A new study by the New England-Israel Business Council. has found that Israeli-founded companies in Massachusetts posted $9.3 billion in revenue in the state in 2015. When factoring in the economic impact of complementary goods and services, such as office space, accounting, marketing, and other business, their economic impact surged to $18.1 billion.
These companies employed nearly 9,000 workers in 2015, and through demand for local goods and services, they supported over 27,100 jobs in 2015.
The research findings were announced at an event this week with Massachusetts Governor Charlie Baker and over 300 business and government leaders in attendance at the MIT Sloan School of Management. David Goodtree, an expert on the Massachusetts-Israel economic relationship, is the author of the study’s whitepaper.
Since the previous study in 2012, the revenue of Israeli-founded companies has grown twice as much as the overall Massachusetts economy, and now represents nearly 4 percent of the state’s gross domestic product, the study showed.
In addition, Israeli-founded businesses secured nearly $1.2 billion in venture capital investments from 2013-2015 across 48 companies, representing 10% of all venture investments in the state of Massachusetts during the period, the study showed. The capital raised in 2015 was the highest on record.
Israeli investment deals are also bringing new money to Massachusetts, with 67% of the investments coming from out of state, including from Israel and Silicon Valley among other places. Israeli-founded businesses also returned nearly $10 billion to investors in mergers and acquisitions in 1999-2015, the study showed.
Top sectors for Israeli-founded businesses include app development and management, cyber security, data storage and management, medical devices, biopharmaceuticals, eHealth, energy and water tech, and 3D printing.
The whitepaper identified a number of factors that continue to give Boston an edge as an attractive destination for Israeli businesses and entrepreneurs, including using Boston as a gateway to US and global markets, synergies in key sectors such as IT, life sciences, and most recently, cyber-technology, the high level of educational institutions and workforce, and the convenience of a nonstop flight to Tel Aviv.
The study also noted that Massachusetts faces increasingly significant competition from other states eager to form similar models of economic activity with Israel. Since 2010, thirty US governors have brought trade delegations to Israel courting business ties.
“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,” said Baker, the Massachusetts governor, at the event, according to an emailed statement.
The New England Israel Business Council aims to help New England and Israeli businesses succeed together, fostering partnerships, investment opportunities, and other collaborations.