US Investors, Manufacturers Flock to Israel (06/2020)
A sharp rise was seen in foreign direct investment and production across all sectors
Israel’s economy is booming amid a spike in foreign direct investment and significant growth in advanced manufacturing.
American investors and multinational companies continue to be the most significant foreign players in the Israeli business arena, accounting for the lion’s share of capital flow, Ziva Eger, chief executive of the Foreign Investments and Industrial Cooperation Authority at the Israeli Economy Ministry, told The Media Line.
Moreover, Israel has seen a steep rise in production in recent years, with more than half of advanced manufacturing multinational corporations operating in the country having entered between 2008 and 2018.
“We have more than 250 multinationals from America,” said Eger, who also heads Invest in Israel, the Economy Ministry’s arm tasked with helping foreign investors.
“Most of them are here doing production and R&D [Research and Development] in all the sectors. [Americans] have always been the majority because they’re our partners in defence, in the automotive industry and in life sciences, etc,” she said.

Screenshot from a video produced by Invest in Israel that highlights some of the MNCs across the country. (Invest in Israel)
According to the Tel Aviv-based IVC Research Center, American investment accounted for 35% of the capital raised by Israeli companies in 2013-2018. Invest in Israel, meanwhile, reported that Israel finished 2018 with almost $22 billion in foreign direct investment and currently has over 300 multinational corporations operating R&D facilities in the country.
A quarter of all multinational corporations in Israel have advanced manufacturing operations in the country. Eger said that companies and investors were choosing to work in Israel because the country offers a number of incentives, among them reduced corporate tax rates and a broad range of grants. The World Bank, in its “Doing Business 2020” report, recently ranked Israel 35th out of 190 countries in the ease of doing business, up 14 spots from a year earlier.
“At the end of the day, it’s all about business. As long as you have a stable economy, a platform that can support your production and the R&D nearby across the road, you can have it all [in Israel],” Eger said.
3D Printing a Leading Industry
One of the top industries in Israel attracting significant attention from American investors is 3D printing, an industry that is revolutionizing how things are made. The Israeli government estimates that the country manufactures roughly 40% of all 3D printers worldwide. By 2024, the sector is expected to have annual revenue of $35.6 billion, according to a 2019 report by Wohlers Associates.
Founded in 1989, leading multinational company Stratasys specializes in 3D printing solutions for the aerospace, automotive, health, design and consumer products industries, among others. In 2012, Stratasys merged with the privately held Israeli company Objet Ltd. Stratasys is currently simultaneously headquartered in Eden Prairie, Minnesota, and Rehovot, Israel. It has over 2,300 employees in 31 locations worldwide.

Yehuda Rozilyo, senior R&D design manager at Stratasys, holds a large 3D-printed wrench in the company’s Rehovot facility, Feb. 10, 2020. (Maya Margit)
Stratasys is involved in several cutting-edge projects, including one that will see it provide more than 100 3D-printed parts for NASA’s Orion spacecraft, which will carry astronauts to the moon. The initiative is taking place in collaboration with Lockheed Martin and features components made from a special thermoplastic designed to withstand the extreme temperatures of space travel.
Yonah Lloyd, vice president of investor relations at Stratasys, told The Media Line that the majority of the NASDAQ-listed company’s investors were from the US, which is also its largest sales location.
“Because we’re a public company, the investor list can shift from time to time, based on investors who get in or out of the stock,” Lloyd explained. “Today, our largest investor is Ark Investment Management from New York. They own approximately 8.46 million shares or a little over 15% of the shares outstanding.”
Lloyd added that Ark had a specific fund for Israeli investments, as well as one for 3D printing companies.
“They clearly believe in the technology coming out of Israel,” he stressed.
As Israel continues to foster economic and technology ties with China, some are concerned the Jewish state will get caught in the crosshairs of the ongoing US-China trade war. However, Lloyd said that so far this issue had not affected Stratasys.
“We have to manage the shipping of our systems that are in various stages − whether during manufacturing or as finished goods − so we have to be sensitive to what’s happening in terms of the situation with China, but it hasn’t had a material impact on the business,” he said.

3D-printed models created by Stratasys for the health care industry, Feb. 10, 2020. (Maya Margit)
Shifting Away from China
In recent years some business executives have noticed a significant shift of their workforce away from China to other parts of the world, including Israel.
Flex is a Silicon Valley-based multinational that provides end-to-end services for various industries. The company employs 200,000 workers in 100 sites around the globe and has several production facilities in Israel. In Israel, Flex makes roughly 6,000 products.
“Ten years ago, about 70% − let’s say about 150,000 [of our] employees − worked in China,” Rafi Hadad, head of business development at Flex Israel, said during a press tour of the company on Monday.

