The many Israeli companies that have successfully established in Massachusetts are evidence of the strong relationship that exists between our two regions. We look forward to the continued growth of this relationship in the future.”

The study also found that other states are pursuing linkages with Israeli businesses. A delegation from Oregon led by Governor Ted Kulongoski is expected in Israel later this month to scope out partnership opportunities. Many state efforts have been facilitated by their local chambers of commerce. The chambers of commerce, including the southeast region and Texas, actively promote and facilitate business between Israel and American companies. Some of the most successful events for increasing business have been The Israel Conference and the IsraelWeb Tour in California.

The Massachusetts study was partly commissioned by the Combined Jewish Philanthropies. Israel’s Ministry of Finance should look at this and commission a full study of the contribution of Israel-related business to the American economy next.

During the past week, 8 Israeli companies made the “Global Cleantech 100″ Guardian List, including Emefcy, GreenRoad and TaKaDu. VC funding of Israeli companies was up in Q3, though not in early stage companies and not from Israeli VCs, and Qualcomm announced it bought iSkoot. For these stories and more, see this week’s headlines below.

Cleantech
1. 8 Israeli Companies Make “Global Cleantech 100″ Guardian List

2. Israeli solar water heater producer enters US market

Investment
3. More venture capital flows to Israeli cos

4. Israel’s Internet Scene Comes of Age

5. MySuperMarket Raises $7.4 Million, Won’t Be The New WebVan

6. Qualcomm Subsidiary Buys iSkoot, Which “Mobilizes Internet Services”

7. Italy now Israel’s 2nd largest trading partner in sci-tech

Information Technology
8. NYTimes.com Implements Taboola’s Video Ranking System

9. Wibiya launches a platform and API for their popular toolbar

10. Qualcomm buys iSkoot. Three points to take away from it.

11. Seeking Alpha launches investment app store

Miscellaneous
12. Training girls to narrow the gender gap

During the week of April 18, 2010, Wibiya announced that it raised $2 million for its customizable web-based toolbars. Forbes magazine named Israel’s Shari Arison, founder of Miya, one of the world’s greenest billionaires and Testuff released a Mac version of its test management software. For these stories and more, see this week’s 11 Israel-related headlines below.

Cleantech
1. 10 reasons Israel is a cleantech leader

2. Israeli researchers develop small, lightweight hydrogen storage tech

3. Israel’s greenest billionaire

4. Israel’s TaKaDu Goes After the Other Grid: Water

Investment and Economy
5. ‘The idea was to use the crisis to strengthen the economy’

6. Trade pact with Israel to give foothold in West Asia

7. Wibiya Raises $2 Million For Customizable Web-Based Toolbars

Information Technology
8. Testuff Launches a Mac Version of its On-Demand Test Management Service

9. Trusteer detects new Zeus (Zbot) password stealing Trojan

Miscellaneous
10. TAU professor tips off US over security flaw in e-passports

11. Israel Reverses iPad Ban

During the week of October 25, 2009, Deloitte named its Fast 50 for the Israel region, listing PicScout #4 with a growth rate the past year of 3277%. 15 UK-Israeli science projects received research grants from The British Council totaling £365,000 and cyber crimes, which have become a national priority for Israel, the U.S. and the U.K. among other, will likely target mobile devices in 2010. For these stories and more, check out this week’s technology headlines below.

Cleantech
1. 7 Solar Innovators From Israel That Could Fuel Our Planet

2. Eilat-Eilot region seeks to become center for renewable energy

3. ‘Going Green’ would boost economy – environment minister

Investments
4. International venture capital investment recovers after second quarter slump

5. 15 UK-Israeli Science Projects Get Funded by The British Council

Information Technology
6. PicScout Recognized Among Fastest Growing Companies

7. Cyber criminals to target mobile devices

8. Secure computers aren’t so secure

9. Digital World: The hackers of tomorrow – today

Miscellaneous
10. Chief Scientist: Israel leads in research investment

11. Red Bend sues Google over patent dispute

During the week of October 18, 2009, 70 countries gathered to standardize electric car chargers. The decline in venture capital investments in Israel during the third quarter was analyzed as was the mark Israel is leaving on Information Technology software, specifically as relates to security. For these stories and more, check out the headlines from the week of October 18, 2009 below.

