This report was developed and written by Sean Randolph, Senior Director at the Bay Area Council Economic Institute. Myrna Srouji supported the research. The Economic Institute is grateful for the many introductions made by the Israeli Consulates General in San Francisco and Los Angeles to institutional, education, and business leaders in California and Israel; to Start-Up Nation Central for the valuable data and analysis it provided; and to the nearly one hundred individuals who contributed their time, information and ideas through interviews and documentary materials.
Silicon Valley to Silicon Wadi
California's Economic Ties with Israel
Introduction
Unique economic ties link the Bay Area and California with Israel. For a nation of only 9.3 million people, Israel has an extraordinary record of generating technology and startups. Its role as a major startup hub and source of innovation in fields such as water technology and management, agtech, fintech, mobility, and cybersecurity connect it deeply with Silicon Valley. Built also on shared values and aligned interests, that relationship is reflected in growing venture investment, large-scale acquisitions of Israeli companies, successful Israeli-founded unicorns and public companies in Silicon Valley, and extensive corporate and binational R&D.
This report discusses the roots of Israel’s innovation economy, California’s economic footprint in Israel, Israel’s economic presence in California, key technologies where that activity is focused, and possibilities for the future. There are strong opportunities to grow this partnership across a range of current and emerging technologies.
In California, a March 2013 MOU signed by then Governor Jerry Brown and former Israeli Prime Minister Benjamin Netanyahu and the 2015 California-Israel Global Innovation Partnership launched to implement the MOU provide a framework for cooperation in water, agriculture, university research, and other fields. While agricultural exchanges under the MOU are active, its implementation could be broader. There is no designated source of public funding to support current or potential projects. Strengthening these exchanges calls for a deeper level of investment, and consideration should also be given to broad-based funding for a widened range of cooperative initiatives that can advance the California-Israel research and technology agenda and potentially produce deeper benefits for both sides.