Tiny Israel taking big strides in Buckeye State
Val Prevish |
Thursday, April 22, 2010
Israel has more companies on the NASDAQ exchange than the entire continent of Europe and it has attracted twice as much venture capital as the United States.
This amazing track record for a country with only 7.1 million people -- one that weighs in at roughly the size of New Jersey -- is attracting a lot of attention. Plenty of communities here in the U.S. want to get in on the action.
Thanks to sustained efforts by business developers in Ohio, our state is seeing its share of investment from Israeli businesses and could be in the early stages of a high-tech boom as these ventures accelerate.
The go-getter attitude in Israel can be attributed to several things, says Shep Englender, CEO of the Jewish Federation of Cincinnati: the military service that every young Israeli must fulfill emphasizes individual leadership; the location of the country in a region that is not welcoming to its products means business must be innovative to adapt to far reaching markets; and the business culture is tolerant of failure, so young entrepreneurs forge ahead on ideas without fear.
Israel's dependence on foreign markets to create growth for its base of companies means that communities in Ohio can help facilitate important ties to the U.S. Ohio is also known for its leadership in health care research and technology development, two areas that represent a large share of start-up business in Israel.
Tom Sudow, director of business development for the Ohio Global Cardiovascular Innovation Center, says Ohio has many advantages that have made it a draw for Israeli business and other types of businesses as well. For example, Ohio was named for the fourth consecutive year as the top state in attracting new or expanded private sector capital projects by Site Selection magazine with a total of 381 projects. Runner-up Texas had 374.
While only a fraction of these were new investment from Israel, Ohio's positives, like low cost of doing business, outreach services to help with re-location, and existing network of research facilities and universities have helped make it a business magnet, says Sudow.
"We provide them with a good soft landing," he says. "There's always been a lot of competition so you have to stand out."
While the number of Israeli businesses in the state now numbers roughly a dozen, Sudow says he could see that reaching as much as 40 or 50 companies in the next few years.
There are no official estimates of the impact these businesses could have on our economy, but Sudow says "it will not be insignificant."
Two cities that have paved the way in attracting Israeli business investment are Beachwood, outside of Cleveland, and Akron.
As the former development director for Beachwood, Sudow says the city brought in as many as 14 Israeli companies, although not all remain there. Current Beachwood Business Development Director Vince Adamus, says that the city employs a consultant in Israel to help with the process.
The city of Akron is five years into a partnership with an Israeli incubator, Targetech in Netanya, and has brought two new technology companies to its community, says Bob Bowman, deputy mayor for economic development.
"We think we can eventually bring in three to five companies per year," says Bowman. "Some of these companies could very quickly generate significant sales. Some will become global."
Igor Granov, CEO of NI Medical, which makes a device that measures heart health, is one of the two new Israeli companies in Akron. He says the city put together a tempting package to lure his company. He was also impressed with the quality of hospitals in the state and with the fact that Ohio is centrally located with respect to most of the rest of the country, an advantage when it comes to travel or shipping.
He anticipates hiring 25 to 30 employees in Akron in the next four years.
Access to Ohio's universities and their research and talent is another consideration for Israeli entrepreneurs.
William Abraham, MD, professor of internal medicine and director of Ohio State University's Division of Cardiovascular Medicine, is part of the reason Israeli-founded Sensible Medical Innovations is moving a portion of its operations to Columbus.
Sensible Medical Solutions is developing monitoring technology that could help prevent hospitalizations for congestive heart failure patients, says Abraham, something he has spent years researching.
"These hospitalizations are a huge burden for both the patients and the system," he says. "This tool can help keep them out of the hospital."
Sensible Medical plans to conduct its major clinical trials here in conjunction with institutions like Ohio State and hospitals in Cleveland and Cincinnati, says Abraham, who is working closely with the company on its product development.
"A business like this raises the state's profile in biotech, which has traditionally been clustered on the coasts," he says. "The other plus is the creation of new jobs. Eventually there could be a need for hundreds of employees."
When the product clears FDA approval in the next three to five years, Abraham says there is a large potential market in the U.S. as over 6 million Americans suffer from congestive heart failure.
Scott Osborne, director of business development for BioOhio, says that Israeli biotech investment in Ohio has been steady for several years.
"We have one of the strongest networks of hospitals anywhere in the world," he says. "One-sixth of all the clinical medical trials take place in Ohio. We are recognized as a place of clinical excellence.
"Ohio has a great story to tell," he says. "All we try to do is reveal the vastness of the resources available. It's a fun job."