BOSTON -- (BUSINESS WIRE) -- Israeli-founded companies are having a dramatically positive impact on the Massachusetts economy in terms of job growth and economic activity – and those contributions will continue to grow significantly in the future, according to the results of a new study released today by the New England-Israel Business Council (NEIBC) with support from Combined Jewish Philanthropies. The research findings were announced at an event with over 200 in attendance today at MassChallenge with Massachusetts Governor Deval L. Patrick.
The research was conducted by Stax Inc., a global strategic consulting and research firm, and was described in whitepaper published today by NEIBC titled, “The Massachusetts-Israel Economic Relationship, 2nd Edition.” The whitepaper reveals that in the past three years, the revenue of Israeli-founded companies in the Commonwealth grew three times faster than the Massachusetts economy overall, a bright spot during the post-recession economy. These companies’ rate of revenue growth was also more than twice as fast as the state’s important IT and professional services sectors, including life sciences.
In the three-year period 2010-2012, Israeli-founded businesses in Massachusetts experienced 12.6% compound annual revenue growth and 5.3% compound annual job growth.
Specifically, the Study found that Israeli-founded companies in Massachusetts booked $6.2 billion in revenue in the state in 2012. When factoring in their economic impact due to their spending on goods and services – such as office space, accounting, marketing, and other business needs – their economic impact swelled to $11.9 billion.
These companies employed nearly 6,700 in 2012. Adding in the same multiplier effect based on their demand for local goods and services, they supported over 23,000 jobs.
Additional Key Findings in Brief:
The whitepaper describes numerous key drivers of the Massachusetts-Israel success story. Key among them is the synergistic characteristics of the two geographies in academic strength, a highly-educated workforce, R&D investment, innovation-orientation, and the ability to commercialize new technologies.
Massachusetts faces significant competition from other states to be the preeminent partner for Israeli-founders looking to establish a U.S. presence. The whitepaper identified 16 governors and nine mayors who have conducted trade missions to Israel since 2010. These officials have courted Israeli businesses to choose their states as a base of operations for global expansion.
Research interviewees specifically noted that Governor Patrick’s 2011 trade mission to Israel and his Administration’s efforts since that time as influential to their decision to setup shop in the Bay State.
“Massachusetts has become a home-away-from-home for Israel’s innovation economy and I am proud that our 2011 trade mission and our strong public-private partnerships have laid the foundation for that success,” said Governor Patrick. “Strengthening our global relationships is central to our growth strategy because we know that in order to succeed in the 21st century global economy, we must be prepared to compete for jobs on the international stage.”
While Israel’s small size doesn’t make it an export destination, the “Startup Nation”, as it is known, is a global powerhouse of entrepreneurship, with over 300 multinationals like Google, Intel, Facebook, and Apple establishing R&D outposts there, world-class start-up fundraising, and a steady stream of innovations that achieve enormous global market acceptance.
“The opportunities that this relationship presents for Israel and Massachusetts to share in future growth are limitless,” said Amir Eldad, Chairman of the New England-Israel Business Council. “The accelerating economic value and strength of the partnership has only just begun to be realized.”
The methodology for the Stax study is based on an analysis of company founders. The Stax research was performed in 2010 and 2013.