Rafi Hadad, head of business development at Flex Israel, speaks during a tour of the company’s facilities on Feb. 10, 2020. (Maya Margit)
He said more and more multinationals were looking to move at least part of their workforce to Israel because of tax incentives, advantageous bilateral agreements with other countries and lower customs rates.
“Today, less than 40,000 of our employees work in China,” Hadad continued. “Other regions have grown significantly like Mexico, Eastern Europe, even Israel. Twenty years ago we started in Israel with two employees, and now we’re at 4,000.”
JOINT CYBERSECURITY FUND LAUNCHED (06/2014)
The Israeli National Cyber Bureau at the Prime Minister’s Office and the Israeli Ministry of Science, Technology and Space have established a bilateral fund with the UK Government, with the aim of funding joint research in cyber defence. The agreement, totalling NIS 7 million (1.2M GBP), will enable Israeli and British researchers to strengthen collaboration and conduct joint projects on subjects at the forefront of global scientific research. Dr Eviatar Matania, head of the Israeli National Cyber Bureau, said: “Britain is one of the most advanced countries in the world in cyber defence, and we place great importance on promoting and strengthening cooperation with our UK partners on all levels. We believe that mutual sharing knowledge will strengthen both countries and contribute to their capacity to deal with the changing nature of global cyber threats”.
INVESTMENTS CENTER RELEASES NEW INVESTMENT INCENTIVES (06/2014)
The Israel Investments Center at the Israel Ministry of Economy recently released new information about the investment incentives available to local and foreign investors in Israel. In addition to detailed information about conditional grants and tax benefits, the new list of incentives includes a host of benefits to employers who hire manpower from a variety of special populations, including ethnic and sectoral minorities, as well as in specific priority regions.
JOINT RESEARCH CENTER LAUNCHED BY UNIVERSITIES IN TEL AVIV AND BEIJING (06/2014)
A $300 million centre for innovative research and education has been launched by Tel Aviv University and the Tsinghua University of Beijing, funded jointly by government sources and private enterprise. The XIN Center will run out of both universities, bringing together scientists and students from the Israel and China campuses. It will focus its research on pressing global problems in the areas of water, energy, environment, and medicine. Tsinghua President Jining Chen said that while his university has collaborations with many academic institutions around the world, “in terms of innovation, this is the leading one”.
MICROSOFT LAUNCHES ACCELERATOR IN ISRAEL, 1ST IN COMPANY’S HISTORY (06/2014
Microsoft Corporation has announced its launch of Windows Azure Accelerator, the first accelerator in the company’s history, at the Microsoft Israel Research & Development Center. Israel was chosen by Microsoft as the site of the accelerator initiative due to the wide-ranging activity of startups in the area. The corporation is seeking to leverage its own experience and know-how to propel Israeli startups into the global marketplace, aiming to provide a creative working environment, top mentorship and variety resources to entrepreneurs. It will shortly be recruiting young companies active in cloud, web, and mobile technologies for participation in the four-month program
RAD LAUNCHES R&D CENTER IN BE’ER SHEVA WITH OFFICE OF CHIEF SCIENTIST (06/2014)
Network access solutions developer RAD has inaugurated an R&D Center at the Be’er Sheva High Tech Park, in collaboration with the Office of the Chief Scientist at the Israel Ministry of Economy, investing NIS 110 million in the new centre. The OCS is charged with the execution of government policy for support of industrial R&D and aims to assist in the development of technology in Israel through a variety of means. The RAD centre has hired 30 software engineers to help develop programmable networks and has plans to expand its ranks to as many as 90 within the coming years. RAD says that the rapid pace of hiring is intended to boost the company’s development as telecommunications switch to virtualization solutions for software networks and network apps. RAD CEO Dror Bin said: “We are proud to take the lead in fostering high-quality human capital in the region for everyone’s benefit.”
AOL INTERESTED IN ISRAELI START-UPS (06/2014)
AOL is looking to invest in Israeli start-ups, announcing that it will be starting a program, called ‘Nautilus,’ which will put at least $100,000 in as many as 10 projects at a time while escorting them over the course of a year. The Internet giant already has a development centre in Israel, and its new project aims to give “maximum freedom to entrepreneurs” and “grant them access to all the tools and connections of a global company”, according to Hanan Laschover, chief executive of AOL Israel. Companies will be chosen from a variety of fields with points of relation to its global activities, with the first investment going to Take&Make, a start-up that has developed a platform for “do-it-yourself” videos
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