Cleantech
70 countries gather in TA to standardize electric car chargers

Innowattech Proves It Can Collect Energy From Highways and Byways

Investment
Can VC succeed in cleantech?

IVC Report: VC Investments in Israeli Companies Decline 50% in Q3

Information Technology
Israel carves a niche in IT security

Tools for Semantic Targeting (Peer39)

WordPress.com automates PicApp images for bloggers

Miscellaneous
Facing Tomorrow tech exhibition focuses on Israeli brain power

Israelis working to save endangered species through cloning

When Big Blue was a start-up

According to The New York Times environment blog,

“BrightSource Energy has broken ground on a 29-megawatt solar steam plant at a Chevron oil field in Coalinga, Calif.”

The move is a great for both companies. For Chevron, which, along with competitors BP and StatoilHydro, is an investor,

“a solar power plant builder based in Oakland, Calif., and solar-powered oil extraction offers the oil giant an opportunity to reduce its carbon footprint while gaining a hedge against volatile natural gas prices.”

While, BrightSource, which has signed other significant contracts in California this year, will have the chance “to scale up its technology” and “explore new applications for its technology.”

It’s important to note that the field won’t be powered by solar steam exclusively. As it only works when the sun is out, the field will still use rely on previous sources for  power at other times.

During the week of July 5, 2009, it was announced that NASA and Israel’s Seambiotic will be researching and developing algae for use as a possible aviation fuel. Discussion continued on N-Trig’s planned 2010 IPO and the company’s latest developments and IBM Haifa researchers revealed new data-masking technology that filters sensitive data from unauthorized viewers on the fly. For these stories and more, check below for the full 10 Israel-related headlines from this past week.

Cleantech
1. How Terra Venture Partners Accelerate Clean Technology

2. Israel’s Bright Sparks Invent ‘Electric’ Road

3. Israeli company, NASA to work together on bio-fuel project

Investment
4. Israel’s N-trig: New touch technology bolsters IPO

5. Investing in Israel

Information Technology
6. International TechneGroup acquires software firm

7. IBM To Patent Data Mask

8. RADVISION Receives 2008 Communications Solutions Product of the Year Award from TMC

Miscellaneous
9. ‘Degradable’ plastic bags are no such thing, claim experts

10. The oldest hotel in Tel Aviv [video]

During the week of April 5, 2009, some of the biggest headlines were about N-Trig’s planning an IPO for late 2010 and Evergreen, a venture capital fund, raising more for its fourth round. Other news included Google’s latest release, Google Suggest, which was developed by Google Israel and Microsoft’s plans to lay off most of 3DV’s 40 workers (all in Israel) when the sale is complete. In the IT sector, Xeround’s Charlotte Yarkuni discussed cloud computing and databases and WorkLight’s recent media blitz continued. For these stories and more, see below for the full 13 Israel-related headlines from the week of April 5, 2009.

Cleantech
1. Revolutionary Energy Source Harnessed: Ordinary Walking and Driving Pressures

2. New water splitting technology created

Investments, M&A and Economy
3. ClickSoftware to Acquire Assets of Manchitra Services

4. Israel’s N-trig eyes Nasdaq IPO in late 2010

5. Evergreen raises more for fourth fund

6. Microsoft’s 3DV acquisition a go

Information Technology

7. Xeround’s Yarkoni talks about the cloud, databases and more

8. uTest Defines the Future of Quality Assurance:CEO Interview

9. WorkLight Brings Social Security to the Enterprise

Miscellaneous
10. Google service developed in Israel launched

11. Topify – An Essential Twitter Timesaver

12. Dark Days in Israel’s Tech Sector Drive Rising Executive to the Exit

13. Lightning Warns of Hurricanes’ Most Intense Moments?

During the week of March 22, 2009, it was announced that Israel will share its farming technology with Kenya and more details of the government’s water technology initiative, NEWTech were given. The sale of Aladdin Knowledge to Vector Capital was completed with the news that Aladdin and SafeNet were under common management and information security company, Tufin, added new features to its firewall management platform. Facebook became even more stalkerish with a new photo facial recoginition and tagging application by Israel-based Face.com and SEO guru, Barry Schwartz shared what he found Israeli SEMs are looking for. These stories are only some of the main ones that made it into the media last week. For links to these and the rest of the stories from the week of March 22, 2009, check below. 

