According to a new report that was released on June 8 by the New England-Israel Business Council, Israeli-founded companies based in Massachusetts brought $9.3 billion to the state in 2015, continuing to outpace the Massachusetts economy in overall revenue and job growth.
The report found that when factoring in the impact of spending on goods and services, such as office space, marketing, and other business needs, the figure almost doubled to $18.1 billion.
Approximately 200 companies employ almost 9,000 people in Massachusetts, which is up from approximately 6,000 three years ago, when the New England-Israel Business Council released a similar study. Both studies were conducted by Stax, Inc., which is a strategic management consulting firm, with support from the Combined Jewish Philanthropies of Greater Boston.
In the span of those three years, the revenue from Israeli-founded companies grew twice as fast as the Massachusetts economy overall and now represents almost four percent of Massachusetts’ entire economy.
“That’s a big deal,” said the report’s author, David Goodtree.
“Israeli-founded companies are a major driver of the [Massachusetts] economy and are bigger than before,” Goodtree told JTA in a phone conversation ahead of a news conference during the morning of June 8 at MIT’s Sloan School of Management.
Massachusetts Gov. Charlie Baker was expected to attend the news conference, in addition to several hundred business leaders including Lior Div, CEO of Cybereason, an Israeli-founded cybersecurity now firm based in Boston.
Goodtree found in the study that while data storage companies and the life sciences have been significant for several decades, the fastest growing sectors for Israeli-founded firms in Massachusetts include cybersecurity in addition to the companies that focus on the tools to create apps. Other strong sectors include water technology, eHealth, and 3-D printing.
“Israeli businesses play a leading role in our state’s robust economy in both tech and life science, and we greatly value our special relationship,” Baker said in a statement. “The future looks bright for the Commonwealth and Israeli companies to bring even more world-changing innovations to global markets together.”
Israel’s consul general to New England, Yehuda Yaacov, said in a statement that the economic relationship is a model of collaboration for other states.
However, Goodtree noted that the competition from other states is fierce. The report noted that since 2010, governors from 30 states have brought trade delegations to Israel. The main competitors are New York and Silicon Valley in California.
The report also noted that the Israeli-founded businesses in Massachusetts secured almost $1.2 billion in venture capital investments between 2013 and 2015, representing ten percent of venture investments in Massachusetts. Almost 70 percent of that money came from out of state, including from Israel and Silicon Valley.
“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 Council, said in a statement. “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.”