Cleantech and Environment

1. Israel NEWTech, A Government Initiative To Promote And Grow Israeli Water Technology And Innovation

2. Israel to share farming technology with Kenya

Investment and M&A

3. Value of Israeli high-tech M&A fell 19 percent in 2008

4. Funded: GoViral, BriefCam, Extreme Reach (BriefCam)

5. SafeNet, Aladdin Knowledge Under Common Mgmt

Information Technology

6. HP to Provide Compaq My Bhasha with its Desktops

7. New Cyber-Ark controller clocks all super-user activity

8. SkillIQ is set to Revolutionize the Human Resources World

9. Dell Certifies Aternity as ISV Partner

10. Tufin adds white lists to firewall management platform

Miscellaneous

11. Israel’s Explay helps you see the big picture

12. First Look: Photo Finder facial recognition app for Facebook

13. Drops in the bucket

14. Partnerships between Florida, Israel are key

15. What Israeli SEMs Want

Bonus: TechCrunch’s Sarah Lacy in Israel and reactions. 

Sarah Lacy, August 2008

Last week Twitter and the Web erupted when the newest member of the TechCrunch team, Sarah Lacy, posted that Israeli entrepreneurs lost their mojo and that investing in Israel was overhyped. Here are are just some of the responses to Lacy’s post as well as her post and its follow up. 

Now that China Is the New Israel…What’s Israel? (TC)

What’s behind Sarah Lacy trash talking the Israeli VC scene

Israel is the new Israel (Israel Innovation 2.0 response)

Israel Hype Cycle

Sarah Lacy, David Li and the Wrong Side of Historical Performance

Risk Aversion And The Perils Of Selling Too Early (Israeli Startups, Part II) (TC)

Twitter responds

Sarah Lacy over at TechCrunch posted today that Israeli entrepreneurs post-bubble have lost their mojo and VC funding has reflected that. There has been a lot of reaction to her post in the comments section and off the site, but it is really much more complex and wide-ranging than a post on TechCrunch or even here on Israel Innovation 2.0 can handle. I think that Sarah is both right and, of course, wrong.  

She is right that the crop of Israeli IT and Web startups are disappointing when compared to Check Point and ICQ from the 1990s. There have been many theories, denials and other responses of the lack of companies of this caliber in the past few years and I have to say, when researching these different companies, there definitely is a difference. 

The theories for this that I believe and have often mentioned (sorry to anyone familiar with those posts) are the ones Daniel Cohen of Gemini Israel Funds wrote about in an article on Venture Beat back in the fall of 2007: “Entrepreneurs want to retire with $3-$4M, Impatience of investors, ‘Think small’ mentality and The lack of $1bn experience.” Add to these reasons the brain drain of top engineers and entrepreneurs and relocating the company outside of Israel and Lacy has a very good point. 

Fortunately though, Lacy’s post on TechCrunch was only fulfilling a certain agenda and only relevant for the IT and Web 2.0 sectors which TechCrunch covers. No matter what happens with Israeli IT companies in the future (and I believe Israeli SaaS and security companies, such as Clarizen, Imperva and Trusteer all have a lot of potential), Israel is almost guaranteed to be the main player beyond this in the next tech revolution, clean technology. 

A lot of VC funding has gone into cleantech companies in wastewater management, solar energy and wind energy that won’t mature and really show its worth for another few years. In addition, there is a noticeable trend over the past year of people from Israel’s IT sector considering and heading into cleantech.

So, where does China fit into cleantech? I haven’t researched it to say, but on the Israel end I know that China, along with several other Asian countries, countries in Africa and Australia have all expressed interest in Israel’s innovations especially to deal with water conservation management and solar energy. If in relation to Lacy’s article, China is getting more investments in IT (the greatest tech sector in the past) in comparison to Israel but not in relation to cleantech (the likely greatest tech sector in the future), the answer to Lacy’s question about “If China is the new Israel..” would really be that Israel is the new Israel.